Bankruptcy of Mt. Gox: a creditor recovers its bitcoins

CoinLab, the former partner of Mt. Gox, offers creditors a pre-trial agreement.

Creditors who refuse the agreement can still sue Mt. Gox.

Bitcoin’s current prices create a huge opportunity for those who would accept the deal.

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Coinlab, a former partner of Mt. Gox, reached an agreement with CFO Nobuaki Kobayashi on January 15.

The CoinLab agreement allowed one creditor, and now allows all creditors to claim up to 90 percent of the bitcoin related to the bankruptcy of Mt. Gox, according to Bloomberg.

Creditors accepting the Financial Peak review will receive advance payments, instead of waiting for the verdict of several court cases related to the company’s bankruptcy.

According to CoinLab, the agreement is not valid for all creditors. Indeed, if some decide to refuse this agreement, they will have to wait for the judgment of the ongoing cases,” says Coinlab.

The company Mt. Gox was a platform for the exchange of Japanese crypto-money, and was at one time a leader in its field. Entrepreneurs Peter Vessness and Mike Koss created CoinLab in 2011 to help the platform find investors in the United States.

A long, long journey

In 2014, the platform abruptly shut down, with surveys revealing that it had lost more than 850,000 bitcoins belonging to its customers. Shortly thereafter, the company filed for bankruptcy, leaving these customers uncertain, and no response to the possibility of recovering any of their bitcoins.

Mt. Gox attributed the loss to a series of violations, which the platform’s customers and the crypto-currency community deemed suspicious.

Japanese authorities subsequently accused the company’s former CEO, Mark Karpelès, of embezzlement. They accused him of having accessed the platform’s computer system to falsify data on his outstanding balance in order to conceal the hacking.

In the six years following the company’s closure, the Japanese authorities recovered a large part of the missing Bitcoins with the help of several crypto-money analysis companies.

None of these bitcoins found their way to Mt. Gox’s customers due to numerous investigations and lawsuits.

The Mt. Gox Millionaires

The CoinLab agreement brings hope of an end for one creditor, and now all of Mt. Gox’s customers. For some, it is the resumption of the storm.

The day Mt. Gox filed for bankruptcy, Bitcoin was trading at $489. That puts the value of lost bitcoin at just over $415 million.

Bitcoin soared to over $37,000 following a series of institutional investments in 2020. The value of lost (now recovered) Bitcoin is now $31.5 billion.

Many of Mt. Gox’s former clients became millionaires during the six years their bitcoins were held.

While many community members are pleased that justice is being done to compensate former Mt. Gox customers, they are concerned that the compensation could trigger a huge sale from customers whose lives could change overnight.

Ripple (XRP) falling 60% as major exchanges stop trading it

The price of the XRP fell to lows of $0.22, more than 60% lower since the U.S. SEC opened a lawsuit against Ripple, and now the major exchanges announce the suspension of their trading 

The XRP value may fall to a minimum of $0.20 soon if the bears keep pushing down.

Before the U.S. regulator, the Securities and Exchanges Commission (SEC), filed a lawsuit, XRP had seen its value more than double during the 2020 bullish cycle. The price of 4th place cryptomoeda rose to $0.79 on November 24, with bulls targeting $1.00.

The SEC process, however, saw the value of the digital asset plummet 13% on December 22 and over 41% the next day.

XRP/USD daily price chart. Source: TradingView

On the daily chart, the division below 100-SMA continues to limit the bullish action, with the moving average located near $0.35. The struggle with resistance at this level, along with the bearish outlook for MACD and RSI, suggests that the path of least resistance could be down.

The XRP/USD currency pair has fallen about 20% in the last 24 hours after Bitstamp and Coinbase announced their plans to suspend trading. Overall, the XRP fell almost 60% last week.

XRP faces a number of obstacles, as shown by the Fib retracement levels of the recent decline from a maximum of $0.60 to a minimum of $0.20. The 23.6% ($0.30), 100-SMA ($0.35) and 50% ($0.40) Fiber Shrink Levels provide immediate levels of seller interest.

XRP/USD time graph. Source: TradingView

On the hourly chart, the price of the XRP is below the simple moving average of 100 hours, which further strengthens the short term bearish perspective. While $0.22 provides strong support, the continued rejection around $0.23 is further weakening the bulls. The hourly MACD is decreasing while the RSI remains within oversold territory.

If bears can establish a balance around $0.20, the next stop will probably be the $0.15-$0.10 zone. According to HornHairs cryptomorphic analyst, the XRP may fall to $0.009 if it reaches the March minimum.

XRP/USD chart showing a potential decline to $0.009. Source: CryptoHornHairs on Twitter

At the time of writing, the XRP/USD currency pair is trading around $0.22 and the downward spiral may continue if prices fall.

The bearish scenario will be cemented if investors discard the token following plans from major trading platforms such as Coinbase, Bitstamp, OKCoin and to suspend XRP trading.