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.