In 2013, Mt.Gox was the biggest Bitcoin exchange on the planet. The price of Bitcoin was soaring, and in December 2013, Mt.Gox declared bankrupcy and closed the exchange, resulting in 850,000 of it’s customers Bitcoin being lost.
The news caused a huge crash in the Bitcoin price, causing many to report that Bitcoin had died and failed. The all time high price at the time was around $500 and crashed down to around $200 following the closure of Mt.Gox.
The story is famous in the Bitcoin world, and is the perfect example of the risks of storing Bitcoin on an online exchange.
What was the value of these bitcoins that were lost? Well, the price has increased significantly since the loss and so, they would now be worth at least $8.25bln. Imagine how frustrated the user base must be. For many users, the amount they would now be worth could have been truly life changing.
Well, in 2014, the government of Japan conducted an investigation into the matter, by forming their own task force, a trustee dive deep into the details of the matter of Mt.Gox while the company sought bankruptcy.
The CEO of Mt. Gox Mark Karpeles was one of those in the company who was investigated for his potential wrongdoings in the matter. Those who were tasked to investigate him did so and made their conclusions. They first made certain to state to the Mt. Gox leaders that it was of the utmost importance for them to promise to give back the 202,000 bitcoins that were recovered.
Yet, in an interesting turn of events, it seems that the users will be credited, but they will only be credited with the Japanese yen value of the bitcoins as they were in the year of 2013, referencing the pricing and rates that were present in that time frame. That means that if they held whole bitcoins, they might just be able to receive satoshis or portions of a bitcoin in today’s rates.
The users might be 30 times more infuriated to find this out, as the price of the currency increased at least that many times since that timeframe. These people who are owed the money are still seeking to gain what is rightfully theirs and are not too happy with the way that the bankruptcy judgements are playing out. As such, they are seeking to investigate their various options for legal recourse in the matter and trying to figure out how to make the company and its leaders cough up the the rest of crypto.
To further incite fury, the former CEO of Mt. Gox has announced ICO plans.
Mt. Gox ICO Plans
He published a blog post recently that stated what was happening with the case and addressed full the the concerns of those creditors who want the btc at today’s rates. He’s stated that he will be doling out what is legally deemed as correct and goes rather in depth on the matter.
“Now, far from being boring, this bankruptcy is setting a new kind of precedent. Indeed, the assets held by MtGox when it entered liquidation bankruptcy included some 202,000 BTC, which now have a worth at today’s rate much higher than the sum of all non-erroneous claims filed against MtGox.
Normally this shouldn’t be an issue. Bankruptcy repays all creditors in full, and we’re done. In this specific case, however, many of the claims are based on Bitcoin value held by MtGox customers at the time the bankruptcy started, and while for most the claimed amount would cover all money spent on purchasing said bitcoins (in some case it would add a hefty bonus), most Bitcoin creditors assert capital gains from said bitcoins should be paid to them.”
He went further on about how in many bankruptcy cases, capital gains would usually not allow covering all claims, but this is a special case and the current estimated value of the assets are much higher than the accepted liabilities.
He then floated the idea of bring Mt Gox back but said that there is a price tag for it of $245 million to solve all the issues in the past and restart. He said that there would be two ways to accomplish this, one by restructuring the company and through an ICO. He updated his post later to let people know that the ICO would have many legal hurdles and so would not be able to be accomplished?
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