Brock Pierce and Sunlot’s New Gox Rising Plan Looks to Replenish Bitcoin Lost in the Mt. Gox Theft
The hacking of Mt. Gox is one of the most famous in the history of cryptocurrency. With a series of serious hacks in 2014, a total of 850,000 Bitcoin disappeared, which immediately caused the public to become worrisome about the use of cryptocurrency at all. However, Brock Pierce, a venture capitalist who has a history of pioneering digital currency and investing in “disruptive businesses” (according to CrunchBase), is trying to remedy this five-year-old theft by working to return the Bitcoin of 24,000 victims.
The plan has been coined “Gox Rising,” which he recently sat down with TechCrunch to discuss. Not only does the plan include the reboot of Mt. Gox as a whole, but it is an implied challenge to both Coinbase and Binance to become the top crypto exchange in the worked. In the Mt Gox bankruptcy trust, Pierce said there is $630 million and 150,000 Bitcoin, and his mission is to fight against the barriers that are presently keeping victims from getting their funds back. While many CEOs of blockchain startups think that this plan is outrageous in every capacity, it still has a chance of correcting one of the biggest crimes that Bitcoin still has in its history.
Mt. Gox was originally just a place for players of Magic: The Gathering in 2006, proving an online exchange for players to participate in the fantasy card game. The Magic: The Gathering Online eXchange wasn’t built for the protection of Bitcoin, but Jed McCaleb changed the infrastructure to offer that kind of opportunity in 2010, just a year after Bitcoin was born. By 2013, Mt Gox became so successful that it was the leading cryptocurrency exchange and was in charge of 70% of all Bitcoin trades. However, even at this time, there were many security and technology issues already putting it at risk.
When a “bug” was found in February, Mt Gox attempted to stop actions on the platform as quickly as possible, but the losses had already begun. It urged users to stop withdrawals, but the platform quickly learned that over 700,000 Bitcoins were lost within the last few years. Within less than a month, Mt Gox filed for bankruptcy protection and stopped all trading. The total numbers reflected that 100,000 Bitcoin from the platform itself and 750,000 Bitcoin owned by investors had been stolen.
Now, court-appointed trustee and veteran bankruptcy lawyer Nobuaki Kobayashi in Japan is working to find a process that will allow the 24,000 victims that filed their own claims to be compensated. Even though it has been five years since the platform went bankrupt, and even though there is 137,892 Bitcoin, 162,106 Bitcoin Cash, and other coins in the holdings, nothing has been returned to creditors.
Establishing himself as a major figure in the blockchain, he soon became the co-founder of Blockchain Capital, leading him to be associated with the EOS Alliance. He revealed to the interviewer at TechCrunch that his association with Goldman Sachs, his biggest investors, led him away, because “Goldman was not a fan of me buying the biggest Bitcoin exchange.”
Pierce also revealed that he believed that Mt Gox had “a big risk factor,” and he is grateful his intuition led him away at the time. After the implosion, Pierce says that he purchased McCaleb’s 12% stake for 1 Bitcoin, using his investment group named Sunlot Holdings. However, there’re signs that the deal didn’t go through, because the Bitcoin was never paid. Pierce claims to have established a binding agreement with French software engineer Mark Karpeles, who held the rest of the shares. Allegedly, Karpeles tried to get out of the deal, which is now at a standstill from a legal perspective.
A lawsuit from CoinLab through a wrench in Sunlot’s plan, saying that it wasn’t given the agreed-upon assets after partnering with Mt Gox in 2012 to run operations in North America. Mt. Gox quickly countersued, under the allegations that CoinLab had held onto millions in deposits and wasn’t legally certified to run the exchange. The entire ordeal is rather complicated, but consumers can view the entire battle at reuters.
Now, within the last week, co-founder Peter Vessenes of CoinLab is seeking $16 billion, instead of the original amount of $75 million. On this matter, Pierce stated,
“[T]his is a frivolous lawsuit. He’s claiming if [the partnership with Mt. Gox] hadn’t been canceled, CoinLab would have been Coinbase and is suing for all the value. He believes Coinbase is worth $16 billion so he should be paid $16 billion. He embezzled money from Mt. Gox, he committed a crime, and he’s trying to extort the creditors. He’s holding up the entire process hoping he’ll get a payday.”
Pierce has reiterated multiple times that CoinLab is nothing more than a villain that wants to keep creditors from getting what’s owed to them.
One of the worries of creditors is that they would only be paid for the then-value of Bitcoin, even though it is seven times more than that today. However, a Japanese District Court decided in June last year that the bankruptcy proceedings would be dealt with in civil rehabilitation, preventing the liquidation and paying them in Bitcoin.
Rather than accepting this option, Pierce and Sunlot are working to find the rest of the missing funds, though he has said,
“What kind of ending do we want to make for it? I’m a Joseph Campbell fan so I’m obviously going to go with a hero’s journey, with a rise and a fall, and then arise from the ashes like a phoenix.”
Now, with the new plan for reinventing Mt. Gox, Pierce aims to launch a Gox Coin and wants to create a foundation that will recover the Mt. Gox assets and give them back to all creditors. There’s a lot of components needed to make this plan work, but Pierce said,
“We want to offer [creditors] more than the bankruptcy trustee can do on its own.” Even if he fails in his own profiting, he said, “I want to see the creditors made whole.” Now, its up to creditors whether they want to trust him.”