Brock Pierce’s Plans To Re-Launch Mt. Gox Might Not Prosper In A Highly Regulated Environment

Plans To Re-Launch the Mt. Gox Exchange Might Not Prosper In A Highly Regulated Environment

Back a the beginning of 2018, the Japanese virtual currency exchange Coincheck was hacked, losing 523 million NEM (XEM) equal to $500 million at that time. Since that moment, Japanese authorities started to take very hard measures to control and regulate the market in the country.

Now, it seems that Brock Pierce, the co-founder of Blockchain Capital, wants to revive the virtual currency exchange Mt. Gox, after losing billions of dollars from users’ funds back in 2014. According to Pierce, the intention is to run the exchange once again by distributing $1.2 billion held by Mt. Gox. This would allow Pierce to reimburse every creditor of the exchange through a process called Rising Civil Rehabilitation.

If the exchange wants to really operate in the country, it will really have to obtain a license from the Financial Services Agency (FSA) in Japan, which is known for being very hard with the companies that it provides licenses to. Back in January 2019, the FSA gave the license to start operating again to Coincheck.

In order to relaunch its exchange, Coincheck had to work for more than 12 months. They had to find an investor ready to pay the affected users. Nevertheless, the revival of the Mt. Gox exchange might be much more difficult than the one experienced by Coincheck.

Pierce has the intention to re-launch the Mt. Gox exchange based on the assumption that he is the rightful owner of the platform. This is due to the fact that he planned to purchase Mt. Gox from Tibanne right after the exchange collapsed in 2014. Furthermore, he says that he purchased 12% of the exchange from Jed McCaleb. Nevertheless, he does not own the company. Additionally, there is no paper that confirms any transfer or buying procedure.

There are several accusations being made to Pierce saying that he could have saved creditors from a civil rehabilitation that takes years. However, he waited a very long time to claim a part of the exchange. However, we should currently be focused on the creditors that have been writing the trustee en masse convincing them not to oppose civil rehab.

Considering the FSA’s hard policies related to cryptocurrency exchanges, even if he is able to start the exchange once again, it might be very difficult to receive the approval of the FSA, at least in the short term.

On Twitter, Mark Karpelès, the former CEO of the Mt. Gox exchange, has given his opinion about this issue. Tuur Demeester, Founding Partner at Adamant Capital, asked Mr. Karpeles whether the rumours that spread regarding Brock Pierce reviving the Mt. Gox exchange were real.

Karpelès answered that there was no purchase agreement ever drafted and that the court did not approve the LOI. Additionally, he says that Tibanne has no record of any payment for the shares. At the same time, he mentioned that Mt. Gox official shareholders list does not show Crock Pierce anywhere.

He went on saying that Brock Pierce wrote to him that he was going to litigate the Gox position. A long conversation between Karpelès and Pierce started on Twitter right after. Mr. Pierce informed that Mark knows he sold his 88% share and that he sent a letter of confirmation. Finally, Pierce said that Karpelès has a partner that has been secretly representing his interests during the last five years. On this Tweet, he tagged Daniel Kelman.

Keleman has also challenged Brock Pierce to a live debate regarding this situation.

Clearly, in the middle of this argument, there are several hundreds of individuals that lost their funds at the exchange when it was attacked. They are all waiting to be refunded and receive the funds that they had in US Dollars at the time of the hack.

With all these difficult issues to be solved, Brock Pierce might not be able to receive a new license from the FSA to operate the Mt. Gox exchange once again.

Get Daily Headlines

Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

What to Know More?

Join Our Telegram Group to Receive Live Updates on The Latest Blockchain & Crypto News From Your Favorite Projects

Join Our Telegram

Stay Up to Date!

Join us on Twitter to Get The Latest Trading Signals, Blockchain News, and Daily Communication with Crypto Users!

Join Our Twitter

Add comment

E-mail is already registered on the site. Please use the Login form or enter another.

You entered an incorrect username or password

Sorry, you must be logged in to post a comment.
Bitcoin Exchange Guide