Mt Gox Creditor Advocate Quits
Endless hours can be spent diving into the topic of crypto exchange hacks and the long-lasting effects they can have. While the most recently talked about ones are of exchanges like Cryptopia and DragonEx, few can trump the monumental scandal that was the Mt Gox Exchange Hack.
At a time, Mt Gox was one of the biggest crypto exchanges on the planet but after suffering a hack that led to the loss of hundreds of millions of dollars, the exchange folded up and has been in a back-and-forth battle with their creditors in order to settle some of the funds that were lost in the hack.
Sadly, these negotiations have hit a bit of a bump as it has been reported that the head of their creditor association has quit.
Calling It Quits
Andy Pag, the founder of Mt. Gox Legal, has stated that the ongoing legal troubles show no signs of letting up and that the claim by Coinlab, who were formerly partners with Mt Gox, might lead to the legal battle being drawn out for up to two years.
Pag had first said in a private forum earlier this year that he would be stepping down, despite a previous assessment claiming that creditors could be compensated by the end of 2019.
There had previously been some sign of progress as Mt Gox had been in the process of filing for bankruptcy but then switched their filing to a civil rehabilitation suit following the rise in Bitcoin price. As part of the civil rehabilitation suit, creditors would have been paid in crypto. However, the emergence of the Coinlab suit put a dent in these plans and the future is now uncertain.
The initial suit filed by Coinlab was for $75 million on the basis that Mt Gox breached their contract of having them act as their US branch. Since the bankruptcy and subsequent civil rehabilitation filing, this has changed.
“Coinlab originally put in a bankruptcy claim originally of $75 million which people thought was excessive … When we went to civil rehabilitation, everyone refiled the same claim, but Coinlab filed $16 billion,” Pag explained.
Voting rights are typically attributed to creditors based on the size of their claims but Coinlab’s claim is yet to be assessed and that can take years, further slowing down compensation payments.
“Because it’s pending and it’s still disputed, the trustee can’t attribute fair voting rights if it’s accepted or zero voting rights if it’s rejected but … until it’s [resolved] the trustee can’t give them voting rights … It looks like it’s stalled,” said Pag.