New Wrinkle Unfolds Inside the Mt Gox Saga as CoinLab Co-Founder Claims $16 Billion in Rehabilitation Program
A few years ago, Mt. Gox was one of the most powerful and respected crypto exchange companies. However, after suffering a hack, they have closed operations and filed for bankruptcy. However, the process of shutting down operations isn’t always that simple as a number of people, including their former clients, are trying to get their money back.
Mt. Gox is currently undergoing a civil rehabilitation program. As a result of this program, those who are owed money by the former exchange were able to file claims. The ongoing problem is now determining which class of claims will be addressed first.
When the hack first occurred, $475 million worth of bitcoin was lost. 750,000 of the BTC that was stolen belonged to their customers and 100,000 BTC belonged to the exchange itself.
After bankruptcy was filed, Mark Karpeles, the CEO of Mt. Gox, found out that there were some cold wallets that had a significant amount of bitcoin which could be used to offset debts. Initially, there were plans to use the funds to pay off creditors. However, because of Japanese bankruptcy laws, creditors are required to be paid in Japanese Yen while shareholders are to be paid with the remaining bitcoin.
Users of the exchange, however, are not satisfied with these plans and are now in court. Peter Vessenes, the co-founder of CoinLab and former Chair at Bitcoin Foundation, is also in court with Mt Gox, claiming that he is to be paid $16 Billion. His claim is that CoinLab was to have engaged in partnering with the exchange, which went sour due to withholding of information.
If his claim gets approved, there will be little left with which users of the exchange can be paid back with. The claim was first noticed by Daniel Kelman, an attorney, who tweeted,
— Daniel Kelman (@danielkelman) February 1, 2019
This move by Vessenes has been widely criticized in the industry, with many feeling that it is insensitive to the victims of the hack.
For example, Jesse Powell, the CEO of Kraken, tweeted,
“Unbelievable balls on this guy to hold up payouts to thousands of victims for years with an entirely frivolous claim over a botched partnership attempt. How could you think that your $16B claim should be senior to the actual account holders’? How do you show your face?”