The long-running Mt. Gox saga has taken another twist. The founder of claimants’ group Mt. Gox Legal, Andy Pag, has resigned. He has also sold his bitcoin claim at just $600 per coin—a huge discount to its current dollar value of $5,235.
In a resignation letter, Pag told the roughly 1,000 claimants represented by Mt. Gox Legal that he does not expect the case to conclude for at least another 18 months. One of the main reasons, he says, is that crypto business incubator CoinLab raised its bankruptcy claim against former partner Mt. Gox from $75m to $16bn earlier this year.
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CoinLab’s dramatic adjustment followed a move by Pag’s Mt. Gox Legal to switch from bankruptcy proceedings to civil rehabilitation proceedings. If and when it is completed, that switch will multiply the value of those small creditors’ claims because they will be able to claim 2019 bitcoin–instead of claiming the dollar value of their 2014 bitcoin.
If approved, CoinLab’s claim will amount to 16 times more than the total assets available for distribution to Mt. Gox’s creditors.
Crypto business incubator CoinLab raised its bankruptcy claim against former partner Mt. Gox from $75m to $16bn earlier this year.
Mt. Gox was the largest bitcoin exchange in the world in 2013 and processed around 70 percent of all bitcoin transactions at one point. In February 2014, the exchange closed down and filed for bankruptcy. It said it had been hacked—and 850,000 bitcoin had disappeared. Mt. Gox CEO Mark Karpelès was charged with embezzlement unrelated to the hack and spent 11 months in a Japanese prison before being released on bail.