An agreement between CoinLab and those handling Mt. Gox’s bankruptcy proceedings could provide past investors hope of recovering a portion of their lost funds.
The deal, drafted between CoinLab, Mt. Gox trustee Nobuaki Kobayashi, and MGIFLP — an arm of Fortress Investment Group LLC — could permit investors to cut their losses and take early payment, rather than wait out current litigation in the hopes of recovering more.
As reported by Bloomberg, up to “90%” of the remaining Bitcoin (BTC) currently locked away due to the bankruptcy suit could be offered upon. However, the plan needs to be approved before formal offers could be made to creditors and investors.
CoinLab has outstanding litigation against Mt. Gox and has sought approximately $16 billion over an alleged licensing agreement and projected earnings that went south once the cryptocurrency exchange collapsed. The claim has previously been branded “the elephant in the room” causing delays in proceedings, which have now surpassed the seven-year mark.
Taking an early payment will not be mandatory and creditors can still hold out for a “final payment.” If the proposal is accepted by creditors, this also does not mean payment will be made anytime soon.
It is also important to note that there are more claims on Mt. Gox than coins held in trust could cater for. For every one BTC claimed, the trust only holds 0.23 BTC, according to CoinLab.
Therefore, creditors could potentially make a claim for 21% of their holdings (90%), or wait for a potential payout of 23% (100% of claim possibility), as explained by WizSec. This, too, depends on the outcome of CoinLab’s ongoing court case.
This means that fiat currency deals — yet to be determined — could be offered on the remaining cryptocurrency reserve, and not that investors are entitled to 90% of their overall lost funds. It is also not known exactly how much BTC is being held while the lawsuits play out.
Mt. Gox, a Japanese cryptocurrency exchange operated by Mark Karpelès, used to be one of the most prominent early exchanges for early adopters. The platform closed suddenly and without warning in 2014, with approximately 850,000 BTC belonging to customers lost.
While roughly 250,000 were later rediscovered in an old wallet, Karpelès was accused of embezzlement. The former CEO was found not guilty and has maintained his innocence — but he was found guilty of records tampering, leading to a 2.5-year suspended jail sentence.
Karpelès has not ruled out returning to the cryptocurrency space in the future.
When Mt. Gox collapsed, Bitcoin was trading at under $500. Since then, its value has exploded, reaching over $41,000 earlier this year. At the time of writing, BTC has corrected to $36,390.
Mark Cuban, a prominent investor, has suggested that the decentralized finance (DeFi) market could change the cryptocurrency market, with BTC valuations currently being…
Read more:If you lost Bitcoin in Mt. Gox scandal, there is now a chance of some recovery |
