Mt. Gox Creditors Neither Need nor Deserve This Kind of ‘Hero’

Brock Pierce has launched his own bid for the civil rehabilitation of Mt. Gox, promising to pay out all current funds to creditors while also talking about issuing debt tokens or giving away equity in a resurrected Mt. Gox exchange. As noble as this may sound on the surface, there are strong reasons to question the credibility and motives of this proposal.

Let’s Be Clear

First, Pierce is basing this plan on a fresh assertion that he is the rightful owner of Mt. Gox, as a result of plans to purchase Mt. Gox from Tibanne immediately after the collapse in 2014, as well as claiming to have later purchased Jed McCaleb’s 12% stake.

Let’s be clear here: Pierce does not own Mt. Gox.

Mt. Gox Creditors Neither Need nor Deserve This Kind Of 'Hero'

There exists a signed Letter of Intent (LOI) dated March 2014 between Sunlot and Tibanne for a planned handover of Mt. Gox. Into this letter Sunlot inserted language about “binding terms”, but it is clearly just drawing up the framework for an agreement yet to be closed.  As an obvious example, no purchase sum is specified.

Already Under Civil Rehabilitation

However, as Mt. Gox was already under civil rehabilitation at the time (and as the LOI states at the end next to “Court Approval”) no such agreement could be entered into without the court’s prior approval. Sunlot was sent a request to formally and mutually rescind the Letter of Intent in recognition of this overstep of authority in order to clear the way for restarted talks with the court’s blessing. He refused to sign it. Pierce is mischaracterizing this as Mark Karpeles backing out of a binding agreement, and seems to think that as long as he refuses to admit the truth, an alternate timeline where Sunlot closed the deal and legally acquired Mt. Gox will play out.

MtGox Creditors Neither Need nor Deserve This Kind Of “Hero”

As for acquiring McCaleb’s 12% share, no matter what deal Pierce may have struck with him, no effort has been made to legally record any transfer of shares, and the Mt. Gox estate still recognizes McCaleb as the legal owner of those shares.

Pierce’s insistence on being the legitimate owner of Mt. Gox in the face of facts is already disqualifying. But he has further made it clear that he considers himself the rightful beneficiary of the “hundreds of millions of surplus assets” that were originally due to be paid out to Mt. Gox shareholders due to a cruel quirk of Japanese bankruptcy law. It is against this backdrop that he is offering to “gift” this money to creditors by promising to generously refrain from laying claim to it.

Veiled Threat

Let us be equally clear on this: the “surplus” assets have been specifically placed out of reach of any shareholders thanks to the dedicated push by creditors like the MtGoxLegal group to convert the liquidation to new civil rehabilitation proceedings. We already won that victory. For Pierce to even bring this up is nothing short of a veiled threat that he could try to lay claim to them should he change his mind.  
And even if we take Pierce’s claim to Mt. Gox’s ownership as fact, why did he never lay claim to Mt. Gox’s assets during the four-years of liquidation proceedings?  Pierce could have stepped in and saved creditors from a painful, hail-mary bid for civil rehabilitation. He didn’t. Instead, he waited until the victory was won before stepping on stage to claim a prize.
If Pierce truly only wants to give something to Mt. Gox victims while asking nothing in return, this would be very laudable indeed. But what we’re seeing here is just a media spectacle with promised gifts being conditional on us all first giving Pierce what he wants.
The spectacle should instead be focused on the creditors who fought like hell and wrote the trustee en masse, convincing him not to oppose civil rehab and setting a Japanese precedent in the process. The civil rehab file contains all those letters. I’ve seen them.
Mt. Gox creditors neither need nor deserve this kind of “hero”.

Source
Author: Daniel Kelman
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Japanese Prosecutors Want Former Mt Gox CEO Jailed for 10 Years

The former CEO of the now-defunct bitcoin exchange Mt Gox, Mark Karpeles, could face up to decade in prison if prosecutors have their way.

According to the Nikkei Asian Review, prosecutors are seeking a 10-year jail term for Mark Karpeles for embezzlement. Among the claims made by prosecutors at the Tokyo District Court include the fact that Karpeles diverted company funds to other ventures and is also responsible for ‘destroying the confidence of bitcoin users’.

Per the prosecutors, Karpeles embezzled 340 million yen (approximately US$3 million) of client funds which had been deposited in a bank count belonging to the fallen bitcoin exchange. Karpeles is alleged to have transferred the funds in 2013 between September and December. The prosecutors also accuse Karpeles of manipulating the trading system of Mt Gox with a view of padding the balance.

‘Temporary Loan’

In the course of the trial, Karpelese has insisted that he did not embezzle funds but rather the money transferred was a temporary loan. But according to the prosecutors there was no paperwork to prove Karpeles’ claim:

“There was no documentation of loans and there was no intention of paying back”

At the start of the trial last year in July, Karpeles denied the charges of data manipulation and embezzlement proclaiming ‘I swear to God I am not guilty’ in a statement as CCN reported at the time.

Then Karpelese argued that the funds he had allegedly embezzled were not client funds but revenue generated by the defunct bitcoin exchange. Karpeles blamed the loss of the estimated 850,000 bitcoins to hacking. The loss of the bitcoins led to the collapse of the exchange in February 2014.

Tech Investment, Canopy Bed and Call Girls

Some of the ventures the prosecutors alleged Karpeles had transferred the misappropriated funds to included a 3D printer business which the ex-CEO of Mt Gox purchased for an estimated 315 million yen. Karpeles is also alleged to have used 6 million yen to purchase a canopy bed. Additionally, karpeles was in 2015 accused of spending an unspecified amount on prostitutes.

Karpeles’ legal troubles are not limited to Japan though. In the United States, a lawsuit was filed against Karpeles several months ago by former clients of the defunct bitcoin exchange. However, through his lawyers Karpeles has argued that a U.S. court has no personal jurisdiction and therefore the lawsuit ought to be dismissed:

“Mr. Karpeles expressly asserts that this Court lacks personal jurisdiction over him and preserves this objection and argument for all purposes…Because this Court lacks personal jurisdiction over Mr. Karpeles, this proceeding against him must be dismissed with no further actions taken, including but not limited to the entry of any default,” a motion to dismiss the lawsuit read as CCN reported four months ago.

A determination is yet to be made by the U.S. court on the fate of the lawsuit.

 


Source
Author: Mark Emem
Image Credit

Mt. Gox Preps To Return $1B In Stolen Cryptocurrency To Victims

Claims can now be made online

The floodgates have opened for victims of the long-running Mt. Gox saga, which involves over a billion dollars in lost cryptocurrency. Almost five years later, claims can finally be made to have the stolen money returned.

TIP

A press release has been posted on the Mt. Gox website, along with an online tool for submitting claims. If online is not suitable, they can be made via post. It should be noted that this process is strictly for individuals – claims for corporate creditors will have to be filed at a later date.

As with the bankruptcy proceedings, the Rehabilitation Trustee has built a system on which users of MTGOX’s [sic] Bitcoin exchange can file proofs of rehabilitation claim with respect to the claims for return of cryptocurrency and money against MTGOX. […] Users around the world can, without using time or money, easily participate in the Civil Rehabilitation Proceedings through filing proofs of Exchange-Related Rehabilitation Claim in accordance with the Civil Rehabilitation Act of Japan and other laws and ordinances.

Mt. Gox was a pioneer in online Bitcoin exchange. It opened in 2010 and in just four years grew to process more than 70 percent of the world’s Bitcoin trades. In February 2014, Mt. Gox suddenly went offline, claiming that over 850,000 Bitcoin and $28 million in fiat had vanished.

LIONBIT

The Japan-based exchange blamed hackers and a security flaw for the loss. A few weeks later, it just happened to find 200,000 Bitcoin, just laying around. It then proceeded to sell huge amounts of cryptocurrency when markets were at their peak – many attributing the series of sell-offs to massive price drops.

By the time the Tokyo District Court had decided to halt bankruptcy proceedings and start civil rehabilitation, around 170,000 Bitcoin and Bitcoin Cash were all that was left to distribute amongst its angry userbase. Still, that’s over a billion dollars.

Mt. Gox chief, Mark Karpelès, expressed regret over the lengthy process in an AMA session earlier this year. His trial commenced last month – where he stands accused of embezzlement and data manipulation. He pleaded not guilty.

All claims must be filed by October 22, and will go directly to Japan’s Civil Rehabilitation Trustee. By February next year, claims will have been judged and the redistribution of what’s left of Mt. Gox’s assets will have begun. This has surely been a very long five years for all involved.


IZX

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Source
Author: David Canellis
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