Original source: Protos
Original compilation: GaryMa Wu Shuo Blockchain
When Mark Karpelès MtGox exchange went bankrupt in 2014, a decade-long drama began. Today, it has become very difficult to determine who owns MtGox Bitcoin claims, as many claimants have sold their claims to third-party speculators.
Additionally, customers have learned that Russian nationals Alexey Bilyuchenko, Aleksandr Verner, and their accomplices stole at least 647,000 Bitcoins during MtGox’s operations, representing the vast majority of customers’ total 850,000 Bitcoins.
Of the 647,000 Bitcoins, 300,000 went to an exchange, BTC-e, whose operator was extradited to the United States on money laundering charges.
Despite these stolen Bitcoins, as of September 2019, MtGox’s Japanese bankruptcy trustee disclosed holding approximately 141,600 Bitcoins and 142,800 Bitcoin Cash (BCH). At todays prices, its Bitcoin and Bitcoin Cash value is approximately $4.8 billion.
The bankruptcy trustee also holds hundreds of millions of dollars in cash, which is dwindling as bankruptcy legal fees continue to decline.
As of September 2019, MtGoxs bankruptcy trustee Nobuaki Kobayashi had received 8,095 formal claims from creditors worth approximately $8.2 billion at the time. At that time, the trustee had admitted only $1.6 billion of those claims and was still processing the rest.
An early report from the bankruptcy trustee counted 24,750 MtGox customers who had made claims. This number is consolidated into 8,095 formal claims from trustees, as many customers choose to file their claims through consolidated claims offered by third parties like Kraken.
These 24,750 claimants represented only 2% of MtGoxs total 1.1 million customer accounts in 2013. In fact, the vast majority of MtGox customers either had balances close to $0 or were able to fully withdraw their funds before the exchange completely collapsed in February 2014.
A brief history of MtGox
Jed McCaleb founded MtGox.com in 2007 as an online trading platform for physical cards. However, by 2010, he had transformed MtGox into a Bitcoin exchange.
In 2011, Mark Karpelès acquired Bitcoin from McCaleb, and in September of the same year, Alexey Bilyuchenko and Aleksandr Verner hacked the exchange and began stealing Bitcoin from its wallet.
By January 2014, MtGox processed at least 70% of the worlds Bitcoin transactions, and in 2013, it processed more than 90% of all Bitcoin transactions.
The exchange went bankrupt in February 2014, leaving at least 141,686 customers with their Bitcoins in bankruptcy proceedings.
Major MtGox Bitcoin Claims Owners
MtGox claims are highly concentrated among the largest holders. Only 226 claimants own more than 50% of MtGoxs claims. These 226 claimants could receive 84,650 Bitcoins.
Researchers found that as of August 9, 2022, the median claim was just $92,500.
The identities of each claimant are not being made public due to Japans bankruptcy proceedings. However, many claimants voluntarily revealed their identities to the media. Here is a list of some of MtGoxs largest known creditors:
MtGox Investment Fund (MGIF): As of March 8, 2023, MGIF was MtGoxs largest creditor.
Fortress Investment Group: Not to be confused with Fortress Trust, this group has offered cash buyouts to MtGox claimants.
Kraken: Krakens Jesse Powell has a long history of helping MtGox customers. He has worked as a consultant at MtGox. At Kraken, he created a portal for thousands of victims to submit claims. Many smaller MtGox claims are consolidated through Kraken.
Tibanne: Claims to own up to 88% of MtGox.
CoinLab: Claims MtGox owes it at least $170 million and possibly as much as $16 billion. In 2019, CoinLab escalated one of its lawsuits to a staggering $16 billion, challenging a revenue-sharing agreement with MtGox. Its $16 billion claim far exceeds the combined claims of all other creditors and exceeds all assets held by MtGoxs bankruptcy trustee. The settlement figure for the lawsuit is uncertain.
Jed McCaleb: May own 12% of MtGox.
Bitcoinica: Demanding $29 million.
Roger Ver: Claimed that 577 Bitcoins were personally lost.
Bitcoinica and MGIF jointly hold about 20% of the claims. In February 2023, they agreed to take about 70% of payments in Bitcoin to ease concerns about sudden sale orders. They decided to collect their compensation this year rather than wait for other lawsuits to be resolved. MGIF later reiterated that it would not be selling Bitcoin immediately.
Kraken and Jesse Powell
Roger Ver and his colleague Jesse Powell tried to help MtGoxs customers in the days before its collapse. Kraken was later founded by Jesse Powell, who also tried to get MtGox back up and running after a hack in early 2011, while Mark Karpelès took some time off. As detailed in Nathaniel Poppers historical book Digital Gold, both men tried but failed to help Karpelès avoid bankruptcy.
In 2014, the MtGox bankruptcy trustee selected Kraken to assist with a number of claims. Kraken said it will assist in the investigation of lost or stolen Bitcoin, create a system for filing and investigating claims, help distribute Bitcoin and fiat currency to creditors, and convert between Bitcoin and fiat currency.
Attorney and MtGox creditor Daniel Kelman created MyGoxClaim.com where certain claimants can sell their claims to interested buyers. Kraken helped facilitate the settlement of some of these claims. Daniel Kelman noted that claims buyers are primarily interested in claims worth more than $10,000. The Financial Times also reported that four other hedge funds were bidding for the claim.
As of May 26, 2016, 24,750 creditors had filed claims through Krakens platform. The total amount of claims accepted was US$417,436,518. The majority of the fiat currency value of the claims rejected by the bankruptcy trustee came from one claim, 260 trillion yen (JPY), and the total value of the rejected claims was 263, 473, 658, 709, 868 yen (over 20 One hundred million U.S. dollars).
MtGox claims are worth a pittance relative to today’s dollars
After MtGox finally collapsed, users who lost their Bitcoins had to wait until at least April 2015 to begin filing claims. The final deadline for claims is March 2023. The trustees of MtGox offered a civil rehabilitation plan that included payment of 90% of the value of the lost assets.
Due to the lengthy bankruptcy proceedings, some smaller MtGox users naturally gave up and sold their claims to third parties such as Fortress Investment Group.
Fortress Investment Group offered up to 80% of the claim amount. It has reportedly been buying claims for years, once paying as much as $1,300 per Bitcoin. One of its selling points is that claim holders no longer have to wait for payouts from civil restructuring plans and can receive cash or Bitcoin immediately.
Fortress Investment Group’s willingness to pay more than $1,000 per Bitcoin reflects the evolving state of legal claims against MtGox’s bankruptcy estate.
Initially, or at least as of February 2017, buyback offers for MtGox claims were based on the price of BTC at the time MtGox entered liquidation: approximately $438 per Bitcoin. At the time, the purchaser provided the claimant with a buyback offer discounted from that calculation, rather than the current value of Bitcoin.
Latest developments: In December 2023, Mt. Gox’s creditors said on Reddit that they had received compensation payments. Multiple posts on the Reddit page r/mtgoxinsolvency show that Mt. Gox is sending refunds denominated in Japanese yen to users via PayPal, nearly a decade after the funds were locked on the exchange.
In November, some MtGox creditors received an email from the bankruptcy trustee stating that the trustee planned to start repaying creditors soon and was working to start repaying them in cash in 2023; however, due to the large number of reorganization creditors who will be repaid, Repayment types vary and require different preparation and processing times for repayment, which will last until 2024. Mt Gox will distribute its holdings of 142,000 BTC, 143,000 BCH, and 69 billion yen, among others.
