Sunday, January 29, 2023

Will Mt Gox Creditors Receive Bitcoin Cash?

Will Mt Gox Creditors Receive Bitcoin Cash?

Mt. Gox creditors are beginning to ask questions about who — if anyone — will receive Bitcoin Cash (BCC) tokens from the defunct company’s remaining holdings.

Also read: More Crypto-Hype: Excuse Me, Do You Take Russian Whoppercoin Here?

Karpeles: Trustee Aware but BCC Could Complicate Process

According to Mt. Gox CEO Mark Karpeles, bankruptcy trustee Nobuaki Kobayashi has “confirmed his understanding” of the Bitcoin Cash situation.

Bitcoin Cash logoHowever at this stage, it’s still unclear whether Gox’s bitcoin account holders can even receive BTC, let alone BCC. Karpeles added that the trustee’s office “do not use computers” and would need to be guided through the splitting process, at minimum. It would be more practical to distribute the private keys themselves and let users decide, he said.

Exchange Kraken is overseeing the claims approval and payout process, though the company does not have access to any of the bitcoin private keys.

Karpeles himself is currently facing a criminal trial over data manipulation and embezzlement charges. However these charges do not relate to the disappearance of over 850,000 BTC from Gox wallets between 2011 and 2014.

What, If Anything, Will Creditors Receive?

A ruling at the time of Mt. Gox’s bankruptcy “set” the BTC value at just $483 USD.

The Mt. Gox entity, which has undergone bankruptcy proceedings for over three years, still holds 202,185 bitcoins. Following the Bitcoin chain split of 1st August, it would now also hold that number of BCC.

Kobayashi Gox creditors meeting
Kraken CEO Jesse Powell and Gox bankruptcy trustee Nobuaki Kobayashi

At press time the BCC price is around $600, meaning Mt. Gox technically holds another $121.31 million worth of value. BCC’s price has fluctuated between roughly $300 and $1,000 since it appeared, so that figure is just a reference point.

Even if creditors received the (sometimes rumored) 20 percent of their deposited value in BTC, it would be worth far more than a full payout at $483. Add BCC value to the total and they would receive even more.

Complicating matters is an outstanding $75 million USD lawsuit against Gox by Peter Vessenes’ company CoinLab. The suit relates to a U.S. customer partnership between the two companies and predates the bankruptcy.

Even though the trustee decided in May 2016 which creditor claims were approved or rejected, no-one has received payouts. Kobayashi admited in a September 2016 hearing that the lawsuit was delaying payouts.

Should CoinLab be successful, or agree to a settlement, their claim would take precedence over creditors’.

Past Chances for Gox Creditors to Claim Value

Over the years there have been a number of other altcoin projects that awarded tokens based on provable BTC holdings. These include Stellar Lumens (XLM) and Byteballs (GBYTE). While worth virtually nothing at the times of offer, Byteballs are now $429 each and Lumens $0.02.

The deadlines to claim those tokens have long passed. Kobayashi’s office did not move to acquire them, nor did it ever indicate it would — or legally could. One creditor claimed to have emailed Kobayashi’s office to enquire about them, but never received a response.

Bitcoin Cash is another matter, since it exists on the old BTC addresses and wouldn’t involve claiming them from third parties.

What will happen to Mt. Gox creditors in the long run? Let’s hear your thoughts.

Images via Jon Southurst

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