Everyone involved in the cryptocurrency space is watching the price of bitcoin very closely these past few weeks. One person watching the value of bitcoin rise is the former CEO of the now-defunct Mt Gox bitcoin exchange. Mark Karpeles says he’s “monitoring the situation” as the Mt Gox bankruptcy may seemingly become solvent thanks to rising price of bitcoin.
Can the Mt Gox Bankruptcy Become Solvent?
Last week a post on the subreddit r/mtgoxinsolvency detailed that “Mt Gox reached around 78.5 percent of the claims value today.” The person also asked the former CEO what would happen if bitcoin’s price makes it to 100 percent of the claims value. Karpeles appeared on the Reddit thread detailing his interest concerning the current situation. The former Mt Gox executive says because Coinlab is suing the company it really makes the claims value around 59 percent. Coinlab, the venture-backed blockchain company, has sued Mt Gox for $75 million before the company went bankrupt.
Karpeles is Monitoring the Situation
“I am monitoring the situation,” explains Mark Karpeles. “We are still around 59.92% (74.29% if excluding CoinLab – but it can’t be excluded as the lawsuit is still in progress). Remember to use JPY values for calculation, since USD is bound to not be exact.”
Following this statement, bitcoin developer Lukejr asks Karpeles if there is a “real possibility Mt Gox can exit bankruptcy if it reaches 100%?”
“Yep, but not to reopen as Mt Gox,” Karpeles replies. “The idea would be to establish some kind of trust to distribute BTC outside of the bankruptcy process, allowing for their easy distribution. The plan is to have recovered bitcoins distributed as is to BTC creditors, on the address they provided to receive the original payments.”
As things are right now, creditors cannot receive more than the approved claim amount (in JPY), which means that future recovered bitcoins would potentially be distributed to shareholders instead.
‘The Inability to Compete With Today’s Exchanges’
Many people discussing the subject on the forum were quite pleased with hearing Karpeles responses to questions. People further asked what the possibility was of Mt Gox re-opening and offering creditors a chance to become company shareholders as well as possibly cover the cost of some of the missing bitcoins.
“That is an alternative, but it would involve re-launching Mt Gox, which would probably not work for many reasons,” Karpeles explains. “Having a trust set up and distribution list kept for distribution of recovered assets is perfectly legal, has no running cost and be fair. Compliance cost in the US is way outside of Coinlab’s reach, and I’d be surprised to hear Coinlab was ever planning to be compliant.
Anyway, the largest reason why Mt Gox cannot be relaunched is the brand image, followed by the inability to compete with today’s exchanges.
100 Percent Value Must be Met Before Starting the Process
The discussion seemed very positive for those who lost funds during the bitcoin exchange’s hack in 2013 which was followed by bankruptcy. Karpeles then goes on to explain that most of the process cannot begin until the 100 percent threshold is met. In regards to the Coinlab lawsuit Karpeles says someone can order documentation from the court to help with the process, but he can’t afford to do that at the moment.
In theory, anyone could do it, so if someone does I’ll be happy to host the files on dropbox or anything,” Karpeles adds.
What do you think about Mark’s statements about the bankruptcy becoming solvent? Let us know in the comments below.
Images via Pixabay, Mt Gox, and Forbes.
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