Hedge Funds Are Buying Mt Gox Bitcoin Claims

Mt Gox creditors have waited for over three years to see some of their lost bitcoins returned, but the end is still not in sight. However, a number of them may be able to cash out soon since some hedge funds are now buying Mt Gox claims, offering 15 percent of the claims’ value in cash.

Also read: CoinLab Lawsuit Delaying Mt Gox Payouts: Trustee 

How to Sell Mt Gox Claims

A website called Mygoxclaim, has been created by some Mt Gox creditors to connect Hedge Funds Are Buying Mt Gox Bitcoin Claimsclaimants with interested buyers. According to the Financial Times, Daniel Kelman, an attorney representing creditor interest in the case and a Mt Gox creditor himself, is one of the people responsible for setting up the site.

Created last week, this website serves “as an information portal and liaison to help you sell your claim in the MtGox bankruptcy”. The owners claim to have friends in finance and found some people interested in purchasing claims. “There are indeed parties interested in purchasing claims on a claim by claim basis”, they wrote, adding that:

We’re in touch with third parties who are interested in purchasing claims and can help broker a deal. Purchasers are interested in claims above $10,000 USD in value, but every claim will be considered.

“The process is simple”, the site noted, adding that interested sellers need to send an email with their claim information including name, claimed amount, and whether the claim is in bitcoin or fiat. “We need sufficient information to identify you and your claim so we can get you an offer”, the website says. In addition, “serious inquiries only”, it further informs citing that “there will be due diligence to make sure your claim is real before any transaction takes place”.

Mt Gox Creditors

When Mt Gox closed its doors for the last time in late February 2014, it had already been denying all withdrawals from the exchange for several weeks as the price fell sharply. In April 2014, the exchange announced that around 850,000 of their customers’ bitcoins were missing.Hedge Funds Are Buying Mt Gox Bitcoin Claims

Local Japanese investigators were quickly brought in but investigations have been slow. In November 2014, bitcoin exchange Kraken was appointed by the Japanese court to help with the investigation of missing bitcoins and the distribution of assets to Mt Gox creditors. Last May, Kraken confirmed that the amount of bitcoin held by the Mt Gox estate is approximately 202,185 bitcoins, which represents less than a quarter of the amount lost.

According to Kraken, 24,750 creditors have filed claims as of last May. The list of all eligible claimants can be found on the Mygoxclaim website.

Possible Incentives to Sell

At least four hedge funds in the United States and Japan have begun buying or offering to buy claims from many thousands of Mt Gox claimants, the Financial Times reported. Claimholders can sell their claims now and “receive 15 per cent of the yen value of each Hedge Funds Are Buying Mt Gox Bitcoin Claimsclaim in cash” the publication was told.

“For three years we have followed the proceedings and grown increasingly frustrated at the slow pace of events”, Mygoxclaim website owners wrote. The claim is now going on its fourth year and could take significantly longer to settle since there are also five other Mt Gox-related legal disputes going on. For example, the $75 million lawsuit filed against Mt Gox by its former business partner Coinlab has to be resolved before claims can be settled.

Given a long wait time ahead for claimants, Mygoxclaim website owners noted that:

It has been three years and the end is not yet in sight. For those who don’t want to wait, or who need payment now, or who simply think they would be better off investing whatever return they could get on their own, there is now an option worth considering.

Do you think Mt Gox creditors should sell their claims? Let us know in the comments section below.

Images courtesy of Shutterstock, Mt Gox, and Kraken

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  • Marcello

    Three years and the end is not yet in sigh, we are losing more for the delay of the investigation than for the mtgox bankruptcy itself. It is a scandal in the scandal.

  • Greg Greene

    This article is such bullshit an I am reposting the same comment that I have under the article on cointelegraph.com. It’s merely a regurgitation of the FinancialTimes articles with no effort to establish if there are, in fact, any hedge funds that actually exist. As I wrote earlier,

    The FT article states that, “according to people with direct knowledge of the situation, at least four hedge funds have begun buying or offering to buy claims from (Mt. Gox account holders)…”
    Who are they? I find it odd that they don’t name them. If I were to guess, I would bet that this Daniel Kelman character does not have any hedge funds lined up yet to purchase Mt. Gox accounts. Instead it appears that he is building a database of former Mt. Gox account holders to present to potential investor “hedge funds”, and will subsequently take a commission for the service as noted on its site. The FT article does not provide any sort of source that these hedge funds exist other than the claims of Daniel Kelman of mygoxclaim.com. Further CT merely regurgitates this same information without any further investigation.
    Even if a hedge fund existed to purchase these, why would they pay 15% of the account? Unless they know something different, the max account holders will receive is ~24% of their account based on 202,000 bitcoins recovered of 850,000 lost. This does not even include the lost fiat in Mt. Gox accounts. If you figure attorney and court fees will add up to at least $50 million, account holders won’t come close to 15%, and that’s a conservative estimate.
    Something is not right with this story, and as stated previously, this looks more like another scam to attempt to squeeze blood out of the Mt. Gox turnip.

    • Kevin Helms

      Hi Greg,

      Thank you for your comment. I understand your concern so let me share with you some facts we know.

      I reached out to Daniel Kelman who confirmed that there are hedge funds involved. I tried to get him to name some but his response was “I can’t mention names. I don’t have authority to say who is interested in buying”.

      While I share your frustration of not knowing which hedge funds are interested, I also understand why they would choose not to be named. They are not subject to a lot of regulations compared to other regulated investments, like mutual funds. As such, it is not uncommon for them to not reveal much about themselves or what they are investing in, let alone what they are ‘interested’ in investing in.

      Let me be clear that I am not endorsing any investments or Daniel’s story in any way. I am simply reporting on the news so that my readers stay informed.

      I would also like to take this opportunity to make sure that my readers know that they need to exercise caution when dealing with hedge funds in general. As the SEC website says: https://www.sec.gov/investor/pubs/inwsmf.htm

      “Hedge funds are not mutual funds and, as such, are not subject to the numerous regulations that apply to mutual funds for the protection of investors — including regulations requiring that mutual fund shares be redeemable at any time, regulations protecting against conflicts of interest, regulations to assure fairness in the pricing of fund shares, disclosure regulations, regulations limiting the use of leverage, and more.”

      Thank you, everyone, for reading my article.

  • Only 15%? Hell no. If they’re serious about buying, I want at least 50%. We both need to make money on the deal, and 50% is what gets you in the door to start the discussion, but isn’t necessarily what I’ll accept if someone bids higher.