Andy Pag, who founded Mt. Gox Legal, has resigned his position as leader of the group, which represents the majority of the now-defunct Bitcoin exchange’s creditors (users who still had funds on the platform at the time of its implosion.) While some reports have said that users could get paid as early as this year, Pag believes that the over-sized claim of startup incubator and one-time Mt. Gox partner CoinLab will slow the process to a crawl.
CoinLab’s $16 Billion Claim Slows Civil Rehabilitation Process
Mt. Gox victims may not see their lost crypto funds for years. | Source: Shutterstock
It could be years before creditors ever see any money. The cryptocurrency available to disperse was already partially liquidated, but the crypto exchange still holds thousands of BTC, Bitcoin Cash, and Bitcoin SV, all of which amount to a substantial sum.
CoinLab has filed a $16 billion claim on the Mt. Gox estate, claiming that it deserves to be made whole as part of a profit-sharing agreement. $16 billion far outsizes the amount that existed in the failed exchange’s coffers at the time of its failure. Brock Pierce, who argues a rightful claim to Mt. Gox’s assets, has estimated the exchange’s assets at present to be around $1 billion. CoinLab’s $16 billion claim is interesting because they had previously only demanded $75 million – the amount of a lawsuit filed against Mt. Gox in 2013 alleging that the exchange had not lived up to its end of a partnership.
The CoinLab claim introduces kinks to the process of getting creditors paid due to the voting rights aspect of civil rehabilitation. CoinLab would effectively have more voting rights than anyone else if its claim were approved, but its request has not received approval. The Mt. Gox trustee rejected the application as soon as it was received, but CoinLab is fighting that. Creditors on Reddit are furious about the matter.
Last June, when Mt. Gox re-entered civil rehabilitation, many believed payments would be disbursed – in cryptocurrency or some combination of crypto and fiat – by the end of 2019. It now looks like years will add on to the process, and many place blame squarely at the feet of CoinLab.
Andy Pag Dumps Bitcoin Claim at Massive Discount
Mark Karpeles was recently exonerated of most criminal charges related to the failure of Mt. Gox, and he seeks to have his singular conviction overturned. | Source: Quentin TYBERGHIEN / AFP