- Brock Pierce, EOS Founder, plans to rehabilitate Mt. Gox
- Pierce’s motives are questioned as there are already plans to repay MT. Gox creditors
- There have also been ‘behind the scenes’ disputes regarding Pierce status as the legal owner of MT.Gox post-bankruptcy.
MT.Gox, the crypto exchange best known for handling over 70% of all bitcoin transactions worldwide in 2014, before having ~850,000 bitcoin (or $450m) stolen during a hack and subsequently filing bankruptcy.
Gox was and continues to be a permanent black mark in the history of the crypto space. Years later, there are now plans to revive the service in order to recover the lost funds and make creditors whole by once again generating revenue.
Brock Pierce, the Founder of EOS and Block.one, is spearheading the plan. In rehabilitating MT. Gox, Brock has promised to:
- Value all claims at 100% of their current value.
- Explore avenues to recover more of the missing Bitcoins.
- Fight the CoinLab lawsuit.
- Distribute any existing funds to creditors.
- Restart a new exchange from MT.Gox’s ashes, in which creditors may receive a 16.5% equity stake for free, enabling additional recovery via profits.
Even though these promises look encouraging, evidence from people who have watched more closely into the plan shows that there are significant pitfalls and hidden motivations behind it.
Pierce promises already seem to be taken care of by the Mt.Gox team
For one, creditors have already solved the problem of being repaid. When MT.Gox filed for bankruptcy in 2014, the claims valuation was priced $483 per BTC. However, the increasing price of BTC over the years meant that the bankruptcy had surplus assets that were required to be distributed to shareholders.
The credits that fought against this surplus distribution won the right to convert the case back to ‘civil rehabilitation’ in 2018 for a fair re-evaluation of claims.
Second, experts who have studied the case don’t believe Pierce claims that the still missing 650,000 BTC can be recovered. Pierce has provided no specific plans about how to recover them.
Third, MT.Gox’s Trustee is already fighting against the CoinLab lawsuit. CoinLab was once partnered with Gox to help them develop their business, but following the crash, CoinLab sued MT.Gox for $75 million and has now increased their lawsuit to an absurd $16 billion. Unless Pierce has conducted some backdoor deals, there’s no way he can help make the lawsuit disappear any faster.
Pierce has promised not to use any creditors funds to launch a new exchange and instead will pay the creditors out as soon as possible. This is essentially what MT.Gox’s Trustee has promised to do. There are no details regarding how Pierce plans to solve the settlement faster than the Trustee (who is one of Japan’s most prominent and experienced bankruptcy lawyers).
False assumption of ownership over MT. Gox
It appears that Pierce’s promises are based on a false assumption that he already owns MT. Gox. Soon after the exchange filed bankruptcy, Pierce Company – Sunlot – negotiated with the CEO (Mark Karpelès) to acquire and rehabilitate it. A formal letter of intent was filed, but the language in the letter only indicated that they would intend to proceed with negotiations.
Mark Karpelès reached out to Pierce at a later date to confirm that the letter was rescinded. However, he received no response from him and was later accused by Pierce for reneging on the agreement.
Ultimately, this sounds like all the more reason for people to steer clear of MT. Gox and any attempts at rehabilitation. With lawsuits still on-going and disputes over who even owns what’s left of the exchange, this is no place for Bitcoin investors to sink their money into.
PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.