Who will get our 200,000 bitcoins?

Kolin Burges50 Comments

Quick summary of the problem – our bitcoins were valued by the trustee at approximately $483 at the start of the bankruptcy but are now worth an order of magnitude more. This means that the MtGox administrators can sell our 200,000 bitcoins, pay us a fraction of the money from the sale, and regard our claims as having been paid in full. The rest of our money may go to the parent company Tibanne, meaning the Tibanne shareholders Mark Karpeles and Jed McCaleb would be the beneficiaries. Karpeles claims he doesn’t want the money because of the personal lawsuits it would attract, but says has no power over the process.

The lawyers were initially upbeat about the prospects of the creditors receiving the full value from their sold 200k bitcoins. But after more investigation their advice is now that it looks like the bitcoin creditors could be paid only the original valuation amount at around $483 per bitcoin, and the value above that would be passed into the company liquidation. Liquidation is performed under corporate law rather than bankruptcy law, and the remaining money in the company would go to the shareholders. They don’t currently know of a way to avoid this situation. This is not good news.

Please note that the rest of this post is my personal opinion and not necessarily that of the lawyers.

The thoughts and plans of the bankruptcy trustee are as yet unknown. He may be able to perform actions which can change this. Give his stature and the uniqueness of a bitcoin bankruptcy, his suggestions hold a deep influence over the bankruptcy court. They must always comply with the letter of the law, but laws are often not clear-cut when applied to particular contexts – especially one as unprecedented as MtGox. And so there could be scope for either movement within the bounds of the law or for varying interpretations of the law.
The trustee’s responsibility is to maximise return to creditors in a manner which is fair and in the interests of justice. If the creditors’ money passed to the shareholders it would be neither fair nor in the interests of justice. The question is how able and willing he is to achieve this within the constraints of the law.

The lawyers have advised that the best way to discuss this situation with the trustee is to ask at the upcoming creditor meeting on 27th September. I’ll be at the meeting to ask that and other questions, and will be providing a report here.
Having been to these creditor meetings before, I expect we won’t get a significant answer on this. The meaty questions are rarely answered. Creditors come out of that meeting looking about as satisfied as a Bitcoin Core member who’s wife just sold all his bitcoins for BCH.

If we don’t get a resoundingly positive and clear answer at the meeting, I’ll regard this bankruptcy and our money as being in a critical state of emergency. At that point I think it should be a major concern for everyone who wants their bitcoins back.
I’ve been making plans for if this happens. I’ll be spending at least the next 2 months working on this full-time and longer if necessary.
For what it’s worth I believe the situation can be resolved, but it may only be possible if we are all willing to push hard enough for it.
Let’s see what happens at the creditors’ meeting.

50 thoughts on “Who will get our 200,000 bitcoins?”

  1. 1. Presumably the trustee should also be sitting on a pretty sizeable holding of Bitcoin Cash. Naturally these also belong to the depositors. Would appreciate if you can request lawyers to look into this as it would conveniently add to available assets.

    2. Are there any developments over the BTC-E funds and will there be any prospects of recovering some or all of these back

    3. Thanks for your work on this, will happily make a contribution to cover costs

    Reply

    • Likewise I’m happy to assist with the costs but only after the btc and/or btc cash is recovered. I don’t understand why it is so unfair for depositors to mtgox, we were scammed initially and now it seems that we are getting scammed again…possibly by the same guy Kaperles or however you spell this b$&@%#£€ name.

      Reply

    • Also what will happen to the btc Gold that we should get allocated? Damn mtgox

      Sent from my iPhone

      Reply

  2. What about the people (like myself) who lost money with Mt. Gox and have never been refunded? I had almost 70 BTC that I never saw again…..

    Reply

  44. Hi there. Really appreciate your threads and keeping us up to date with what’s happening there. I have some btc with mtgox and would be happy to sling you some of the btc I had with mtgox should you be able to advise me on how I could recover my btc. I still have my sign in details for the mt gox site. I did file a claim on their website before the deadline. Please advise what I should do moving forward to get my bitcoin back. Thanks

    Reply

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