Mt. Gox’s creditors will meet today, March 25, as part of a compensation process that seems to go on and on. This news comes at a unique time: amid a pandemic and with the world on the brink of economic crisis. It calls to mind again the 2014 collapse of Mt. Gox, the Japan-based cryptocurrency exchange that once accounted for 70% of the world’s Bitcoin (BTC) trading, a signal moment in crypto history.
In anxious times like these, people are inevitably asking: Can a failure of this scale happen again? Earlier this week, the crypto hedge fund Adaptive Capital announced that it would cease operations after suffering heavy losses during the March 13 crypto market meltdown. Other disruptions are expected as entire national economies shut down to fight the coronavirus.
A never-ending process?
Meanwhile, the claims and lawsuits against Mt. Gox continue.
Mark Karpelès, the exchange’s former CEO, remains embroiled in an active lawsuit with investor Gregory Greene, as Cointelegraph reported on March 17. Coinlab, a former business partner, has a $16 billion (1.7 trillion Japanese yen) bankruptcy claim against Mt. Gox, up from the $75 million claim originally filed. The former exchange’s 24,000 creditors, meanwhile, are still waiting for a rehabilitation fund overseen by trustee Nobuaki Kobayashi to be distributed. More might be learned from today’s meeting.
Elsewhere, Fortress Investment Group raised its offer to purchase claims from Mt. Gox creditors. As of February, they are offering $1,300 per Bitcoin lost, up from $755 in December 2019.
It seems like a mess, and it’s easy to forget that Mt. Gox was once the largest cryptocurrency exchange in the world, handling more than 70% of all Bitcoin transactions. When it filed for bankruptcy in February 2014, it announced that 850,000 Bitcoins were missing, presumably stolen. A little over 200,000 Bitcoins were eventually recovered, and that’s basically what the parties are now fighting over.