Bitcoin Exchange MT Gox Canadian Class Action Partially Certified

October 1, 2014 03:30 UTC

The now defunct Bitcoin exchange MT Gox is in the news again. The Ontario Superior Court of Justice has partially certified a Canadian class action against said Bitcoin exchange, which at one time accounted for 80% of daily Bitcoin exchange volume. The class certification paves the way for the approval of an American settlement started by Jed McCaleb, the original founder of MT Gox who retains 12% ownership, and Gonzague Gay-Bouchery, the exchange’s former Manager of Business Development and Chief Marketing Officer.

The terms of the MT Gox settlement are conditional upon the Bankruptcy trustee Nobuaki Kobayashi approving the Sunlot Plan, a Rehabilitation Plan aimed at restarting MT Gox under new management.

As early as April 2014 a group of entrepreneurs, including the Bitcoin Foundation Board Member Brock Pierce, launched a campaign, SaveGox, following an order for liquidation of MT Gox by the Tokyo District Court. They proposed the Sunlot plan which offered MT Gox creditors the return of 200,000 bitcoins that the liquidator is believed to currently control and approximately 30 million dollars that are believed to be held by the liquidator, as well as 16.5% ownership of the new exchange.

Competition seemed to be heating up when Bitocean, in partnership with OKCoin, offered to MT Gox creditors a similar deal, but with 50% ownership of the company. Coinlab, who at one time worked closely with MT Gox, but following a breakdown claimed $75 million in damages against MT Gox in a pending lawsuit, seemed to suggest in a complaint to the Bankruptcy Court that they too would be interested in taking over rehabilitation of MT Gox. Little however has materialized from all these attempts so far.

A Texas court approved the Sunlot plan this summer in a similar arrangement to the Canadian class action. The liquidator stated at the time that they were not considering any plans as he did not yet have full authority to enter into MT Gox dealings in US. That authority was granted on June the 17th 2014 when the US court granted bankruptcy protection to MT Gox, but there has been little indication of any further developments since, and the liquidator has not yet responded to our request for comments.

See also: Mt. Gox Customers in U.S. and Canada Reach Potential Settlement Aiming for Full Restitution


MT Gox: Empty Gox

MT Gox, once the largest bitcoin exchange and one of the oldest, declared bankruptcy on the 28th of February 2014 following a month-long “suspension” of withdrawals while trading and deposits were still allowed. Mark Karpeles, the CEO of MT Gox stated at the time that due to a bug in a way that transactions are confirmed by the MT Gox exchange, hackers had managed to steal 850,000 bitcoins, currently worth almost half a billion, of which 200,000 were later found in an old wallet.

MT Gox’s version of events was quickly challenged when a scholarly article proved that less than 1,000 bitcoins had been lost to transaction malleability in 2013. Since then, there have been suggestions that MT Gox’s database was modified by hackers through fraudulently inflating their dollar accounts. Mark Karpeles has further indicated that there may have been physical break-ins on the business premises. However, no clear explanation of how the 650,000 bitcoins disappeared has been provided.

The Tokyo police recently stated that they had opened an investigation on 27,000 bitcoins out of the 650,000 “disappeared” bitcoins. It has further stated that they do not believe Mark Karpeles is a suspect, but suggested that they had received numerous complaints by MT Gox creditors which they are currently considering. While the US authorities have requested cooperation in investigating MT Gox from their Japanese counterpart, but there remains no new development on the nature of the theft or who the hackers may be.

MT Gox creditors are currently waiting for the trustee to send Claim Forms, which are to be filed by May 2015, to retrieve a share of the remaining MT Gox assets. The Claims are to be investigated by September 2015 while the actual distribution is unlikely to be completed before 2016.

Images from Shutterstock.

Last modified: October 1, 2014 14:41 UTC

More of: mt gox
Show comments