Bitcoin Forum

The simple and clear plan how to resurrect Mt Gox.

What follows is a summary of where I read Mt Gox is at presently and developes a simple strategy for full recovery and beyond.
First of all I would like to say that the worst-case scenario and last case resort would be to declare Mt.Gox bankrupt and to put Mark Karpeles in a jail.
This will not return the customers funds and will not restore confidence to the bitcoin concept.
According to the leaked, but officially unconfirmed document, the balance of Mt.Gox looks like this now:

Active (Funds currently accessible by Mt.Gox right now):
-         2,000 BTC
-         22,430,000 USD (does not include frozen 10,500,000 USD)

Passive (Customers’ funds):
-         624,408 BTC
-         55,000,000 USD

The proposal is: Turn all of Mt.Gox customers into the shareholders by issuing 72,440,800 shares.

-        The user-base from mtgox.com will be converted into user-base gox.com.
-        All BTC account balances in mtgox.com will be converted into mtgoxShare account balances in gox.com by price 0.01 BTC per share.
-        All USD in mtgox.com account balances will be converted into mtgoxShare accounts balances in gox.com by price 5.5 USD per share.

It is possible to recreate and re-brand the Mt.Gox business completely (including software reengineering) using 2,000 BTC and 22,430,000 USD which Mt.Gox has now.

The recreated site http://gox.com will allow trade pairs:
-         mtgoxShare/BTC
-         USD/BTC
-         Other fiat currencies/BTC

-        All BTC trade fee will go to pay share's dividents.
-        All USD/other fiat trade fee will cover operational cost to run the business.

At the end of each week the dividends will be credited into BTC user’s accounts.

That is very simple and transparent scheme will allow each shareholder to see their profit instantly and use it weekly.

This simple and straight-forward plan will facilitate returning funds to existing customers and even bring some potential profit to them. It will allow customers to have the choice: to either sell shares at market price, which will be established immediately after gox.com goes live and withdraw it instantly, or earn dividends with the potential for capital gain recovery and, probably, have a benefit from raising shares prices.
It is obvious that with a clear, open and transparent plan there will be many investors who will deposited BTC and USD into gox.com for the opportunity to invest in one of the oldest and historically the biggest and most trusted bitcoin business institution.

The good points are:
- Mt.Gox has a well-trained AML team with lots of experience in dealing with banking and regulations.
- 22M USD is enough to recreate the business without additional investment.

I personally trust Mark Karpeles and even welcome him to stay in the position of CEO because:
- He knows the business very well
- He knows what mistakes he made and he knows how to avoid similar mistakes in future.

Naturally, the final decision regarding Mark Karpeles position would be first in the hands of the shareholders and second according to Mark’s own preferences.

Software development for gox.com should be the responsibility of someone other than the CEO because the CEO of such a complicated business cannot competently undertake the position should be independent.
22M USD is adequate to hire excellent developers to do the software.
However, software development for gox.com should be delegated to someone other than the person responsible for running a complex business such as Mt.Gox.

According to the ancient proverb: What doesn’t kill you makes you stronger.

I personally believe in a strong and bright future for gox.com.

If Mark filed "Bankruptcy protection" it is very good news.

The only real way to return our funds: to protect Mt.Gox against bankruptcy, to restart the businnes and to became shareholders.

So, the question is: how to submit this plan to people who make decision about Mt.Gox ?

I think there are many of Mt.Gox customers who would love this plan.

Do you have any idea how we can come together and make it works?

@Magical Tux


more or less

Not to forget the coinlab incident. 5M$ for MtGox if they can win the fight, but 75M$ penalty if they lose.

I do not count these 5M.
22M it is what Mt.Gox has right now.
If they lose, then 75M penalty will be for Mt.Gox, but  gox.com will be the brand new enterprise and not liable for this penalty.

So, if anybody here has a direct contact with Magical Tux and can submit this plan to him?

account holder shares is a good idea, i support that

I also support that, but I would not say 1 share = 0.01 BTC = 1 $, which means that 1 goxcoin == 100 goxdollar.

I add that this is the occasion for Mark K. NOT to prove he is a thief. If he accepts to do something like this, he MAY be innocent, otherwise he is almost for sure guilty (he runs away with the bitcoins).

Best regards,
ilpirata79

Might work out to at least get the amount of value in fiat back if bitcoin goes to moon the next years.


But before we do anything.....

Fat fuck karpeles has to come out with the truth.
WTF

This is the first interesting and worthy post since two weeks.

No, this are two undepended types of shares:
- mtgoxBTC - nominal price 0.01 BTC
- mtgoxUSD - nominal price 1$

1 mtgoxBTC is not equal 100 mtgoxUSD.
Price of mtgoxBTC/mtgoxUSD will be enstablished by market.

yes cool i'm in... i agree with this plan... i lost 8.86 bitcoins in mtgox  >:(

No, not the same.

Let's say two trades are here:

1. 1 BTC sold for 500 USD. 0.4% fee. Gox has two fees: 0.004 BTC and 0.2 USD

2. 1 BTC sold for 1000 USD. 0.4% fee. Gox has two fees: 0.004 BTC and 0.4 USD

As the gain in bitcoins and in dollars is the same when a trade occurs,
we have that who got a 1 gox btc gets 1/624400 of the bitcoin income, while who got 1 gox dollar gets 1/55000000 of the dollar income. Therefore, as the two incomes are the same, if we say that R is the exchange rate goxcoin/goxdollar, we have

1/624400 = R * 1/55000000 => R = 88,08

With the share composition you propose 1 gox btc is about 88 gox dollars.

The right way to do this is to have one type of share and establish what is the R value (not easy).

Best regards,
ilpirata79

You want Mark Knuffles to stay in the CEO role because he fucked it up so very badly before? That's irrational.

Your way of assigning shares is kind of "random" because it depends on the relative amounts of liabilities in dollars and in bitcoins of Mtgox. Instead we should assign shares in a more fair way, as, for example, who got 1 goxcoin (on the exchange) gets the same of who had 500 gox dollars.

Best regards,
ilpirata79

After some thinking I would agree with you, probably you are right. It will be more fair to convert 55M USD balances into let's say 100K BTC by current market price 550 and to issue 72,440,000 shares
wich are entitled for USD and BTC dividents.

It is idea just appeared: all of BTC trading fee will go to dividents and all of USD trading fee will cover operational cost to run the business.

First of all I personally trust him. Secondly he made mistake, he know how to avoid that.
But you are right as well: it is your opinion.
That is why I am saying that position of Mark must be determined by shareholders vote.

And who are you ,that you're saying you personally trust him? NOBODY in the bitcoin community is worth trusting and especially not by proxy of someone else trusting them.

Otherwise i agree with the plan

mark wont be continuing as CEO of gox check video in link

http://www.dailymail.co.uk/news/article-2570159/Bitcoin-firm-hacked-virtual-bank-heist-goes-bankrupt-leaving-NO-prospect-investors-getting-hundreds-millions-pounds.html

I have changed the plan with these new concepts, see topic-start message.

Any comments for the new plan?

Nice plan

debt-to-equity swaps are often done; even for countries this is possible (by turning bonds into money). I bet we will see some more examples in our lifetime   8)

Good. How to submit it to people who can do that?

If 1 goxcoin (on the exchange) gets the same of who had 500 gox dollars you can count me in.

I would rather have a shares in a crappy company than have nothing.

+1 ideally i wouldnt want to get my goxbtc valued @ $160 with no choice

lol why do you guys love pain so much ?

let it die

lets say it comes back to life.. he's fucked you over how many times now ? but ya.. ok so pretend all good.. 3 months later.. same deal... and again
and again as its been for years. ya im sure mark really cares about all of you... hugs for all

i just dont get it...

V4vendettas answered before you asked: better to have shares of a crappy company that have NOTHING!

Best regards,
ilpirata79

I think this is a good plan also, but withdrawal of sold shares isn't possible right away, or do I miss something?



There are no funds left when the exchange is recreated. People who want to get out immediately can't.

Ow one more thing. Mark needs to not have any control of anything ever and has to write an essay and mail it to every single gox customer explaining why he did not commit Seppuku.

So how the hell would we get this idea recognised ? I take it we need to get a mass petition going and get the Japanese appointed official overseeing this all to read it ?

A big job and I don't consider myself anyway near as smart as many lurking around here but I will say this I'm willing to bust my ass helping to get it done.

Any known hero's want to start rolling with this? You have my sword (or chubby fingers and keyboard in this case).

In this way is as tough as we bought Mtgox for about 450 million dollars...
Is that a fair price? To be the case it should generate at least 4-5% of that amount in profit every year, which is 22,5 million dollars. Is that the case?

Best regards,
ilpirata79

I propose Andreas Antonopoulos as CEO :D

Best regards,
ilpirata79

I think they already are considering a plan like this. It is mtgox however that should take the initiative and, in doing that, it should ask for the creditors approval (all of us).

Best regards,
ilpirata79

It simply takes Gox to mail its customers the proposition and ask for a vote.

Thing is what happens to those not wanting to play along and how is this fair on them. Granted nothing is fair in this whole mess but still. What kind of % would they need to pass this and are there any laws on it?

My opinion is: Friedcat as well-trusted person here would be nice as well.
The only problem I can see with him: he do not have experience to run such type of business.

Those who not wanting to play along have little choise: Mt.Gox go bankrupt and they will have nothing or gox.com will go live and they can sell their mtgoxShares straight away with a big discount.

Nice idea, but given the state of play, and the time Karpeles has had since shutting down, I would be surprised if there is a real database of customers.

Assume Karpeles has deleted records, then surely it would take experts to recover them. Which authority would arrange the recovery?

Karpeles has shown that he is a liar, fraudster with a sociopathic personality disorder. Given that, and assuming it is technically possible, I see no reason why he would not have spent a few days getting rid of people. The unconfirmed accounts would be the easiest.

I don't mind being wrong, and would be interested if someone could explain why it would be impossible for him to have done that.

I don't think anything can stop him doing that if he decides to.

I disagree. Dollars are dollars ,goxbtc is traded at the price which the buyers are willing to pay for it.

According what I have heard about Mark he is trusted and genuine person.
As fact he is not hiding now and still open to public.
The only way for him to save the face and not go to jail is: to save user database and to help the community to create a new gox.com by create the list of shareholders
and provide access for the new CEO to domains mtgox.com, gox.com and to the funds which are left on MtGox accounts.

Is an imaginary lost dollar worth more than an imaginary lost Btc considering they are both lost and Imaginary ?

"Mark" is not trustworthy, he is a liar, thief and fraud. Why you would think differently is frankly staggering.

That is your subjective opinion.

Dollars are not imaginary, the only thing that is imaginary and non-fungible is bitcoin ,especially when left on an exchange, so yes, you are 100% wrong when implying that suddenly we should fix the market price of goxbtc to be 5x the price of the lost usd. Very very very wrong. And very greedy.

Once you have sent a dollar to Mtgox is not a dollar anymore: it is a gox dollar.
In the same way, when you send a bitcoin to mtgox, it is not a bitcoin anymore: it is a gox bitcoin.

You can off course discuss about the value: 1 gox dollar is 1 dollar? I don't think so.
1 gox btc is 1 btc. I don't think so as well.  How many gox dollars is 1 gox btc worth? I don't know.

Even if mtgox has more dollar assets than bitcoin assets, that does not mean it has to pay only customers with a usd balance. It has to pay its creditors, following what the law says...

Best regards,
ilpirata79

You sold at $100 right ?

I still don't see how a dollar that does not exist is not imaginary. You do understand that from my perspective you are the greedy one attempting to devalue the worth of my something that does not exist over you non-existent.   Anyway a pointless exercise in debate no doubt as we don't have a clue if its is really on the cards yet. Feel free to continue your debate with others who have the time for it.

I honestly don't known how anybody can manage to move this plan forward. There are folks that loose everything in MTGox. Now, they are organizing, some of them want to initiate legal actions in Japan and nobody of the visible faces of BTC ecosystem has made any statement that could help to organize it in this direction.
Being said that, I really hope to be wrong and that your plan can help people to recover (part of) their funds

I'll be asking my Japanese Lawyer exactly that today... i will post back here

The answer is (I think anyway) yes /no/maybe.

10k BTC per month in trading fee's and I dug this up from other threads so don't shoot me for it.

Due to the Damage to the brand we can assume its not going to have anythign like the trade it used to have lolz?

If it did and that's a massive IF 120k btc a year. So yes no maybe. but better than a kick in the nuts.

and your a hero for it bro again thank you for sharing information (that cost you) with the community.

I actually loved the plan, if they really innocent they should do something like that
However I don't get the BTC in cold storage are 'actually stolen' by 'hackers'

Sorry for cross post but yes bro I think we are all either thinking its bullshit or are gobsmacked by mark.

I don't think there is a place for debate about anything, just look up the meaning of a (bitcoin) exchange. The goxbtc have risk in them different from the bitcoins on any other exchange ,that's why the price differs from exchange to exchange. I don't want to devalue anything, the market says the price of a goxbtc was at 132.5$ at the time the exchange stopped, let the exchange open and the bid will proceed in bidding the price of the bitcoins.

To me ,if only and mostly the bitcoins are lost ,they should be turned into basically goxshares ,and when you want to liquidate,  it will be what the market value for those is at the time. Change the senior management of gox and continue the good work.

You and others in this thread have proposed devaluing dollars, when dollars aren't the commodity being traded on that exchange ,it is the bitcoins that have the fluctuating price in dollars. Dollars are the benchmark, the value of the dollar does not change on this exchange ,it only changes on the forex markets and is defined by the forex markets.

@shadyz

Not trying to annoy you honestly but I didn't read what you posted maybe someone else has time to reply to you.

Me personally I will be happy for us all to salvage anything from this train wreck and will accept what I can get as long as its considered fair by the majority should it come to vote. I don't want to see anyone screwed more over this than they already are. Both you and I are but tiny cogs in all this.

It is Wallstreet work - maybe the Winklevoss twins got the right contacts? It would be in their interest to save the Gox brand because they are whales.

This is a much better plan than a bankruptcy. We have a much better chance to get our money, by having a share in a future, better exchange. Think about it. It could set an example in the bitcoin world.
  The first  completely transparent and crowd sourced exchange, with 1 million users as owners

Upvote this
http://www.reddit.com/r/Bitcoin/comments/1yyrvf/open_letter_to_mark_karpeles_voluntary/

it seems there are a lot of people interested in those gox bitcoins to stay lost. Weird

The Vinklevoss twins, and the investors behind Second Market, should each grab a baseball bat and visit M.K. for a thorough negotiation about this  ;D

My guess is the OP hasn't looked into securities law.  That would be a good place to start.

Yes, bitcoins have fluctuating price: at this very moment each of them is worth more or less 550$... a lot more of 135$.

Best regards,
ilpirata79

You should look at my previous post ,i explained why your current assertion is idiotic.

Why is it? Isn't a bitcoin worth 550$ now?

Best regards,
ilpirata79

Hope for his sake that he's stocking up on lube.

WHY THE F**K DIDN'T ANYONE BRING A BASEBALL BAT?

http://www.bloomberg.com/image/iXZSebiPDN8k.jpg

OR EVEN BETTER, A GUILLOTINE...

http://crisisboom.files.wordpress.com/2011/06/guillotine.jpg

The idea of a bitcoin exchange

• that is run by the same CEO that claims to have had BTC800k+ stolen, as well as the earlier theft of BTC500k that was never adequately explained
• whose shareholders are comprised of the people that were most recently ripped off, themselves having only been ripped off because they sent fiat in to try to buy bitcoins that were miraculously at 20% of market rate

is absolute comedy gold, please do continue. It will be different this time.

Not quite. Civil reorganization in Japan doesn't work in detail like Chapter 11 in the US. Here's an overview of how it works in practice. (http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.139.7014&rep=rep1&type=pdf) In particular, the rights of creditors are different.

An important provision: "The debtor’ management operates the firm and works out a Rehabilitation plan or liquidation, unless an interested party can prove management is incompetent. In a case where the debtor’s management is incompetent, Civil Rehabilitation Law provides the appointment of trustee." Proving that management is incompetent would not be difficult in this case. That's worth doing; that kicks Karpeles out and puts a trustee in.

Also, unlike Chapter 11 in the US, lawsuits against the company are not automatically stayed under civil reorganization. You can still sue.

Incidentally, the average time companies spend in civil rehabilitation is about half a year. But the usual case in Japan is that there's one big creditor, a "main bank". That's not the case here.

talk to Karpeles or/and his lawyers about the proposal(customers->shareholders)

Good.
I personally sent PM to him and submit contact form in the site tibanne.com
Anybody has more direct contact with  Karpeles or/and his lawyers ?

What i don't understand is what's mt.gox plan from now on.

Is he waiting for the all the lawsuits to hit his door or he is trying to somehow rebuild his company while he is covered with backruptcy protection.

I think from what we've seen of Gox and the limited discussion of Japanese bankruptcy law, that the current management would fairly easily be demonstrated to be incompetent and/or dishonest and could be removed.  It'd be up to someone with an interest in it to do something about that, though.

The only problem with that is that it seems likely that would result in the shutdown of Gox, as while the current management is incompetent and corrupt, there probably isn't anyone else capable of running their servers held together with baling twine and bubble gum.

Hi overc,

this sound good.

Have you tried to calculate income of new gox? If we _very_ optimistically suppose, that the average volume will be the same (about 210 000 BTC / week last year), that means yearly volume may be about 11 mil BTC. Fees (0,6 % both sides = 1,2 %) are 132 000 BTC. Can anybody estimate expenses? But if they will fit 32 000 BTC / year, all depositors can be happy after 7 - 8 years.

better to get going than leave it shut even if it would take a while.

Hi, similar activity is on https://bitcointalk.org/index.php?topic=489949.0, maybe you can cooperate / coordinate next steps?