Bitcoin Forum

http://finance.fortune.cnn.com/2014/03/06/mt-gox-bitcoin-bankruptcy/

http://finance.fortune.cnn.com/2014/03/06/mt-gox-bitcoin-bankruptcy/ (http://finance.fortune.cnn.com/2014/03/06/mt-gox-bitcoin-bankruptcy/)

This can get really ugly fast if the BTC/JPY rate were to increase by say a factor of 10 or even 100 which given the history of Bitcoin is within the realm of possibilities.

"The proposal will need approval from a majority of creditors. Given the distrust directed at Mt. Gox and Mark Karpeles even before the revelation of insolvency, it seems entirely possible that creditors will reject any restructuring bid in favor of liquidation."

Apparently there are other investors willing to run mtgox though? not sure if thats true or not.

Nobody has said they want to take over Mt. Gox, which would require taking over its debts and having enough money to pay them. Who's going to want to take on a half billion dollars in liability to get - what? The Mt. Gox "brand"? That has negative value. The domain name?  Get real.  If the domain ever gets reused, it's probably going to end up connected to some law firm representing creditors. (Check out where madoff.com (http://madoff.com) goes.) The customer base? They just want their money back and never use Mt. Gox again. When troubled banks get taken over, they have outstanding loans; even if they're houses that are currently worth less than the loan amount, there's some value out there to be recovered. Mt. Gox has nothing like that. This is going to liquidation, hopefully sooner rather than later.

The Fortune article has a useful comment: "Finding of fraud or gross negligence in a civil case would almost certainly trigger a criminal investigation, most likely in Japan, that could end with the former CEO behind bars." I doubt that Karpeles can flee the country or disappear. Japan has tight border controls, it's an island chain, he's not Japanese, and his picture is all over the press.

Another key point in the article: "Another unusually high hurdle is the likely necessity and difficulty of Mt. Gox locating a sponsor organization willing to fund its restructuring -- a role commonly taken by a bank."

In Japan, most businesses are financed by banks, usually by one "main bank". Banks in Japan tend to take a more active role in supervising their debtor businesses than US banks do. (See Zaibatsu in Wikipedia (https://en.wikipedia.org/wiki/Zaibatsu) for background.) So the usual bankruptcy situation in Japan has a main bank with more than 50% of the debt, and thus in a position to control the bankruptcy proceedings.  Civil rehabilitation usually means the main bank looks at the business and decides whether it's worth more as an operating entity than as liquidated assets. If so, the bank may help with getting the business going again,  so the main bank can be repaid.

Mt. Gox doesn't have any debt to banks that we know about. (No bank in Japan would have financed them with Mt. Gox's total lack of financial controls.) Probably no creditor has more than 10% of Mt. Gox's debt. So there's no main bank, no value in the ongoing business, and nobody who needs to bail them out.

That probably means that civil reorganization converts to another form of bankruptcy soon.

That hasn't happened yet. And despite at least three lawyers soliciting business on here, nobody seems to be appearing in court in Tokyo to make it happen. We're seeing transactions taking place on Mt. Gox accounts that shouldn't be happening.

There are legal procedures in Japan to kick Karpeles out and put a trustee in, but some creditor has to initiate them.

I had been waiting for a $2200 cash withdraw since November 2013. They kept giving me lines about "changes in our withdraw process has caused delays and we are working through the backlog of withdraws."

Any chance I will be getting this money?

I'm not sure...everybody is asking the same question and we don't even have an organized forum where everybody could express their direct concerns regarding mt.gox issues. my loss is over 35K euros and there is nothing I can do about it right now - there is no single proposal to address this debacle who suffered in this case.   

Correction: really, really much uglier fast...
It's already "really ugly"

So basically some lawyers are going to get rich now and they're going to buy any coins that I had in my account for pennies on the dollar.  This Mt. Gox hack sounds like the perfect cover story for a big player to buy a lot of coins without moving the price up by claiming Mt. Gox lost their coins.

https://www.mtgox.com/

They have a login to check your account balance.  I also made a withdrawal request before they went bankrupt and my wallet shows a balance of $0.0025, so there's a chance gox is significantly understating it's liabilities if they're not accounting for they USD in "withdrawal"

Despite the noise from  three law firms filing lawsuits in irrelevant jurisdictions, nobody seems to be representing Mt. Gox creditors in the bankruptcy court in Tokyo. Has anyone representing any creditor ever actually shown up at a Mt. Gox bankruptcy proceeding?

This allows Karpeles to continue controlling what's left of Mt. Gox. Not good.

Eighty percent of success is showing up.
— Woody Allen.*
*FYI: Quoting Woody Allen is not an endorsement for child abuse

• How is it possible that no one is showing up?

Maybe all the Yen withdrawals got processed for the locals, but some of them would still have BTC trapped.   

Does anyone know if MtGox by law has to liquidate all its bitcoins to repay its debt in fiat currency?

I would think because its a virtual item, worth fiat value, then yes. But they claim all their bitcoin were stolen also.

"The term "virtual mugging" was coined when some players of Lineage II used bots to defeat other player's characters and take their items. In Japan, the Kagawa prefectural police arrested a Chinese foreign exchange student on 16 August 2005 following the reports of virtual mugging and the online sale of the stolen items.[12]"

But they just announced that they "found" 200k of those lost coins. What i want to know is, will these coins be liquidated by court order?

Even though, the justice should be that MtGox returning those coins to its customer with btc balance.

I feel sorry for Mt.Gox victims. When I was trading with Mt. Gox, I had a total $40,000 in my account, but when I heard rumors of a major crash, I cashed out like a little bitch. Thank god I did. I'm so grateful.

...will these coins be liquidated by court order?
I had the same thought earlier today in a similar thread.
Let's hope to God the answer is 'No.'
>>> The court sees it as an asset, and assets get sold to pay debts (but the debt IS BTC/what you are forcing to be sold)

insanity laughs under pressure we're cracking
http://www.youtube.com/watch?v=kVmCYFB3Q-w

I lost about 0.51 BTC as mtgox.com told me today. What should I do?  ???

Is there any news on what really happened. They just seem to make up more shit every day.

Oh ya we got hack sorry and we lost all you coins. If it was so easy why has no hacker taken credit. Why has the vulnerability that was exploited not announced.  And why where none of the address released where the coins where stolen. 

What's happening is that the courts are calling them on their shit. The guy behind "mtgoxrecovery.com" filed a petition with the Tokyo bankruptcy court alleging fraud. A professor at ETH Zurich who showed that "transaction malleability" could not possibly account for losses of the size indicated, and that info was provided to the court. The Tokyo judge then extended the examination for another month, and the Tokyo Metropolitan Police are now involved.

Meanwhile, the bankruptcy judge in the US, where Mt. Gox also filed for  bankruptcy, says Karpeles has to show up in person or Mt. Gox doesn't get bankruptcy protection in the US. Which means the US suits go forward. One of which is against Karpeles personally.

Oh, and some ex-Mt. Gox employees talked to Reuters about what's going on. They're also talking to the Tokyo cops.

Things are moving forward, and not in the direction that Karpeles wanted.

That is good news for the Mt Gox users, like me. I hope he'll rot in jail for the rest of his life.

I hope he "finds" almost all the coins when he understands that is is best option.
Probably will not happen, but it would make a memorable day.