SaveGox.com

[JorgeStolfi]

if NO one is contesting their balance, then the rest of your speculation does NOT matter.  If customers agree that they had X amount of BTC and Y amount of Fiat, then what else is there to question?

Perhaps this will make things more clear:

Suppose there were only two clients, J and M.

In reality, when MtGOX collapsed, J had 200'000 BTC balance in his account, M had zero BTC, and MtGOX had 200'000 BTC in their wallets.  Then if those 200'000 BTC were distributed proportional to the balances, J would get 200'000 BTC, M would get nothing.

But, according to the doctored database, J still had 200'000 BTC, M had 600'000 BTC.  J checks the balance and says it is correct.  Then MtGOX should have had 800'000 BTC in their wallets, but unfortunately 600'000 were stolen by invisible goblins so only 200'000 are left.  Now, if those remaining 200'000 BTC were distributed proportional to the balances in that database, J would receive 50'000, and M would receive 150'000.

If MtGOX were liquidated by the court instead, the 200'000 BTC would be split between J and M according to their deposits and withdrawals, which are much harder to doctor since they can be checked against bank records and the blockchain.  So perhaps J would get most of the 200'000 and M would get close to nothing.

Is that clear enough, or should I use a bigger font?

at least, one can say you (and your team) seem to have a pretty good imagination.

Thanks for the compliment.  It must have been my team-sized paranoid imagination that made me write that MtGOX was obviously insolvent (because it did everything that every insolvent company does), back when most seasoned bitcoin experts insisted that everything was fine.  Because, one could not assume then that all (or a majority of) the MtGOX management and their improvised auditors had malicious motives.

[sturle]

If MtGOX were liquidated by the court instead, the 200'000 BTC would be split between J and M according to their deposits and withdrawals, which are much harder to doctor since they can be checked against bank records and the blockchain.  So perhaps J would get most of the 200'000 and M would get close to nothing.

In other words you don't believe there will be a criminal investigation to discover where the BTC went.  The court doesn't care about whether a deposit is real or not.  Why not? 

BTC deposit records are the easiest to alter by recording a real tx unrelated to MtGox as a deposit to a MtGox account.  This would go unnoticed if the court take the deposit records as a fact without doing a proper audit/investigation following all BTC from deposit to withdrawal.

[JorgeStolfi]

In other words you don't believe there will be a criminal investigation to discover where the BTC went. 

Quite the opposite.  If MtGOX is liquidated by the court, there may be a criminal investigation, initiated by the liquidators or by clients.  If Sunlot takes over, who knows.

We do not know who will do the audit. We know that Sunlot will distribute and spend the remaining coins without waiting for a criminal investigation.  We know that they will have no obligation to release all the audit data so that the public can check it. We know that they will let Mr. Gay-Bouchery off the hook even before the audit.  We know that their PR person has not answered when asked whether they will "pardon" Mark too.

[ You think that ] The court doesn't care about whether a deposit is real or not.  Why not? 

The court certainly will care.  Sunlot will not care about deposits/withdrawals, it will use the account balances.

[sturle]

In other words you don't believe there will be a criminal investigation to discover where the BTC went. 

Quite the opposite.  If MtGOX is liquidated by the court, there may be a criminal investigation, initiated by the liquidators or by clients.  If Sunlot takes over, who knows.

You are still trolling.  You have still not given any sensible explanation why Sunlot would want to lose a lot of money.

We do not know who will do the audit.

Why is this important?  We don't know who will do the criminal investigation either.  Sunlot however have self interest in getting the audit done properly.  I still don't get why you think they will want to throw the money away.

We know that Sunlot will distribute and spend the remaining coins without waiting for a criminal investigation.

Yes, of course, and I don't understand why you think this is a problem.  You don't need to wait until the criminals are in prison until you release the remaining funds.  You just need to know the balances are correct and who owns them.

We know that they will have no obligation to release all the audit data so that the public can check it.

I certainly hope not.  That would be a PR disaster.

We know that they will let Mr. Gay-Bouchery off the hook even before the audit.  We know that their PR person has not answered when asked whether they will "pardon" Mark too.

They will, but the police probably won't.  Not if they are guilty of anything criminal.

[ You think that ] The court doesn't care about whether a deposit is real or not.  Why not? 

The court certainly will care.  Sunlot will not care about deposits/withdrawals, it will use the account balances.

After an audit, which means they will check exactly that.  Please explain again why you think Sunlot want to burn their own money.  Why take over MtGox to do that?  A lighter will do the job much easier.  You are 100% troll.

[eiskalt]

I think this fits in here quite well.

From reddit:

http://pastebin.ro/cs5Lr0gO

I haven’t even gotten to the original content of Debonneville’s complaint that Pierce worked so hard to have stricken from all public records. As this is the internet, the sealed text is still available despite Pierce’s best efforts.
 
(...)
 
The statement from Debonneville reveals that Brock Pierce and Marc Collins-Rector were unusually close. The complaint also alleged that Brock Pierce misappropriated stock and about $200,000 of IGE’s money in order to pay the settlements in the civil cases against Pierce and Collins-Rector. Additionally, Debonneville revealed that Pierce made business decisions with Yantis behind Debonneville’s back. Specifically, Pierce knowingly agreed to Yantis’s plan to sell duped and exploited virtual currency and items to MMORPG players, something that IGE had taken a very public and vocal stand against in the months before its merger with Yantis.

Mtgox - Sunlot - Audit - Refund ?
 

[edmundedgar]

In other words you don't believe there will be a criminal investigation to discover where the BTC went. 

Quite the opposite.  If MtGOX is liquidated by the court, there may be a criminal investigation, initiated by the liquidators or by clients.  If Sunlot takes over, who knows.

We do not know who will do the audit. We know that Sunlot will distribute and spend the remaining coins without waiting for a criminal investigation.

Maybe nit-picking here but I don't think we do know that. Jon Holmes didn't answer my question about it on the other thread, and I don't think Surle has inside knowledge. My impression is that they've already spent quite a lot of money on this deal and they'll tell the community whatever they need to tell them to make it happen. The creditors want a fast payout, so they're telling them they'll get a fast payout. Once the creditors have agreed to the deal they'll be more concerned with avoiding litigation, which may well mean sitting on the funds for a while.

[JayJuanGee]

I wouldn't say that you need a particularly fertile imagination to suppose that the balances have been out for years, say because Mark or some associates decided to borrow, sell, short or whatever at the wrong time.

Then it would help to simply inflate the balances of those in on the scam. These are Goxcoins we are talking about here, remember; I don't see why inflating some balances would necessarily require deflating others.

One thing is for sure. The people wanting to take over have BTC in their eyes. Being one of those with "funds" in Gox I personally would like to see some kind of rehabilitation. But a 16.5% stake stinks. The sum of balance holders should have at least parity with the new owners - 50%, nothing less.

An investment group is at liberty to propose whatever terms that it wishes in order to attempt to persuade the various stakeholders and the court to go with that rehabilitation plan as the better of the evils. 

It would be hard pressed to find any investment group that would be willing to allocate that much equity (50%) to past customers.  Surely, I am NOT opposed to any such arrangement, and I would be very interested in hearing about any comprehensive and realistic proposal that had such a high level (50%) equity "sharing" arrangement.

[freedombit]

please note I think sunlot are buying mtgox at a bargain price
if mtgox had not "stuffed up" and lost all our money it could be worth as much as $700 mil ( about 700,000 customers at $100 per customer . )

This is quite incorrect. First, for the purposes of a recovery plan, each customer is worth a NEGATIVE amount equal to its account balance (that is what MtGOX owes him), plus a positive amount equal to the fees that he is expected to generate over, say 2 years.

IIRC, the sum of the accounts was found to be about 800'000 bitcoins, worth about 400'000'000 USD at current prices, plus a large amount of dollars.  That is the NEGATIVE part.

For the positive part, only active customers count; inactive customers, that do not trade, generate no income. IIRC, according to analysis of the database leak by @rpietila,  MtGOX had around 70'000 active customers, and that with a very generous definition of "active".  To pay 100 US$ of trading fees, a customer would have to trade a lot.  If the NewMtGOX decided to charge significant maintenance fees, most of those 70'000 customers would probably close their accounts.  So this positive term -- the value of MtGOX's customer base -- is very small, maybe only 1/100 of the negative term above.

The significant positive terms in the evaluation of MtGOX are the bitcoins and dollars that MtGOX actually had (I lost count, was it 220'000 BTC?).  Adding everything gives a huge NEGATIVE value for the company.  Who would pay even a satoshi for the "privilege" of having to pay hundreds of millions of dollars of debts?

The Sunlot proposal makes sense for them only because they propose to assume only the positive terms above, spend some of that money for certain expenses, and then perhaps distribute the crumbs to customers, thus declaring the debts extinct.

A company's value is relative to each individual's view. It is generally accepted that the current value of a public company is the latest trade value times the number of shares outstanding. If all of the public companies traded on Wall Street were valued as you propose above, the market would crash. Including banks. Most are traded on FUTURE earnings.


MtGox is worth much more than one bitcoin. When the dust settles, this will be the case whether a Savior enters a bid before liquidation, or we need to find the sum of all liquidation purchases.

[JayJuanGee]

if NO one is contesting their balance, then the rest of your speculation does NOT matter.  If customers agree that they had X amount of BTC and Y amount of Fiat, then what else is there to question?

Perhaps this will make things more clear:

Suppose there were only two clients, J and M.

In reality, when MtGOX collapsed, J had 200'000 BTC balance in his account, M had zero BTC, and MtGOX had 200'000 BTC in their wallets.  Then if those 200'000 BTC were distributed proportional to the balances, J would get 200'000 BTC, M would get nothing.

But, according to the doctored database, J still had 200'000 BTC, M had 600'000 BTC.  J checks the balance and says it is correct.  Then MtGOX should have had 800'000 BTC in their wallets, but unfortunately 600'000 were stolen by invisible goblins so only 200'000 are left.  Now, if those remaining 200'000 BTC were distributed proportional to the balances in that database, J would receive 50'000, and M would receive 150'000.

If MtGOX were liquidated by the court instead, the 200'000 BTC would be split between J and M according to their deposits and withdrawals, which are much harder to doctor since they can be checked against bank records and the blockchain.  So perhaps J would get most of the 200'000 and M would get close to nothing.

Is that clear enough, or should I use a bigger font?

I will grant that you made a lot of good points here, and you articulated your points fairly well.... in picking out an area in which I may have overstated the case that customers' verifications of their deposits is a very important starting point.  I will grant you that customer verifications is NOT the ending point, and partly based on the reasons that you stated.... I agree that if fraud could undermine the balances of the true stakeholders, then it would be best to identify those types of fraud, if they exist.

at least, one can say you (and your team) seem to have a pretty good imagination.

Thanks for the compliment.  It must have been my team-sized paranoid imagination that made me write that MtGOX was obviously insolvent (because it did everything that every insolvent company does), back when most seasoned bitcoin experts insisted that everything was fine.  Because, one could not assume then that all (or a majority of) the MtGOX management and their improvised auditors had malicious motives.

Now you may be gloating a bit too much. 

Accordingly, I am sure that you are NOT the only person who identified that there were potential problems with GOX and the GOX math was NOT adding up.

[JorgeStolfi]

[ ... ]

In a chess match, you cannot assume that the other player will do what you would like him to do.  You must assume that, at every move, he will do whatever he can that is best for him.  If he can take your queen, he will take it, no matter how much that upsets you. If he can checkmate, he will, even if that would be a PR disaster among you and your friends.

Same here.  Doing a thorough and honest audit, distributing the 220'000 coins fairly to clients, starting a criminal investigation to find the other 600'000 coins and distributing them to clients -- that is what you would like Sunlot to do; but that is completely irrelevant when trying to predict  what they will do.  You must ask what they can do -- ethical or not -- that will result in most money for them.  This includes telling lies, falsifying and omitting documents, making secret deals with anybody, etc.. 

(And then there is the issue of the two different criteria for distributing the coins, by final account balance or by input/output balance.  Each choice is good for some clients but bad for others.  Sunlot obviously has chosen which clients it likes the most.)

To set things clear, I could not care less about whether MtGOX clients get their coins back or not.  What I want is that all the criminals involved in the MtGOX scam and anyone who tries to help them get taken out of circulation and deprived of their money.  Anyone who doesn't like being robbed should want that too.

[JayJuanGee]

[ ... ]

In a chess match, you cannot assume that the other player will do what you would like him to do.  You must assume that, at every move, he will do whatever he can that is best for him.  If he can take your queen, he will take it, no matter how much that upsets you. If he can checkmate, he will, even if that would be a PR disaster among you and your friends.

Same here.  Doing a thorough and honest audit, distributing the 220'000 coins fairly to clients, starting a criminal investigation to find the other 600'000 coins and distributing them to clients -- that is what you would like Sunlot to do; but that is completely irrelevant when trying to predict  what they will do.  You must ask what they can do -- ethical or not -- that will result in most money for them.  This includes telling lies, falsifying and omitting documents, making secret deals with anybody, etc.. 

(And then there is the issue of the two different criteria for distributing the coins, by final account balance or by input/output balance.  Each choice is good for some clients but bad for others.  Sunlot obviously has chosen which clients it likes the most.)

To set things clear, I could not care less about whether MtGOX clients get their coins back or not.  What I want is that all the criminals involved in the MtGOX scam and anyone who tries to help them get taken out of circulation and deprived of their money.  Anyone who doesn't like being robbed should want that too.

I agree with you that we may want to consider this matter in term of what the new team can get away with, and that the new team will attempt to maximize their profits and get away with as much as they can get away with.   

Regarding convicting criminals, there may or may NOT be proof of criminal activity, and accordingly, a better result may be to attempt to make whole as many customers as possible.  We do NOT have enough information to make broad general statements to pursue one avenue at the exclusion of another, and we do NOT know the extent to which multiple avenues may be pursued simultaneously.

[JorgeStolfi]

Regarding convicting criminals, there may or may NOT be proof of criminal activity, and accordingly, a better result may be to attempt to make whole as many customers as possible.  We do NOT have enough information to make broad general statements to pursue one avenue at the exclusion of another, and we do NOT know the extent to which multiple avenues may be pursued simultaneously.

According to Mark, 600'000 BTC were stolen from his company, that is why he cannot pay to clients what they were due according to his terms of service. Whether he lied or told the truth, a crime obviously has been committed. 

[JonHolmquist]

1: We have new software that is all ready to go. The software isn't really the hard part, it's more about operations and making sure it runs smoothly.

Does your software have the same features which made people continue using MtGox despite all the problems?  Like APIs over multiple protocols, better than all the other exchanges APIs combined, and and multi-currency trading within the same orderbook? 

Not sure on the specifics yet. It's fast and secure though.

[JonHolmquist]

Mr. Gay-Bouchery and Mr. McCaleb [ ... ]  If this deal is approved by the court, will they be freed of any responsibility for their roles in MtGOX's collapse?

Q: Why are you working with Jed McCaleb and Gonzague Gay-Bouchery?

This process takes pragmatism rather than idealism, and without a deal, the assets will be liquidated and customers will have no recourse. We all want an outlet for our anger and frustration, and we all want retribution, but the immediate goal at hand is to get a deal done to avoid liquidation, because once that happens the company is gone and there will be no standing left to go after Mark or investigate the lost coins.

Q: What do Jed and GGB get out of the deal?

In return for their full cooperation in recovery and prosecution of those responsible, we have agreed to release both defendants from the claims in the lawsuit.

I see.  Are you going to make the same offer to Mr. Karpelès, then?  Or is he the expert that you intend to hire to investigate the matter?

Now seriously: it is not a matter of "anger", but deterring further crimes from happening. 

It would be interesting to know, for starters, when did Mr. Gay-Bouchery became aware of MtGOX's insolvency, and what did he do about it then.

My own personal opinion is that Mark is at fault.

Obviously someone needs to be held responsible for this event. Keep in mind this deal was made with creditors. I doubt any creditors would support a similar deal with Mark. I know I wouldn't.

You'd have to ask GGB, I haven't talked with him about the events leading up to collapse.

[JonHolmquist]

Was there any information released regarding how Sunlot would convert the BTC balances into equity stakes?
For obvious reasons, I had only BTC left inside Gox. But for the same reason, those don't worth much if you count their ~100 $/BTC closing price.

We're using a $500 per coin basis.

Cheers,

When the plan sails on and recovery is underway the price will easily shoot up back to $1000.
Very bad idea IMO

I don't get the idea of the equity stakes! Please explain!

Step 1: Audit. Figure out who is owed what and if there are any fake (or invalid) accounts in the database.
Step 2: Everyone gets equity on a pro rata basis. If you owned 1% of the money that went missing, you'd get 1% of the 16.5% going to creditors.
Step 3: Everyone is free to withdraw their funds after the audit is done.

[JonHolmquist]

Hi Jon. Not a creditor so maybe it's none of my business, but I'm wondering: The FAQ says,

Q: Will people be free to withdraw their assets right away?

Yes. Any recovered assets will be deposited into customer accounts immediately with no withdrawal restrictions.

As you know,
1) People responsible for stealing bitcoins and/or hacking the database, whether insiders or external people, may have positive balances in the current system.
2) There is an ongoing police investigation into who is responsible for stealing bitcoins. This may turn up information that won't be available to Sunlot, since the police have a lot of powers that Sunlot doesn't.
3) Regardless of what happens in the bankruptcy, this investigation may not be completed very quickly.

Does Sunlot really intend to pay out before the police investigation is completed, even at the risk of giving the legitimate creditors' money to the people who have already robbed them?

Or would Sunlot in fact wait until the police investigation was complete, in which case things might not happen quite as quickly as the FAQ makes it sound?

After an audit or once it appears that it is safe to allow withdrawals. We are aiming to get people paid out as quickly as possible while still staying safe.

[JonHolmquist]

I have one suggestion to Sunlot: Pay out all BTC balances of 1 BTC or less than BTC in full at once.

I second this motion. This would lower the cost and effort of the subsequent operations related to creditors' equity.
Moreover, such action might help to restore some confidence in Bitcoin amongst many (and possibly: not well-off) individuals who tried to buy a fraction of bitcoin out of curiosity and got Goxxed instead.

I also think this is a good idea

50 % less creditors to deal with may make recovery quicker.


please note I think sunlot are buying mtgox at a bargain price
if mtgox had not "stuffed up" and lost all our money it could be worth as much as $700 mil ( about 700,000 customers at $100 per customer . )

at present I believe sunlot is the best option -see  sunlot FAQ

I would also like to see sunlot put some money in --- like $20 mil in a escrow account

-- okcoin and other plans are still un known - so cannot compare ----

We're planning on throwing some skin into the game to the tune of a couple million. Expect an announcement sometime this month.

[JonHolmquist]

Another question for Jon. (I guess he'll answer my previous one when he wakes up.)

IIUC Mark Karpeles personally is a large creditor of Mt Gox the company, with a lot of bitcoins in his own exchange. A liquidation would put the claims of directors of the company last, but in rehabilitation you're supposed to pay everyone what they're owed, unless they specifically agree to forbearance.

Does this mean that Sunlot would be paying a large proportion of the remaining coins to Mark personally? If not, what would be the legal basis for not paying him?

I believe John has stated that Mark wouldn't be getting paid out. I'm not a lawyer so I don't know what the legal basis is.

[JonHolmquist]

Two more questions:
A significant amount of BTC balances belong to very old accounts which haven't been touched for years.  93,442 BTC, 454,849 USD, 23,799 EUR, etc, in accounts not touched since 2012 or earlier.  MtGox had a clause in their ToS which allowed them to close accounts which hadn't been logged in to in more than 6 months.  Will those account owners be counted as creditors, or will the clause take effect and the account considered closed?  This will allow a significant higher payback to users.

Will there be a claims process where people have to actively make their claims?  If so, what happens to assets not claimed in this process?  Would payouts to the remaining creditors increase if some creditors fail to make their claim?

Customers will have a couple months to withdraw their funds before their coins are released back to the pool of creditors.

[JonHolmquist]

An audit will trivially reveal if the trade data matches the balances caused by deposits and withdrawals.

An audit done by whom?  By Mark? Gonzague? Roger Ver?

(The PR guy has not said what they intend to do about Mark, has he?)

Top 4 auditing firm. http://en.wikipedia.org/wiki/Big_Four_(audit_firms) Take your pick.

Mark will be pursued for any wrongdoing that can be proven in a court of law.