Back in 2013, Mt. Gox was the biggest bitcoin exchange on the internet, handling 70% of all transactions worldwide. But, in February of 2014, the site abruptly shut down, declared bankruptcy, and announced that 850k bitcoins had disappeared.
Now, thanks to a pending lawsuit, Mt. Gox’s CEO at the time, Mark Karpelès — a man who oversaw the company’s ugly collapse — stands to profit enormously.
In the aftermath of the site’s destruction, Mt. Gox recovered 200k of the missing bitcoins — and Japanese creditors demanded that Karpelès pay back the coins’ value in yen.
But since then, the value of bitcoin has ballooned from $400 to around $6k per coin. And, thanks to bankruptcy laws, Karpelès would only have to pay back the value of the coins at the time Mt. Gox went out of business ($480).
Back in 2014, 200k bitcoins were worth $96m; today, they’re worth $1.2B. And Karpelès, whose holding company, Tibanne, owns an 88% interest in Mt. Gox, would get to pocket ~$850m in profit.
When screwing up earns you a payday
The worst part is, the thousands who lost bitcoins through Mt. Gox will be paid out in the 2014 value of their coins as well.
Kolin Burges, a self-described Mt. Gox creditor, had 311 bitcoins at the time of the collapse (worth about $1.8m today), but will only get back ~$150k.
“When it’s all sorted out, Karpelès would pretty much get [the] vast majority,” Burgess told the WSJ. “So that seems incredibly unfair.”