The Hustle

A disgraced bitcoin czar is poised to make ~$850m

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...


November 13, 2017

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.

How?

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.”

Join 1.5m+ professionals getting The Hustle daily news brief

Business and tech news in 5 minutes or less

100% free, no ads or spam, unsubscribe anytime

Exit mobile version