The story of the infamous cryptocurrency exchange Mt. Gox seems to be taking a twist that could bring a relatively happy resolution to one of the most dramatic episodes in the short history of digital money. As the gates are now open for the Japan-based exchange’s creditors to file rehabilitation claims, chances are that most of the roughly 24,000 bereft patrons will eventually get their funds back and even see some returns on their involuntary, four-year long investment.
The development came along thanks to a group of Mt. Gox creditors successfully mounting an effort to pull the exchange out of bankruptcy proceedings and thrust it into an alternative legal process, known as civil rehabilitation. While some of the defrauded customers still keep pressing for criminal charges against the exchange’s former CEO Mark Karpeles personally, the bankruptcy estate funds are now managed by an independent trustee — Japanese lawyer Nobuaki Kobayashi — who oversees the civil reimbursement process.
The logic of the move is that the civil rehabilitation mode, according to Japanese law, would allow for distributing the exchange’s outstanding assets (worth more than $1.3 billion as of press time) among those who had lost their funds amid Mt. Gox’s collapse in 2014. Had it remained in the bankruptcy process, upon its conclusion, the bulk of the money would have accrued to the exchange’s shareholders, most notably the firm’s ex-CEO Mark Karpeles, who, at the time of the collapse, owned 88 percent of Mt. Gox.
Not only this would be a disgrace for the creditors — who had cumulatively lost 650,000 BTC due to Mt. Gox’s going bust — but also something that Karpeles himself would prefer to avoid.
In his 2017 interview to Reuters, the deposed Bitcoin King admitted that he would rather do his best to help creditors move the case from bankruptcy to rehabilitation than deal with a tidal wave of civil lawsuits and death threats that would inevitably descend upon him should he end up with a billion dollars he never earned.
Yet, before all the controversy, lawsuits and universal ignominy, there was a fascinating story of Mt. Gox’s success and downfall that, at various points, touched upon many titans of the cryptocurrency pantheon, and which like no other illustrates the spirit of the industry’s early years.
Newcomers sometimes read Mt. Gox as “Mount Gox,” which is not quite correct — there is no topographical connotation to “Mt.” The domain name mtgox.com is short for “Magic: The Gathering Online eXchange," and reflects the initial idea with which the service’s founder, Jed McCaleb, had registered the website. McCaleb — right, the one who would later go on to create the Ripple protocol — conceived of a platform where the fans of then-popular fantasy game “Magic: The Gathering” could trade the game’s cards like stocks. He quickly grew bored with the idea and moved on to other projects — it wasn’t until July 2010 that McCaleb, now fascinated with the newly found concept of cryptocurrency, reused the domain to create one of the first Bitcoin exchanges.
Always in pursuit of something bigger and newer, McCaleb lasted for less than a year at the helm of Mt. Gox before selling it to Karpeles, a French developer who was looking for a place to start his big journey in the crypto world.
According to an email that would later surface in court, Karpeles learned shortly after the purchase that the exchange has already been hacked at least once, leaving a hole of 80,000 BTC on the balance sheet. Worth around $60,000 at that time, the loss didn’t seem dreadful to the new majority stakeholder and CEO — yet, over time, as Bitcoin prices caught wind, the void became ever harder to fill.
Source: https://cointelegraph.com/news/the-mt-gox-redemption-heading-toward-a-happy-ending
