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The Guy Who Oversaw Mt. Gox's Catastrophic Meltdown Could Still Get Very Rich

The Guy Who Oversaw Mt. Gox's Catastrophic Meltdown Could Still Get Very Rich
From Gizmodo - November 11, 2017

Mark Karpels, the former chief of spectacularly failed Japanese Bitcoin exchange Mt. Gox, is on trial in Japan on charges he embezzled millions from the company before its collapse. He, Mt. Gox, and his current company Tibanne (which owns 88 percent of Mt. Gox) are all bankrupt.

Yet Karpels could still walk away with hundreds of millions in profits from his various business schemes, reported the Wall Street Journal this week, because over 200,000 bitcoins recovered after Mt. Gox declared bankruptcy in 2014 have risen dramatically in value. As Ars Technica notes, when Mt. Gox claimed to have lost 750,000 bitcoins belonging to customers shortly before its collapse, those were worth around $412.5 million. Now the 200,000-plus bitcoins alone are worth $1.3-1.5 billion at the current going rate of $6,500 per coin, but Karpels is only obligated to reimburse customers at the 2014 rate.

Per the WSJs calculations,After accounting for smaller amounts of nonbitcoin assets and liabilities, Mt. Gox has a surplus on paper of 111 billion, or $977 million, that could go to its shareholders. Karpels could in theory walk away with hundreds of millions of that due to specifics of Japanese law that prevent customers from simply having the bitcoins returned.

However, all three bankruptcy proceedings will require determining that Mt. Gox, Tibanne and Karpels do not have extensive undisclosed liabilities. Karpels told the paper in an email that he expects to walk away with little benefit, as selling such a large quantity of coins would be difficult and bankruptcy assets often sell well below market rate.

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