
Bankrupt Mt. Gox may soon be able to pay its creditors - Nitishshah700
https://qz.com/1003609/bitcoins-soaring-price-means-mt-gox-could-pay-its-debts-and-drw-wants-to-help/
======
Abundnce10
Doesn't it seem like they should sell the amount of Bitcoins needed to pay off
any debt in fiat and then distribute the remaining coins to each user
proportionally based on the amount they had on the exchange? Then you're not
flooding the marking with 200k Bitcoins. Also, MtGox users are losing
substantial value in this deal since the value of a Bitcoin is pegged at $483
and they're now worth well over $2,500. MtGox shouldn't become solvent once
they pay all Bitcoins owed at a $483 price, they should return the remaining
value to each user proportionally.

Doesn't this seem like the most logical/fair approach?

~~~
judofyr
Converting all the claims to a single currency is the only logical approach.
Keeping the claims separated leads to a bunch of difficult questions:

\- Should the BTC creditors only get money from the remaining BTC pool?

\- Assets (servers, offices etc) will be sold for Yen, should this money only
be used to pay the Yen creditors?

\- Expenses are being used from the Yen pool at the moment. Does this mean Yen
creditors would get less money?

And let's not kid ourself: No one thinks about the value of Bitcoin in terms
of "amount of BTC". Everyone converts it to dollars using the current exchange
rate. It's not like there's a society where "50 BTC = big house", and now that
you'll only get back 10 BTC (or whatever the ratio is) you can't buy that
house anymore.

You could argue about at what rate/date you should convert the BTC claims to
Yen, but the only reason people complain now is that the price happens to be
higher. I personally think it would be more fair to lock the price to the
exchange rate when MtGox stopped trading.

(Disclaimer: I have a 16k USD claim in MtGox)

~~~
brianpgordon
> 50 BTC = big house

You're killing me. I'm pretty sure that back when BTC was worth in the single
digits of USD I had that many BTC in my account. I must have sold them for a
pittance. It's so painful to just read the above words.

A lot of people must feel this way because ICOs seem to be attracting a
strangely large amount of capital. I guess psychologically nobody wants to
miss the next big thing.

~~~
fjdlwlv
It's like baseball cards and comic books. If everyone held on their btc, they
wouldn't be worth as much as they are. You may as well grumble that your lotto
ticket didn't end up worth a million dollars

------
delegate
This appreciation in price has made a lot of shady people fabulously rich.

While MtGox still has 200k BTC, the thief(s) went away with 650k BTC - now
worth almost $2B - richer then most hot shot unicorn startup founders
worshiped these days.

If they ever get caught, they should be awarded some kind of prize - biggest
and cleanest heist in the history of humanity. I mean, this is a proverbial
"for $2 billion, would you create an anonymous transaction in the block
chain?". (!?!)

Then there are the drug dealers, the drug market admins who stole coins and
all the other hacks, extortions, pump-and-dumps, etc.

These shady people are now rich and are probably thinking about investing
their money - into companies, politics, etc. They are joining all the other
nouveaux riche from all over the world who made their money from corruption,
arms trades and everything in between.

Interesting times ahead indeed.

~~~
rubber_duck
This is assuming everyone who acquired BTC held on to them to this point, I
very much doubt that's the true for any scenario you mentioned except the
MtGox.

Also 650k BTC - could you ever cash that out at anywhere close to current
price :|

~~~
adventured
> Also 650k BTC - could you ever cash that out at anywhere close to current
> price

Instead you might cash it out at several times greater than the present price
in a few years. It would be easy to drip 10k BTC into the market and liquidate
several hundred thousand coins over the next year.

~~~
rubber_duck
>drip 10k BTC into the market and liquidate several hundred thousand coins
over the next year.

Really ? You could put 10k BTC on sell side per day and the market wouldn't
collapse in a week or two ? From what I can see on this exchange :
[https://www.bitstamp.net/market/tradeview/](https://www.bitstamp.net/market/tradeview/)

You could push it below 2k$ with less than 10k BTC, I'm assuming there are
bigger exchanges - I'm not following BTC close - is there an aggregate of
exchange bids on big exchanges ?

~~~
captainmuon
Could you crash the market a bit, buy a lot of BTC, and then wait for it to
recover again? I wonder if that would be a zero-sum game or if you could gain
from such a cycle. E.g. I'm not sure if the price adjustment is instantaneous,
or follows with a lag (in which case you could certainly make money).

Also, it might be very hard to move large amounts anonymously onto an
exchange, and if you did that (even assuming they couldn't trace the BTC to
your nefarious origin, or they are clean), I'm sure you are violating some
market manipulation law somewhere.

~~~
rubber_duck
>and then wait for it to recover again

If you demonstrated you could do this once - why would it ever recover ? Who
would invest in it again ? Especially with so many altcoins.

------
ggambetta
Bitcoins have appreciated 10x since MtGox crashed and took mine. Getting back
the dollar value the bitcoins had back then would still piss me off.

~~~
emodendroket
More than getting nothing? The only reason this is even a possibility is the
appreciation.

~~~
ggambetta
I prefer getting 1/10th than getting nothing, but the only fair outcome would
be getting exactly what I lost.

 _> The only reason this is even a possibility is the appreciation._

Sure, but the only reason we're even having this discussion is that MtGox
fucked up. That isn't my fault.

~~~
dragonwriter
> I prefer getting 1/10th than getting nothing, but the only fair outcome
> would be getting exactly what I lost.

Bankruptcy means that the outcome of “all creditors getting what they were
owed” is off the table. What is at issue is their fair disposition of what is
left which is known to be inadequate to the ideal.

> Sure, but the only reason we're even having this discussion is that MtGox
> fucked up. That isn't my fault.

The only reason it would matter to you is that you entrusted something to
MtGox. That, arguably, _is_ your responsibility.

~~~
altstar
Are you blaming the victim?

~~~
airza
I mean, if you're buying and selling bitcoin, especially if you're doing it in
the MTGOX era, you made an explicit choice to choose a currency that did not
have governmental insurance for depositors, or other regulatory controls.

~~~
emodendroket
It was really something to watch people learn in real time why various
regulations exist.

------
ChuckMcM
Wow, I'm surprised they wouldn't be selling coin at a slow rate to convert
into cash at this point. Basically sell coin until the price drops below what
is needed to clear debts, then wait, when it comes up some more sell some
more, then wait. Repeat.

~~~
zulln
That would assume it always gets back.

~~~
ChuckMcM
Not exactly, as the trustee it would make sense to consider all possible ways
of making the creditors whole. And one would put down in their notebook "We
have x BTC, if it was selling at $Y/btc each BTC we sold would get us z%
closer to returning all the cash obligations." And then each time it reached
$y you start selling, if it never reaches you are no different than you were
to begin with, if it reaches it only for a short time, perhaps you can pay
back some cash.

Now if you're creditors will take BTC and sign off on any future claims, then
you are golden. You trade them BTC at market value against all future claims.

------
Simulacra
I think the obvious thing to do is sell the bitcoins, pay off the debt, make
account holders whole again, and then figure out what to do. This seems like a
no-brainer.

~~~
advisedwang
Except that bitcoin doesn't have $400 million of liquidity. If you sold them
you'd get way less than the current price suggests. I doubt many creditors
would be willing to accept bitcoin directly.

~~~
Animats
Bitcoin supposedly has a $45 billion market cap, and you can't liquidate 1% of
that without crashing the price? If that's the case, the market cap is totally
fake.

What would happen to Bitcoin if the Mt. Gox trustee sold $4 million a day of
Bitcoins for 100 days?

~~~
mbgaxyz
Not much would happen, trading over the past 24 hrs was almost $2 billion. See
here: [http://coinmarketcap.com/](http://coinmarketcap.com/)

~~~
h1d
What are you talking about? You know trades go back and forth... Those are not
some new coins that didn't already exist on the exchanges that just gets
withdrawn from the exchanges on one go... Exchanges don't even have such
amount of fiat to handle.

------
stereo
How come the debt is in Yen and not in bitcoin?

~~~
patio11
Because Mt. Gox is a corporation organized under the laws of Japan.
Corporations in Japan can own many things of value, such as hotels, laser
printers, intellectual property rights, Alpha Black lotuses, swiss francs, and
promises to be paid in the future... but all of these things exist, on their
books, with a yen value next to them.

In the event of a bankruptcy or civil rehabilitation (民事再生, which is what Gox
is going through IIRC), creditors generally get paid out in yen, not in cement
mix, even if the company only happens to own cement mix.

~~~
literallycancer
Yen value at the time of purchase? Does it get updated at any time? Surely 20
years old construction machines aren't worth as much now?

~~~
vmarsy
It's a well known subject in Accounting : Depreciation [1]

[1]
[https://en.wikipedia.org/wiki/Depreciation](https://en.wikipedia.org/wiki/Depreciation)

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ryanmarsh
Selling that many coins could drop the price considerably, no?

------
ryanmarsh
Glass–Steagal

------
bitJericho
If anyone's looking for a new exchange, I'd suggest my own exchange
[http://bitcoinsexchange.itmustbetrue.com](http://bitcoinsexchange.itmustbetrue.com)

~~~
anothercomment
You can pay for sex changes with bitcoin now? Woot!

~~~
bitJericho
Call 1-600-DOCTORB, the B is for bargain.

