
Mark Karpeles Will End Up Taking $859M from Mt. Gox Bankruptcy - kajb
https://www.cryptocoinsnews.com/mark-karpeles-will-end-taking-859-million-mt-gox-bankruptcy/
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tzakrajs
The longer I look at it, the more Bitcoin looks like a scheme to enrich
criminals and enable rogue states to do business. Does it help the world
economy that a large handful of people who go into bitcoin early now are
controlling millions of dollars that they would have otherwise never, ever
seen?

And what of Bitcoins benefits? Anonymous? Not for normal people on
coinbase/etc. Fast? Nope. Convenient for shopping? Not unless you are on
overstock.com or buying magic mushrooms on silk road. Politically viable?
China isn't having it.

Can someone tell me what Bitcoin is good for again?

~~~
hellbanner
I wish I could find the link, and Googling is cluttered:

[0] There was an IMF (or World bank?) paper from the 70s, a .txt was online
somewhere

It described "a possible future of digital currency" .. and described Bitcoin
with a lot of accuracy.

[1] An analysis theorizing Bitcoin was first mined on networked computers
running the same hardware config - something about how the randomness repeated
and the rate of new hashes being found & the distribution of those hashes
among the early addresses.

Again, sorry I don't have a link, I naively assumed I could just search for
this stuff in the future without saving a copy.. it was a Wordpress style blog
though.

~~~
tzakrajs
This is the most dangerous thing about the IMF stating that blockchain was the
future of finance... they forgot that everyone immediately assumes Bitcoin
when you say blockchain. They were specifically not referencing Bitcoin by
name for a reason.

"She pointed to distributed ledger technology like blockchain that can help
make the banking system more inclusive."
[https://www.cnbc.com/2017/10/13/bitcoin-get-serious-about-
di...](https://www.cnbc.com/2017/10/13/bitcoin-get-serious-about-digital-
currency-imf-christine-lagarde-says.html)

She is basically saying that banks need to come together and decide on a
decentralized ledger system.

~~~
bdcravens
I don't think the 2 of you are talking about the same thing. Parent was
talking about a more generalized paper from the 70s, not a statement from a
current IMF head.

~~~
hellbanner
Yes, the paper I was referring to didn't say "blockchain". It was a theory on
how digital money could work, with features like transacting across national
boundaries

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nathanaldensr
This seems to be important, from the comments:

>Paul Wasensteiner • an hour ago

>Joseph you need to correct this bullshit instantly. Mtgox creditors DID NOT
"requested Karpeles and Mt. Gox to process refunds in Japanese yen rather than
bitcoin". This is totally and utterly false! We submitted our claims for what
we had on our accounts at the time that Mtgox closed in whatever currency we
had (i.e. if our account had bitcoin in it, we submitted a claim for bitcoin),
and most of us also requested to be paid out in bitcoin.

>Update this article immediately!

~~~
verroq
They’ll be paid in btc however they will not get the same amount. They will
get btc equivalent to their btc’s worth in 2013.

The size of their claim is the same.

Btc or usd will only affect the payment method.

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tinco
We didn't request for our claims to be converted to Yen. The Japanese court
representative assigned to the bankruptcy determined the Bitcoin had to be
assigned a yen value. He proposed a value that seemed reasonable at the time
so most creditors agreed.

Almost all creditors I know, including myself, would prefer to claim Bitcoin
instead of Yen but it was simply not allowed by the court. Back then it seemed
not really important as the valuation was reasonable and we didn't suspect the
process would take so long.

When it became clear that the process would take so long that the Bitcoin
value would exceed the claims, people organized a legal defense to have the
claims reevaluated, but it would be a very exceptional situation and it is
unclear to me what the repercussions of such a precedent would be in Japanese
law.

I hope that at least Mark would be convicted and the Japanese state would take
from him whatever profits remain from the bankruptcy.

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gct
That's cool, I didn't need the $50,000 in bitcoin he fucked me out of anyways.

~~~
oaijdsfoaijsf
TBF when he fucked you out of it it was only worth $700 or so (based on
another commenter's claim that it increased 70-fold in the intervening time).
Most similarly situated people could have re-upped that amount of bitcoin back
then, but if you chose not to, it's not like Karpeles forced that choice on
you. IMO, being mad about the $50k _current_ value of bitcoin that you lost is
overstating the harm he did you significantly.

~~~
jonnathanson
Hypothetical problem... Let's imagine a universe in which milk is a rare
commodity, and milkshakes are worth their weight in gold. In this world, right
now in 2017, 1 milkshake trades for $100 USD. You have a milkshake, and I have
a milkshake. So we each hold the equivalent of $100. I drink your milkshake,
effectively stealing $100 from you.

Fast forward to the year 2020. Milkshakes are now worth $1,000,000 USD. Have I
deprived you of $100, or have I deprived you of $1,000,000? (Note that we
can't seem to use retroactive NPV analysis in 2017, since in 2017 we had no
way of accurately predicting how milkshakes would be priced in 2020.)

On the one hand, I appear to have imposed a severe opportunity cost on you. On
the other hand, I haven't taken the world's only milkshake from you. So what
I've literally stolen from you in 2017 is the present value of the milkshake,
$100.

IANAL, and I will confess that I have no idea how a court of law would
evaluate this case. But in economic terms, it certainly feels as though I've
deprived you of more than $100. So what have I actually taken from you?

[EDIT: This post was meant to pose a question. It was not meant as a frank
disagreement with the parent post per se. I've cleaned up the wording a bit to
try to make it clearer.]

~~~
pishpash
Sure, but the appropriate amount, in my mind would have been $100 plus
prevailing interest, not some in-kind distribution. Suppose there is only one
milkshake in the world and it got destroyed, how would you ever repay the
claim except by converting to currency value?

~~~
tryingagainbro
_Sure, but the appropriate amount, in my mind would have been $100 plus
prevailing interest_

Bankruptcy laws determine that. Maybe x% a year? Creditors took them to court
and at that moment the court takes over. You should have bought more bitcoins
at $400 if you believed in it.

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unknown_apostle
Here's what I don't understand: I specifically requested to be repaid in BTC
at the time, you could state this on the claims form. I even opened an account
on Kraken for this? So why would I not get the full amount in bitcoin?

~~~
Tuna-Fish
Because the law does not work that way. Japan values property in yen, and the
law states that you must be paid back the value of what you lost at the time
you lost it.

This is true in most countries -- in the United States, if the state for any
reason seizes your coins without legal reason, and has time to auction them
off before you can prove they had no legal reason to take them, you will be
paid back in dollar for the value of the coins on the day they were taken. The
state does not owe you the potential increase in value between that day and
today.

Where it gets interesting is what would happen if the reverse was true. Let's
say your coin gets taken without legal reason in an illegal search today, with
the price at $100. Two weeks from now, they get auctioned off after the price
collapsed to $80. Four months from now, when your lawyer proves to the court
that your coins were legally acquired and there was no basis to the seizure,
the price is at $1. What does the government owe you?

~~~
unknown_apostle
Mtgox owes me bitcoins. My claim on mtgox was fully validated. They have
recovered like 80% of those bitcoins. I explicitly requested in the Japanese
legal paperwork to be paid back in bitcoins.

So, now, please give me back my fucking bitcoins.

Instead, an incompetent piece of shit, the guy who caused this mess will now
supposedly walk away with the majority of those bitcoins.

It's not just and it won't happen. We'll sue him to the end of the universe
and back until he pays up. There are other forms of litigation besides
Japanese bankruptcy law. And there is funding too. The entire sum I will
supposedly get back now, plus a huge bitcoin-denominated bonus will be fully
committed to this purpose.

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tlrobinson
This begs the question: if I go bankrupt, can I take whatever remaining funds
I have to Vegas and gamble it until I come out ahead or lose it all?

The US government was required to sell the Bitcoin they seized from Silk Road.
Should individuals/companies in bankruptcy?

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dmichulke
I see often the question here: What would have happened if BTC went down to
2$?

The thing is:

If it goes down, he pays nothing.

If it goes up, he pays up to ~400$ per BTC. That's a hell of a call option in
my eyes.

In order to avoid that, the responsible should have sold everything in the
beginning or he should have set the claims to be in BTC upfront.

But you cannot keep speculating with other people's money for 5 years and keep
the profits in case A or pay nothing in case B.

Now since case A happened, these profits are a consequence on the risk taken
with other people's money, so it's also the profits of other people.

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thisisit
> However, after a strange turn of events, it turned out that creditors of Mt.
> Gox, or former bitcoin traders on the Mt. Gox exchange, requested an
> equivalent amount of bitcoin to be paid out in Japanese yen at the beginning
> of Mt. Gox liquidation proceedings. In simpler terms, creditors requested
> Karpeles and Mt. Gox to process refunds in Japanese yen rather than bitcoin,
> which has risen substantially in value since then.

Anyone has insights why did they do that? If they were owed 1 BTC, they then
were supposed to be paid 1 BTC, why opt for Yen instead?

My assumption is it was because the last rally of 1k USD had come down to 400
by the time this came around and people felt they were owed equivalent value
in fiat.

~~~
unknown_apostle
I have the form right here in front of me. I requested to be paid in bitcoin.

~~~
roel_v
Yes, you requested to be _paid out_ in btc. That doesn't affect the size of
the claim.

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nihonde
> Over the past three years, from 2014 to 2017, the price of bitcoin has
> increased exponentially, from around $400 to $7,000, by 17-fold.

This nonsensical sentence made me want to stop reading, esp. after the site
requested notification privileges and popped a newsletter modal. Cryptocoin
news sites do at least as much to undermine cryptocoin credibility as the
billion-dollar scam that they're reporting on.

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pc2g4d
This seems like an unjust outcome. Shouldn't there be enough latitude for
bankruptcy judges that they can respond to unusual situations such as the
value of the assets rising to the point that everybody is earning money on the
bankruptcy? Should Karpeles really be made a near-billionaire because he
presided over the theft of hundreds of millions of dollars of other people's
money?

~~~
s73ver_
At the same time, what if the value of BTC plummeted to $1?

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NotHereNotThere
Shouldn't they release the method they used to determine which reimbursement
currency "won"? From what I understand, creditors were asked in a form which
currency they prefer (yen or bitcoin).

People in the comments say the requested a Bitcoin reimbursement, but is it
even possible for them to know what choice others made?

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kolbe
So, what would have happened if bitcoin had crashed to $0? Creditors would
have received nothing because there would have been no value left to
distribute? Instead he got a free "heads I win, tails you lose" exposure to
bitcoin prices?

~~~
Voloskaya
Well no. What he owes was based on the price of Bitcoin at the time not today.
he owes the same amount in yen regardless of the price of Bitcoin.

~~~
kolbe
Right, but he wouldn't have had any money to pay that amount in yen if the
price had crashed, no?

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akeck
I suspect he may end up using a chunk of that on litigation defense.

~~~
tryingagainbro
I'm sure he's trembling with only $500 Mil (assuming taxes) in his account.
Once the bankruptcy court decides, isn't it over for creditors?

Yen vs BTC...maybe the bankruptcy court made that decision? BTC wasn't as
popular back than so quite a few may have happy to get back, anything...yen or
pesos.

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ghshephard
Looked at another way, does this mean that all parties involved in Bitcoin
will be made 100% whole (in Yen) as of the day of the Bankruptcy?

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keymone
wow. considering the kind of people lurking in early cryptocurrencies i won't
be surprised if he ends up assassinated fairly soon.

~~~
bitmapbrother
If it happens it would be the first assassination by keyboard ever.

~~~
LyndsySimon
There's evidence that it's happened a couple of times, at least, in Bitcoin's
history.

~~~
bitmapbrother
Did they use an IBM Model M or Model F as the weapon?

~~~
LyndsySimon
I think it depends on whether the attacker was more skilled at 1HB or 1HS. The
Model F is 1HS, obviously, because F#.

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draw_down
Lovely. I suppose one way out of bankruptcy is for your assets to increase in
value 70-fold.

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rothbardrand
He should get nothing until after all his victims are made whole— in bitcoin,
not USD.

~~~
alasdair_
"creditors requested Karpeles and Mt. Gox to process refunds in Japanese yen
rather than bitcoin"

The people he owed money to asked for it to be this way when proceedings
began.

~~~
dmichulke
I don't recall having requested Yen at any time. There was a form to be filled
out and I clearly stated that I prefer to be paid in Bitcoin. But I guess I am
not big enough a fish to have a say there.

~~~
saalweachter
What do you think the lawyers want to be paid in?

~~~
dmichulke
What's the amount of lawyer claims in percent in this case?

Does or should this enable them to override the wishes of the creditors?

