
Mt. Gox commences bankruptcy proceedings [pdf] - sillysaurus3
https://www.mtgox.com/img/pdf/20140424_announce_qa_en.pdf
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pearjuice
This is the easy way out for them. Instead of battling the unjust done to
their users, they simply call it a day and leave millions of people with non-
refundable money they were trusted with.

I am absolutely certain the owners or at least an elite top at Mt. Gox have
made a gain from this. Due to the nature of Bitcoin we will never 100% be
certain where the coins exactly went, but it's highly unlikely they just
vanished in air somewhere.

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nomailing
That doesn't make sense. Due to the nature of bitcoin we might actually be
able to know where the coins went. what do you mean by nature of Bitcoin? if
someone steals yoir wallet, then due to the nature of your physical wallet we
will never 100% be certain where it went. Due to the nature of Bitcoin there
is a trace left in the blockchain.

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perlgeek
People keep saying that, and one would think that if it were that simple, and
enough people lost money/BTC on the MtGox debacle, then someone would have
gone hunting for it, and found it.

I have read no report, so if it hasn't happened yet, why should I believe it
will happen?

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danbruc
It is that simple once you know all of MtGox addresses and transactions. But I
doubt you will ever get that information, I even tend to doubt MtGox that
MtGox has this information itself.

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eterm
No it isn't that simple, because a 1BTC on a MTGox account isn't the same
thing as 1BTC on the blockchain, if it were then Gox wouldn't have collapsed
the way it did.

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danbruc
MtGox internals don't matter for tracing the lost coins. You need to know all
addresses owned by MtGox, then you also know all the coins deposited to MtGox,
and you need the list of legitimate withdraws. Then you can just look what
happened to the coins not legitimately withdrawn.

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mschuster91
Well, they likely want to turn the bitcoin assets still left in cash.

But wouldn't a 150k BTC dump on the biggest exchanges literally obliterate the
exchange rates, as well as massively devaluate the assets?

~~~
hga
Only if the liquidation trustee is an idiot, and courts try to avoid
appointing idiots to that position.

The concept of suddenly dumping too much "X" on the marketplace is so well
known I wouldn't expect this to happen in this context (compared to, e.g.,
some of the stunts the Congress pulled in the jihad against "junk" bonds
and/or trying to "fix" the S&L crisis).

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aloksudhakar
I had 2 BTC and $6000 USD in mtgox.Will I be getting them back after the
bankruptcy proceedings? Please someone explain me clearly.!

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matthewarkin
Basically what happens under bankruptcy is the trustee sells all the assets of
the business. From that revenue, the trustee pays any costs related to the
administration of the bankruptcy proceeding, whats left over gets distributed
to the creditors.

~~~
aloksudhakar
Thanks. Creditors means Mtgox users like me who had BTC and currencies in
mtgox? What if the trustee couldn't make an enough revenue to pay all the
mtgox users?

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matthewarkin
Yes, Creditors are people who Mtgox owes money (you've extended a line of
credit of X bitcoins or fiat to them). This is really not a what if. The whole
purpose of bankruptcy is because the entity can meet all its financial
obligations, if the trustee could make enough revenue to pay all the users
than company assets (bitcoins in wallet) would equal company liabilities
(bitcoins that belong to users). After all the stuff is sold, and expenses
related to the administration of bankruptcy proceeding is paid, the remaining
funds is distributed in an order of priority to the creditors (so back wages
normally have priority to other liability). Assuming all users are in the same
priority level, it would be a safe judgement to assume that each user would
get a percentage of the remaining funds = user's number of bitcoins / total
number of user bitcoins. This is how it works in the US at least, I'm not
versed with Japanese bankruptcy protection laws but assuming its similar,
you'd be lucky to get a portion of the money you're owed. If I recall
correctly, they owed about 700,000 in btc and they found 200,000, assuming no
other assets / liabilities / expenses you'd get 28% of your btc/fiat back.

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aloksudhakar
Sir,Thank you so much for the taking your time to make a better explanation.!
I really hope I could get back at least 50% of what I lost with Mtgox.!!

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blacktulip
So does it mean my 20 btc is permanently gone?

~~~
jrockway
Gone? Probably not. In the possession of someone who will not give them to
you? Probably.

~~~
blacktulip
To me they are gone

~~~
serf
That's true, but you asked a group of pedantic programmers.

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zo1
Bankruptcy should mean that the individual(s) responsible for the debt need to
be held liable for it indefinitely. Regardless if there is a
corporation/LLC/company between the responsible individuals and the people
that lost their money.

As an example, the responsible individuals of Mt.Gox would need to come up
with a repayment plan for every single penny/bitcoin that they still owe. The
fact that it was _" stolen"_ from them is irrelevant, as the users entrusted
the safekeeping of their money/bitcoin to MtGox. If that means that they will
continually have X% of their yearly incomes divied up amongst the users, then
so be it. And this will continue indefinitely until the debt has been repaid.

Sadly, this sort of solution to the problem would never be instituted in our
society. Precisely because it exposes flaws in our concept of the relation
between debt and slavery. In essence, it would put the individuals responsible
for the fraud in a sort of indentured servitude until the debt has been
settled.

It does sound like quite a _scary_ proposition, I'll be honest. As it's
something completely alien to what we're accustomed to when it comes to
debt/bankruptcy. But I assure you, if this were ever instituted, and a few
individuals got bitten by it: Society as a whole will grow in a much safer
direction, both with more security precautions when debt is involved, and with
insurance to cover losses such as this. All that, _without_ state
intervention/bailout.

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Negitivefrags
The entire concept of the company was created for Limited Liability. Without
that you are basically just a partnership.

You need limited liability or investment becomes a very risky prospect.
Imagine investing to get a 10% stake in a startup company and they end up
getting sued because they violate some patent accidentally?

The current situation all comes down to intent. The way it's supposed to work
is that if someone was actually negligent in their duty, then, and only then,
do they become personally liable.

You say the fact that it was stolen is irrelevant. Lets say someone ram raids
the office, holds a gun to the CEOs head and demands the keys to the bitcoin.
Do you think that he should be personally liable in that situation?

My point is that shit happens in business, debts can be created in unexpected
ways and sometimes those debts can be far in excess of what was invested. It's
not really reasonable to expect shareholders to be personally liable come what
may.

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tpeng
I agree that the concept of limited liability is critical to modern capitalism
and entrepreneurship, but I think you may be mistaken about the history of
companies.

The concept of corporations is based on a legal identity that is separate from
any individual. Incorporation historically was a rare grant at the behest of
the ruling monarch. This dates back to the Roman Emperors, who granted
incorporation to municipalities, guilds, and religious groups. However, these
corporations are distinct from what we would consider a company today. The
typical business did not have access to incorporation.

Several of the oldest known companies, dating back to the 6th century, were
Japanese companies that were family-owned, and were not legally limited in
liability. The concept of joint-stock companies is based on transferable
shares, and dates back to at least the 13th century. Limited liability was not
really a legal concept (separate from royal charters) until the 19th century.
The first joint-stock companies in England were unlimited liability, and the
public was very much opposed to the concept of liability limitation. However,
many joint-stock companies wrote liability limitation clauses in contracts
with creditors, and these were considered legally enforceable. In the second
half of the 19th century, most European and US states had adopted limited
liability laws. Limited liability is a modern concept that has not existed for
most of the history of companies.

