Andy Pag, the founder and coordinator of Mt. Gox Legal (MGL) — the largest group of creditors of the now-defunct Bitcoin (BTC) exchange Mt. Gox — has quit his post and decided to sell his claim. Pag announced his decision in a letter posted to the MGL contributor forum on April 4.
Mt. Gox Legal — a cooperative of over 1,000 creditors with claims reportedly totaling more than an estimated 125,000BTC (~$649 million at press time) — was formed to seek coordinated legal action to support Mt. Gox’s transition from bankruptcy proceedings to civil rehabilitation (CR).
This transition, which formally took effect in June 2018, should ensure that creditors are reimbursed in crypto, rather than in fiat currency equivalent to the value of their BTC holdings at the time of the exchange’s collapse.
As previously reported, Mt. Gox was notoriously hacked in 2011, with around 24,000 creditors reported to be affected. The subsequent collapse of the exchange in early 2014 led to loss of a reported 850,000 BTC, valued at roughly $460 million at the time (~$4.2 billion at press time).
Pag, who will leave his role as MGL coordinator at the end of April, also revealed his decision to sell his claim for an instant payout from a buyer offering $600 p/BTC, with a ~33% return in a year. While offering to put fellow MGL creditors in touch with the buyer, he emphasized it was a highly personal decision.
In his letter of resignation to MGL members, Pag cited his belief that reimbursement is likely to take a further 18-24 months or longer, despite recent indications from Mt. Gox’s CR trustee Nobuaki Kobayashi that decisions over creditors’ claims had been concluded in March.
Pag gave several major reasons for this belief, foremost that prospective reimbursement and distribution of assets is likely to stall for a significant period of time as Japan’s judiciary assesses an outstanding $16 billion claim from CoinLab, which was allegedly filed in February.
As Cointelegraph has previously reported, in 2013, CoinLab — a former business partner of the exchange — originally sued Mt. Gox with a bankruptcy claim of $75 million, claiming breach of contract. The figure has since risen to $16 billion amid the civil rehabilitation proceedings.
In his letter, Pag said that his recent meeting with Kobayashi confirmed his fears that the trustee would delay filing a civil rehabilitation plan “until the Coinlab case is settled, and that means not just assessment, but through however many rounds of litigation they take it to.”
Pag further gave reasons for his distrust of Mt. Gox ex-CEO Mark Karpeles’ conduct in the CR proceedings, which he “suspects will be the source of more costs and delays.”
As reported, a Japanese court recently served Mark Karpeles a suspended jail sentence after he was found guilty of tampering with financial records. He was, however, acquitted of embezzlement.
A separate so-dubbed “GoxRising” movement, is being spearheaded by controversial crypto figure Brock Pierce, who has claimed he can reboot the trading platform and accelerate compensation for creditors.