Topic: Mt Gox to liquidate coins (Read 4704 times)

Asset: MK's rubber balls, hammock etc.
funds for distribution: 200K BTC wallet   

That is merely a generic statement. There is no specification as to what "cash" means. USD? JPY? EUR?

The company owes BTC and it would make no sense whatsoever to liquidate coins into a currency (which one by the way, huh?) and refund creditors who have a BTC balance in their accounts with miniscule amounts of currency.

Gox has some fiat debt and fiat balance and if I have to take a guess I would expect that fiat final balances and BTC final balances will be dealt with separately.

Just think of it like this: an institution storing and trading gold for their clients goes broke. Would you be afraid of all gold be sold into fiat? No. The remaining gold would be distributed.

It makes about as much sense as the U.S. bailing out its too big to fail banks. That would never happen, right?

Seriously though, don't you ever get the feeling this municipal bk court hasn't even got a clue how to handle this case? They're not going to start their investigation until 2015! I want to know the real story right now.

They need to fess up on the true status of everyone's money and bitcoins. Blaming it on anonymous hackers having exploited some non-existent bug in bitcoin doesn't wash. That's like a "dog ate my homework" excuse.

The Mt. Gox principals, and their representatives, are merely trying to hide behind the formalities of this bankruptcy proceeding in order to evade having to deal with any real issues. What exactly are they hiding?

If Japan wants to make itself more attractive as an investment destination, they need to reassure investors that their money will be safe, and that they will be dealt with by the authorities neither capriciously or arbitrarily. It's in Japan's interest to help rectify this situation for the 127,000 international depositors.

How could anyone seriously contemplate a buyout offer, especially when it is for a paltry single bitcoin, without full and honest disclosure of the situation?

ya, I had a good giggle at that also....

Are you insinuating that Japan should consider reimbursing customers of Gox with state funds? That sounds asinine.

This Tokyo bankruptcy court appears to be completely in over its head. There has never been a bk like this one before with so many tens of thousands of foreign bitcoin depositors--and with so much money at stake.

Also, Mt. Gox's bank, Mizuho, one of Japan's biggest, is mixed up in this. It is being sued by MG customers in the U.S. and Canada. $27 million in bank deposits are still missing, and someone in that bank has got a pretty good idea where these funds are right now.

According to the Japanese government, business leaders met yesterday and "emphasized the necessity of boosting foreign direct investment in the country, as it has been mired in deflation for nearly two decades amid weak domestic demand."

http://www.4-traders.com/SUMITOMO-MITSUI-FINANCIAL-6496212/news/Sumitomo-Mitsui-Financial--Business-leaders-ask-govt-to-take-steps-to-boost-foreign-investment-18328461/

The article continues that the business leaders feel "Prime Minister Shinzo Abe's administration has to work to enhance the attractiveness of Japan as an investment destination."

This whole Mt. Gox mess isn't helping with the "attractiveness" of investing in Japan. 127,000 pissed-off bitcoin investors can give Japan and it's banking industry a black eye for years to come.

If the Prime Mister's Administration really wants to show some leadership, they would clean this up. China has had to do much the same thing in bailing out its shadow banking industry. Interestingly, China's bailout was for 1/2 $billion--roughly the same amount needed to make Mt. Gox's investors whole.

Because they violate my rights? Complaints? A sale of the coins has far-reaching consequences. Who buys and at what price? Normally such assets will be sold off during an auctions.
Should I then buy my own coins back? Really? All I want is just my remaining coins. The FIAT must be taxed. The sale results in a huge loss for me. An additional and unnecessary loss.
For what? Who would have an advantage? That is the question.


Good point. BB was/is the weirdest thing ever. Gox had obvious problems. The delaying of filing an insolvency became more and more evident to the end. But on BB was still action as Gox already had applied for insolvency. And BB made ​​money with this. How can this be classified? I really do not know.

Every court is supposed to ensure a fair trial, how are you to determine that this one isn't? And then how would you go about getting another court involved.

  I agree with this and in particular the delaying of filing of their insolvency, if thats the case it could get very interesting for trades to be rolled back for a number of reasons. The first one that springs to mind is Bitcoin Builder. Yes I know it shouldn't be considered and people using it were doing so at their own risk but people walked away with real BTC for their gox BTC so that put that side of things in a very sticky situation as far as rolling back trades goes. This is also true for people who sold coins via internal transfer without the use of BB. If I sent 100BTC to someones Gox account in exchange for them sending me 30 real BTC after the roll back date, if everything is rolled back I would then have the 100 Gox BTC back in my account as well as walking off with the 30 real BTC.

I hope that is a misinterpretation. Those coins are customer funds and not working capital of MtGox. Selling those recently found BTC means that our BTC are stolen again.  

The court must ensure a fair trial. If it is not capable of this, it is useless. To mix the remaining assets is the stupidest possible solution with major drawbacks for most debtees. A relatively fair solution would be to treat Bitcoin and FIAT assets separately and to pay an appropriate compensation to the respective debtees. Before, however, the court must determine whether or not Gox delayed filing of insolvency. This is very important for a proper procedure. If so then all trades from a certain date are irrelevant. This could, for example, be the 7th of February.

Any other approach I think is debatable. Thus, another court has to deal with it then.

Join us:

https://www.olivere.de/mailman/listinfo/gox-self-help

You should head over to the #mtgox-talk IRC channel and you will see an answer to a lot of those questions including the new proposal from OKcoin to buy it.

In short though the reason the liquidator can sell the coins is because he is the creditors representative and so is selling his own assets so to speak its all legal and was explain by an attorney who has been in contact with Mark, Sunlot (savegox.com) and Okcoin. The liquidator or bankruptcy trustee is appointed by the court to represent the creditors of Gox.

Here ( https://www.mtgox.com/img/pdf/20140228-announcement_eng.pdf ) MtGox recognizes its assets, before the appearance 200.000BTC. This also they will have to distribute among creditors (all of us). That means they have to pay back about 60% of the deposit to us. I think it should be so. Right?

The Coins are not going to be sold at auction or by any other means, PERIOD. "...the assets of the bankrupt entity will be managed and converted into cash..." It is well established that customer deposits are not assets of Gox; actually the opposite is true. Customer deposits are customer assets and LIABILITIES of Gox.

The Trustee has no authority to liquidate non Gox assets. To put it simply, the Trustee cannot "steal" customer assets in order to pay off Gox liabilities, which would be the same thing as stealing customer assets, then selling them with slippage, commissions, and garbage fees, then disbursing what remains back to the customers???

When you think about it, it is beyond illogical and is not what will happen.

If the Trustee attempts to unlawfully sell assets that don't belong to the entity that he has authority over, he would be liable and open to massive civil suits and this is not going to happen. This is not complicated "high finance."

Gox is international news and the world is watching, the last thing the Japanese government wants is to create some scandal, they media would eat it up. When the creditors meeting happens in July, this will be very thoroughly discussed and with 127,000 voices advising the Trustee of their wishes, it would be as close to impossible for him to go against them as you can get.

What we really should be discussing is how we are going to handle the group that is trying to buy Gox. As I understand, they have been speaking with the supervisor on a daily basis and are not disclosing anything of their discussions as far as I am aware.

I personally think it is a good idea, although I think that all of us with a financial interest should make sure we pay very close attention and start trying to negotiate our best deal with the investors now.

We need to nail them down and get them to commit to a certain course of action now. If we wait, we may be forced to be stuck with what ever deal they give us. Their position is that they do not want to make firm commitments because they do not know what the accounting is going to look like, which is completely understandable. However, there is nothing wrong with us throwing out about 10 hypotheticals that would cover almost all possible outcomes and then getting them to agree to certain terms based on those conditions.

They are putting a lot of effort into this deal and there are a lot of them and they deserve to be well compensated for their efforts and what they bring to the table, however, it is very important for us to start talking about how best to negotiate with them instead of worrying about coins being sold by the Trustee so he can give us fiat so we can buy our coins back nonsense.

If another couple hundred thousand BTC are found, after they buy Bitcoin for 1 BTC and we don't have a commitment from them on how those coins will be distributed/invested/whatever, we could be looking at paying a very high management fee to the new owners.

It is my understanding that they will be purchasing Gox, "subject to liabilities" and they intend to pay those liabilities. If they give us options for stock, it won't include voting rights and management can run the company how they see fit, because they own it.

I can think of a dozen other things that I would like to have hammered out before we commit to blindly supporting the buyout, which is what I believe most of us have already done based solely on the fact that it is the best/only option we have at the present time.

I am interested to hear what you guys think about this and what our next steps should be.

There are some very important questions that need to be asked. Here are a few:

1) What are the actual assets and liabilities? For all we know, there are 50k creditors freaking out and hoping to get back their 200k Bitcoin - all of which can be returned if the 220k Bitcoin were in fact found. (Do you believe any of early announcements?)

2) How will the investigation be conducted, and who decides what assets and liabilities actually exist?

3) When will the sale(s) take place?

4) What sort of identification will depositors be required to provide in order to receive a share of the distribution? (This will be answered in time.)

5) How many depositors are willing to come forth and provide identification? This is touching to why this entire debacle happened.




BTW - There are creditors, and then there are depositors.

People sell at loss.

More some forum guys? Theres people on this forum who are public figures and many of them do deals off exchanges. Its okay I dont need to argue with you its not the point of the thread but buying large amounts of coins off exchange happens whether you want to believe it or not.

So you trust more some forum guys than exchange? good luck surviving with announcment to those guys that you have 5mill$ in your pocket

Yes you can buy 10k off exchange if you know the right people. There are people on this forum who have connections and are consultants for exactly these sorts of buys.

Thats what i was trying to explain, it may not even have an effect, only positive effect off people getting their money back.

My bet is that will have almost no effect on the market price.. 200k BTC is not that much, and if not sold in a hurry, like in hours, it could be a no-event at a price point of view..  We'll see !

The bankruptcy trustee has announced there will be a creditors' meeting on July 23, 2014.  Probably in Tokyo. If you have a sizable amount owed you by Mt. Gox, you probably want to be represented there. That's the place where issues like "pay out Bitcoins or yen" get discussed.

That's three months away, allowing time for further investigation. I suspect more assets will turn up.

Auctioning off the btc in lots is a legal way of winding things up. I do not think it makes much of a difference to holders of gox coins. Price of btc is going to remain low anyway, holders can put them straight back into btc if they wanted to.

Good luck trying to buy 10k btc off exchange, you tried to buy 1k of them like that? well than keep your fingers off my posts trying to make things easier for me, you don't need to do it, for me, it has always been easy, and don't feel like a finance markets proffessor.

Kobayashi is the lawyer.. Keyser Soze stole my coins!

My guess: This is a standart document phrased in standart legal terms, which aren't specifically made to deal with situations involving crypto currency. If those "certain experts" are indeed experts and thus members of the bitcoin community I guess they will advise the bankruptcy trustee that the customers indeed get their BTC sent back as BTC if technically possible ( that means if the wallet of MTGox is still intact and in the trustees access).

I also agree with the guy in this thread that pointed out that the BTC the company held for their users can hardly be seen as company assets fit for liquidating in order to payout fiat creditors, not even legally. But i am no expert on that.

Could you direct me to the part of the doc that discusses releasing Bitcoins to customers? The closest thing to that in the doc is that liquidity distribution will take place IF funds are secured. In other words after all is said and done there's still a chance that creditors get nothing back.

Plus is says that the bankruptcy trustee will consider distribution.

Liquidating Distribution:

Q. Will there be any liquidating distributionto the creditors? How will it be conducted?

A. The bankruptcy trustee will consider these matters as the bankruptcy proceedings progress.

While I agree saying that they were definately liquidating coins was hasty (This was posted after just the first read through)  the discussion has moved more from will or won't they liquidate them to how would this affect the market.

This is the most ambiguous part though

Q. Please return the bitcoins and cash that I deposited with the Company.

A. We will make the liquidating distribution to the bankruptcy claims if funds for distribution are secured. With regard to the liquidating distribution under the bankruptcy proceedings,please see below.

Why would they say if funds are secured? They know that the company has BTC secured so why no mention of this?

No they would be sold at auction likely in lots.

I don't think you really understand what your talking about, there are plenty of people who are looking to buy large amounts of bitcoins off exchange for a number of reasons. Ill keep it simple for you and not go into all the reasons but try this one;

If I wanted to buy 10k BTC what do you think the price would go up to on exchange if I tried to that?

I'll be kind and give you another;

I dont really trust sending $2mm to an unregulated company how do I got about buying a large amount of BTC, yes right again off exchange.

The fact that you think people trust gox because they 'found' 200k BTC even though they lost 850k plus many millions of dollars is asinine.

It said the company is liquidating, meaning it will lose all its assets, but I cannot find anywhere that it says it is liquidating its Bitcoins into fiat, it even contains questions regarding the release of Bitcoins to customers.  One of us is misreading this and I read it twice (though it is boring and I may have missed something).  All it seems to say is Mt. Gox as a company will not come back, it may be bought out by the proper buyer although they think finding such a buyer will be difficult, and the balances shown on the website only reflect the Bitcoin balances before the alleged hack the real balances are unknown. 

Am I missing something, it seems there is zero evidence of this claim, yet people are still discussing it.  What gives?

Where do you think you can sell 200k BTC? in local mcdonalds?

about higher trust:compare global public image of mtgox before they announced they have 200.000 btc and are willing to repay, and after

This depends a lot on the definition of "assets". Customer funds are not company assets. This does not even depend on what the company traded... if they traded coffee beans, beans held on behalf of customers would not have been company assets as well, they would still have belonged to customers and not to the company.

Selling office furniture, computers and cars is a thing... disposing of customer properties is something completely different. A bankruptcy trustee should know the difference very well.

since when can bankruptcy procedure allow to take ownership of any third party property? Those coins were NOT property of MtGox, rather they were customers property, and shall be returned to legitimate owners!

Since when does Mt.Gox TOS overrule bankruptcy procedure?

WTF?? Those 200k coins are NOT a Gox's asset, they can't sell them to repay fiat debt! They were just held on customers behalf, according to the TOS:

A few things;

They will not be selling them like that, its not how liquidations of assets go. However if they were to sell them on exchange it would definately have an effect on price, the volume on some days recently has been less than 5k!

Also
Can you clarify exactly what "another thing is higher trust in BTC since something happened around Mt.Gox" means.

They are not that stupid to dump 200k BTC. They will be selling them slow, maybe 5k per day, so don't worry too much on price effect of dumping. Another effect is higher supply of BTC, which can lead to lower price yes, another thing is higher trust in BTC since something happened around Mt.Gox, which in the end is getting price to rise. So net effect is hardly predictible, but it may even cause higher price.

We should try to get more information about how these 200k coins will be treated. If they are to be liquidated then surely they will be auctioned. If so how many per lots, who will they be auctioned to?

If they fall in the right hands, this can actually a good thing for the future of the currency. However I seriously doubt that they will.

Do you mean the liquidators when you say people selling or are you refering to the creditors?

If you are referring to the liquidators they don't really care how much they get, just whats quickest and easiest.

If you are refering to the creditors (gox coin holders) then they don't really have a say.

Please read what I actually wrote;

"no BTC balances returned to the users.". The BTC will be converted to cash.

Q. What is expected to happen under the bankruptcy proceedings?
A. The bankruptcy trustee will implement the bankruptcy proceedings, in which the assets of
the bankrupt entity will be managed and converted into cash, the investigation of the claims,
etc. will be conducted, and if funds for a distribution are secured, the liquidating distribution
will be made.

Again

Please point me to the part that says it will be dumped all at once for fiat on Stamp.

It says converted to cash there a slew of ways to do that and none of them will involve a market sell on Stamp.

The published document doesn't say anything like that. It says instead quite the contrary: an audit of company assets will be conducted, proof of claims will be filed by creditors and found company assets will be used to (at least partly) repay them.

Nobody will probably get back everything he/she owns unless stolen/hidden money is found, but anything available will be refunded.

Why are you saying no balance will be returned to users?

What is going to happen is that the price will drop a bit.  Everyone will snap up the coins for a cheaper price, establishing huge levels of support.  Price is back to pre-liquidation levels within 1 month.

That's making the assumption that the people selling are willing to take any price for their btc no?

No? Again
Quote:

Q. What is expected to happen under the bankruptcy proceedings?
A. The bankruptcy trustee will implement the bankruptcy proceedings, in which the assets of
the bankrupt entity will be managed and converted into cash, the investigation of the claims,
etc. will be conducted, and if funds for a distribution are secured, the liquidating distribution
will be made.


https://www.mtgox.com/img/pdf/20140424_announce_qa_en.pdf

They wont be dumped on Stamp for fiat....

When 200K bitcoins will be dumped on bitstamp for fiat, with the current order book the price will indeed be zero:

Even if it's an auction, they will probably be sold anywhere between 50-75% of the current market price, those coins will soon appear on the exchanges to be dumped for that 25-50% profit by the buyer.

Even without rationalization, panic is whats going to happen, and that always affects the price.

I think it will be auction, so it will not affect price. Cant imagine the liquidator send the coins to foreign unregulated exchange and just HOPE they send the USD (same like MtGox  )

You cant see why the increase in the supply by 200k coins would casue downward pressure on the market?

In the end people will get pennies on the dollar, of those people which is more likely; They say F bitcoin I'm keeping my 10% or I know lets go and put the money I received back into what made me lose it in the first place?

By what standards is BTC cheap at the moment when early adopters who bought coins for next to nothing or mined them probably held the majority of the coins on the exchange?

Yeah I can't see why this would have any effect at all. Might have the opposite if the people who lost money cut their loses and decided to buy back in while it's still fairly cheap.

Yep but with Fiat debts to pay it probably gets very confusing.

Also do you think its likely that a Japanese liquidator is seriously going to start sending out BTC? Most people dont even understand it let alone start using it in a legal process.

Of course it makes more sense to give the bitcoin, instead to convert it to cash. I FULLY AGREE WITH YOU.

But you know how much they hate bitcoin right?

All the best

Wouldn't it make more sense to give the bitcoin they have to those filing claims?
Dang it! Every single time I buy bitcoin the price drops again! I think I should stop buying just to help the market!!!

Because at the time you didn't provide a source.

Gox is the gift that keeps on bending people over, so here comes $0.01 BTC!

Well if 200K of bitcoins will be liquided, than you can expect some pressure

Quote:

Q. What is expected to happen under the bankruptcy proceedings?
A. The bankruptcy trustee will implement the bankruptcy proceedings, in which the assets of
the bankrupt entity will be managed and converted into cash, the investigation of the claims,
etc. will be conducted, and if funds for a distribution are secured, the liquidating distribution
will be made.


https://www.mtgox.com/img/pdf/20140424_announce_qa_en.pdf

Because 200k coins that were not available and part of supply are going to be sold and thus become part of the supply. We can expect that there will be buyers who will hold onto their coins but the fact is that these will likely be sold below market rate and so some people will sell them for easy profit.

An increase in supply means the demand has to rise as well otherwise the price drops, simple economics.

It seems that most people have been selling at a loss lately. Stop-loss tactics i assume, which isn't a bad idea considering the trend.

Ok ...so lets be ready for the fall ...panic sellers will join the league. Time to make money strong hands. Buy time is coming

Why would this effect the price of BTC? Isn't the damage done already?

I personally expect the price to drop to around wherever the coins are bought for, the people buying them are not going to sell them at a loss so I cant imagine going lower than whatever the cost price ends up being.

I expect the bottom to be at around $200

Im opening a serious discussion Im not sure why your trying to mock it...

So then it is confirmed that Gox' coins will be liquidated and no BTC balances returned to the users.

https://www.mtgox.com/img/pdf/20140424_announce_qa_en.pdf

What effect will this have on the market?