Topic: New Mt. Gox class action in U.S. - page 2. (Read 6503 times)

Certain information is either known or can be conjectured from the available evidence.

There is the alleged missing $27 million in bank deposits. I presume Mizuho or one of Mt. Gox's other banks is probably sitting on it.

A second point is the proximate cause of Mt. Gox declaring itself bankrupt. It seems very likely that the company experienced a cash flow squeeze in which it was unable to service its debts, and said inability resulted in its banks calling in their loans. With no money, Mt. Gox could not continue to operate. Wages could not be covered; rent, service providers, etc. could not be paid, and these creditors would probably file suit in order to recover any outstanding balances. Bankruptcy was the only option at that point.

When a company is being stripped of its assets, the goal of the perpetrators often can be to force it into bankruptcy, and then pose as the saviours who will restructure and return it to profitability. Once they win control over the victim company, then they divide up the spoils, and leave behind an empty shell.

Asset stripping is a nasty business. That's why Mt. Gox depositors need a friend in court, and someone to look out for their interests.
 

I don't think there's any information in the public domain about that either way. But in any case it seems unlikely that Gox have substantial debts beyond what they owe depositors, so even if depositors were somehow considered to have priority it wouldn't make much difference to the eventual payout.

I suspect the bank deposits were used to buy BTC on other exchanges at a discount and then sell BTC on GOX (prior to halting withdrawals).

As far as the BTC, I am not sure. If there was an issue with missing private keys I would think that they would have disclosed this by now, or originally.

 

I  don't have very much skin in this game and not a lot of money for it.

I've already outlined what I thought could work. It's human nature to respond better to carrots than sticks, so it would be counter-productive to ever threaten anyone with anything when you want to get their cooperation.

Simplistically stated, should you want to get a fair shake in Japan, try getting the Japanese authorities on your side. Offer them something they want in exchange for fair treatment.

While I'd love to be pleasantly surprised, it does not appear that right now the bankruptcy proceeding is being administered in the best interests of depositors. Rather, depositors will likely be lumped together with all other "unsecured creditors", and then apportioned some amount of cash from the proceeds of auctioning off the 200,000 bitcoins.

This really stinks, and there has to be a better way!

How much money you got?

What are you gonna do?

Threaten to nuke Tokyo?

Offer them a deal they can't resist?

There needs to be some kind of flanking maneuver.

Then the situation could be B.T.N. ("Better than normal"). At least there is always that hope.

Takes a lot of money to pursue the issue in Japan and apparently that money is not forthcoming.

Situation normal, all fucked up.

S.N.A.F.U.

And where did it go? That's the big question. It didn't disappear by itself. Someone has the money (especially the bank deposits).

I'm not sure that's the problem. I'd say the recovery effort is going nowhere because the situation is beyond recovery. They seem to be something over a billion dollars in the hole. If they'd lost 20% or something they might be able to get back to solvency by getting some large creditors to take voluntary haircuts - this is what Intrade did - but if you've lost 80% there's pretty much no way that's going to work. Every creditor who refuses to get crammed down increases the amount you'd have to cram down the depositors who do agree. Unless they've secretly got a lot more assets left than they're letting on, the situation is impossible.

I don't really understand what Sunlot are trying to do but the best guesses would be:
a) There's some kind of scam involved like fixing the final price on the exchange at about $100 (note that it seems like somebody did actually try to fix the price like this), valuing bitcoins at that, then claiming that's how much you owe the bitcoin holders. You'd think the trustee would see through that, but I suppose once they'd sunk a lot of time and money into it prior to the bankruptcy you couldn't blame them for trying it on and hoping they get lucky.
b) They really expect liquidation to happen, but want a seat at the table to buy some cheap assets when it does.
c) They're getting strung along by their lawyers for fees...

I probably should have been a lot more clear. I was never suggesting a mobile bitcoin app was needed in Japan, but rather in Myanmar and Bangladesh for micropayments. As mentioned in an earlier post, the Ministry of Finance has had an interest in stimulating trade with these two developing countries and believes bitcoin can play an important role. They call it their "Asian Trade Revolution" strategy.

What I was proposing is much more of a tit-for-tat exchange. The Ministry helps the bitcoin community by lending its oversight to the Mt. Gox bankruptcy in order to help prevent delay and fraud, and members of the community assist with Japan's strategy by offering to test a mobile bitcoin app for them--one that will work well in both these two countries for micropayments. It needs to be tried out with a wide variety of devices, because the cell phones available in developing countries are much less homogeneous than you find in developed countries where virtually everyone has a smart phone or tablet.

I'll admit, my idea is kind of half-baked, and it needs further fleshing out, but you have to ask "why would the government of Japan help out Mt. Gox depositors?", and perhaps one answer is because depositors, through their participation in the bitcoin community, are offering to do something in return that the government values.

I don't think it is a good idea to file additional court cases against GOX.

They already have less assets then liabilities so account holders will receive less then what they deserve.

A court case is only going to force GOX to spend more money on their lawyers, money that they could have given to account holders.

There is always one winner in class action cases and it is always the same - the lawyers.

In Japan, most of the mobile phone service providers, such as DoCoMo, are also payment processors, registered under the Payment Services Act. Mobile payments work just fine in Japan. No need for Bitcoin.

Everyone agrees - biggest mess ever. The question is, how do we ordinary people--some with expert skills ourselves--help clean it up.

Mt. Gox depositors can either take an entirely passive role, merely letting the bankruptcy court handle it all, and await the outcome at some future date--good or bad, or else attempt to influence the situation in a more proactive way.

Anyone who has been through a court proceeding knows that it helps to have a "friend in court". While the Japanese government is probably less than ideal, as most governments have never been known for playing "nice" with bitcoin, their oversight of the Tokyo bankruptcy could turn out to be key in getting a fair shake. At least it would give the community a little bit of leverage in the situation, instead on its present course, wherein it seems to have almost none.

Sad to see that exchange that initialy raised bitcoin in price and popularity is the same that did us alot of dmg by their incompetence
they had alot of profits during the days, it is their fault not to hire experts to do what they couldnt.

And this isn't just any government, it's the Japanese government.

If government is involved in any capacity there will always be "undue delay."

These two things are not consistent.

The quality of smart phones that people are using in developing countries is not as good as in the developed world. Any mobile ap would need to address the lowest common denominator in terms of cell phone technology to get the broadest possible coverage. Mt. Gox depositors could provide an ideal test-bed for testing out as many different versions of this mobile bitcoin ap as possible--one that will run on older smart and not-so-smart phones as well as the newer ones.

Since the Japanese government would want to develop and promote this technology as part of its "Asian trade revolution" strategy, this is something depositors can agree to do in exchange for the Ministry of Finance taking an oversight role with respect to the Mt. Gox bankruptcy proceedings in Tokyo. It could help to ensure that the matter is handled without undue delay and to alleviate any concerns about possible fraud.

Yes. Large volume and high velocity equals lower risk due to market fluctuation for a payment processor. Surely Mark K. was working on this, but too distracted trying to hold the basic business together to take MtGox to next level. There are certainly areas where Bitcoin and a large international and liquid exchange like this could leapfrog current business infrastructure and create value propositions that will quickly require adoption for survival.