Former Mt. Gox Clients Agree to a Settlement over the Bankrupt Bitcoin Exchange

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Former Mt. Gox Clients Agree to a Settlement over the Bankrupt Bitcoin Exchange Former Canadian and U.S. users of collapsed Japanese bitcoin exchange Mt. Gox have reached a settlement with Sunlot Holdings to withdraw their class action cases that claim the company stole their bitcoins. In exchange, Sunlot will acquire the bankrupt firm and accept their bitcoin holdings still retained by Mt. Gox.

Mt. Gox, which until its February’s collapse was the world’s leading bitcoin exchange, filed for bankruptcy in the United States and Japan claiming that hackers had stolen its 850,000 bitcoins valued over $400 million. So far, it has recovered 200,000 bitcoins which it says were stored in offline storage.

The company is poised for liquidation after it was allowed to do so by a Tokyo District Court after it decided it will no longer seek to revive itself, reported Reuters.

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The plaintiffs will together receive a 16.5 percent shareholding once Mt. Gox is bought by Sunlot, which is associated with venture capitalist William Quigley and Brock Pierce, a former child actor who is now an entrepreneur. Sunlot proposes to buy Mt. Gox for 1 bitcoin, which is worth just under $500.

The U.S. and Canadian clients will also divide amongst themselves 200,000 bitcoins that were recovered following Mt. Gox’s bankruptcy and will also receive $20 million in cash held by Mt. Gox’s administrator.

“This is the customers’ best option and the only chance they have for full restitution,” said Jay Edelson, an attorney with Edelson law firm, in a statement.  The settlement must be approved by U.S. and Canadian courts that are currently reviewing the class action lawsuits.

The settlement absolves Mt. Gox’s former chief marketing officer Gonzague Gay-Bouchery, its founder Jed McCaleb. The two will in turn help in the cases against other defendants such as Mark Karpeles, the exchange’s CEO, Mt. Gox former banker Mizuho Bank, and parent firm Tibanne and other parties.

The Canadian lawsuit is David Joyce et al v Mt. Gox Inc et al, Ontario Superior Court of Justice, CV-14-500253. The U.S. lawsuit is Gregory Greene et al v Mt. Gox Inc et al; United States District Court at Northern District of Illinois, No. 14-01437. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Deepak Tiwari at deepak@forexminute.com

  • Anonymous

    ha ha bitcoin is heading for the dust. Karpeles looks like he needs a blood transfusion.