This article was originally published here.
The tragedy that is Mt. Gox is one that many cryptocurrency investors know as one of the worst cases of theft. A massive hack in 2011 ended up collapsing it a few years later, resulting in an 850,000 BTC loss, which was about $460 million back then. Now, it would be valued at approximately $3 billion. There are some investors still trying to recover from it.
One controversial force in crypto named Brock Pierce has expressed interest in reviving the platform and bringing back the funds to those who lost it. However, the former CEO of the Bitcoin exchange, Mark Karpeles, is saying that it cannot be done, according to a private conversation with CoinTelegraph.
Pierce’s name is recognizable in the cryptocurrency world for cofounding Blockchain Capital, Block.one, and EOS Alliance. Now, he is saying that the fastest way to return the funds to the investors that lost it is through the lifting of several legal and technical barriers that are presently in the way. By restarting the platform, Pierce would develop a united, tokenized foundation for creditors. However, the main goal that Pierce aims to achieve through all of these actions is the revival of Mt Gox.
Karpeles spoke with CoinTelegraph on this situation, saying that the rights belong to him and not Pierce, which means that Pierce cannot relaunch the exchange. The whole dispute centers around letter of intent that Sunlot Holdings Ltd (a company owned by Pierce) sent to Karpeles in 2014.
Ultimately, no agreement was reached back then or now, and the letter was withdrawn. Adding more to the story, Karpeles told CoinTelegraph,
“The letter of intent is a proposal, which was supposed to result in an agreement within 45 days, on condition of approval by the court, the trustee and/or anyone the court appoints.”
He continued, “As far as I know no agreement was reached within 45 days, nor did the court and the trustee approve such an agreement. We were working with our lawyers at the time in good faith to follow the terms defined there but failed to hear back from Sunlot after they assured, they were working on this, including assisting in getting approval from the court.”
Karpeles also said that the idea that this relaunch would help creditor recovery is false, adding that it could be settled in just a year. Until now, Tokyo attorney Nobuaki Kobayashi has provided a time frame of 3 to 5 years.
The attorney was originally assigned as the civil rehabilitation trustee for this matter, as directed by the courts. Speaking on Pierce’s idea that the process could go faster, Karpeles noted,
“I haven’t heard at this point anything that would make this possible from Gox Rising [sic]. The published plans seem to imply reviving Mt. Gox and creating a lot of complex legal structures which may take time to happen.”
The entirety of the potential success of Pierce’s plan is backed on the idea that half of the creditors would join the Mt Gox revival, which is being called GoxRising. Karpeles is not convinced, saying,
“I do not believe ‘presenting a united front’ would help things much, and if anything, any attempt to push things against the advice of the court as Brock has done before would likely result in further delays. More than anything I do not believe at this point all creditors would align behind him, so it would likely result only in more divisions.”
Karpeles had recently been charged with embezzlement of 340 million yen (about $3 million) during his time running Mt. Gox. The charges also suggested that he had altered the ledgers of the exchange to make the cash balance appear more substantial than it was.
In December, Karpeles pled “not guilty” in his argument, though the final ruling will not be delivered until March 15th of this year. If found guilty, the prosecutors hope to secure a 10-year prison sentence.