850,000 Bitcoin (BTC) disappeared when crypto exchange Mt. Gox crashed five years ago following a series of security breaches which cemented the crypto industry’s reputation as insecure. However, one controversial crypto celebrity Brock Pierce is looking to help Mt. Gox implosion’s 24,000 victims get their money back as he builds the company on a new foundation.
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Pierce Looking to Make Mt. Gox a Force to Reckon With
Pierce made his plans known during an interview about Gox’s Rising. He gave insight about how he intends to reboot Mt. Gox and challenge exchanges like Coinbase and Binance. Pierce claims that there’s up to $630 million and 150,000 BTC waiting in Mt. Gox’s bankruptcy trust. The controversial figure wants to tackle the legal and technical drawbacks to getting said assets distributed to their rightful owners.
How Mt. Gox Fell
Mt. Gox rose to prominence as one of the leading cryptocurrency exchanges in the world, handling 70% of all Bitcoin transactions. However, security breaches, technology issues, and an unclear regulatory atmosphere were plaguing the service at the time.
Things fell apart by February 2014, when Mt. Gox halted withdrawals because of a bug in Bitcoin (BTC), which trapped assets in user accounts. The exchange discovered that it lost over 700,000 BTC through theft in the last few years. By the end of February, Mt. Gox had suspended trading and filed for bankruptcy, which would contribute to a 36% decline in the price of Bitcoin (BTC). The exchange admitted that customers 850,000 BTC with about a 100,000 owned by the exchange had been stolen by cyber criminals.
Pierce’s Rescue Attempt
Pierce managed to make a successful break into the cryptocurrency business, establishing a World Of Warcraft gold mining farms in China. The crypto celebrity claims to have run the world’s biggest exchanges for Second Life Linden Dollars and WOW Gold.
Sunlot, a US based company, has been trying to undertake the rehabilitation proceedings, but the arrangement was effectively derailed by a CoinLab lawsuit. CoinLab claims to have partnered with Mt. Gox 5 years ago to carry out its North American operations but alleged that it never received the required assets, going on to sue Mt. Gox for $75 million. In return Mt. Gox countersued, insisting that CoinLab was not legally certified to carry out operations for the exchange in the United States and that it had not returned the $5.3 million customer deposits received.
All Mt. Gox customers who are worried that they may receive the cash equivalent of their BTC according to the $483 value in 2014 need not worry. In June of last year, a Japanese District Court opted to halt the bankruptcy proceedings and issued that Mt. Gox goes into civil rehabilitation which in essence means that the company’s assets would be evenly distributed to its creditors instead of going into liquidation. The court also declared that users or creditors would be paid their lost BTC rather than its cash value from 2014.
Now Pierce and Sunlot are attempting a second rescue of Mt. Gox’s $1.2 billion assets. Pierce wants to track the remaining missing cryptocurrency and have it fairly valued, before distributing the maximum sum to the robbed users while Mt. Gox equity shareholders including Pierce will receive nothing.