I am not a Japanese bankruptcy lawyer. If a Japanese bankruptcy attorney corrects me, I will edit this post.
However, I work in US bankruptcy. There is an absurd amount of misinformation floating around.
Who owned the 200,000 bitcoin remaining after Mt. Gox went bankrupt in 2014?
Mt. Gox was supposed to have 850,000 BTC. They lost most of that. 200,000 of that 850,000 were later found in cold storage. Mt. Gox declared bankruptcy. Since that point, that 200k BTC has been under the control of the bankruptcy court.
But 35k+ BTC has been sold in the last 3 months. Who is doing that?
The bankruptcy court appointed a trustee. The trustee’s job is to squeeze as much value out of the debtor’s (Mt. Gox) assets in order to repay the creditors (people Mt. Gox owed money to).
This is an incredibly unique situation. BTC has gone from $400 to up to $20,000 since the bankruptcy. Currently BTC is around $9300, or more than 23x the price when Mt. Gox went bankrupt.
What does declaring bankruptcy mean?
Simplified, it means that a debtor (Mt. Gox) freezes its debts and says it will repay these debts before any other. It is more complicated than that usually, but not in this case.
Mt. Gox closed for business, and said I owe ‘X’ amount of dollars to ‘Y’ amount of people. I will repay this amount to the best of my ability using all of my assets, which included 200k bitcoin.
Why is this situation unique
bitcoin was $400 when Mt. Gox went bankrupt. It’s $9300 now. This means that the 200k BTC the Mt. Gox trustee holds went from worth $80 million at the time of bankruptcy to worth just under 2 billion before sale a couple months ago. Normally assets don’t appreciate like that in a bankruptcy case.
Why has the trustee sold 35k BTC
Mt. Gox owed investors just under $400 million dollars, if calculated by the amount owed at the time of the Mt. Gox Bankruptcy in 2014. The 35k BTC has been sold to cover this debt and repay these investors.
Can the trustee unilaterally sell the remaining 165k BTC?
No. The trustee only acts with court permission.
Has the trustee intentionally crashed the market, and bought the dips?
This is in Japan. As stated, I am not familiar with Japanese Law. However, in America, a trustee who abused his power for financial gain would almost certainly end up in jail.
What next?
No one knows. If Mt. Gox owes further debts, the court could allow further BTC sales to cover it.
If Mt. Gox does not owe further debts, the BTC will be released by the court to 1 or more parties. I will not speculate on who or how many.
Long-term, what does this mean?
165k bitcoin will be returned to individuals who may hodl, or sell. No one knows.
Further, no one knows when this will occur. Days? Months? Years? Uncertain. My guess is months—not days or years.
Why did you make this post?
I kept seeing comment after comment about how a Japanese lawyer controls crypto’s future because he currently controls a ton of BTC. I’m trying to correct this misconception.
He does not permanently control anything. Even what he currently controls is subject to court supervision.
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