I was in attendance at the MtGox creditor meeting at Tokyo District Court yesterday. The English language materials that were distributed at the meeting are available at mtgox.com. The materials do not give much guidance and many sections are repeats from previous meetings.
My Japanese translators did confirm a couple points that were discussed verbally but not included in the written materials. The trustee entered into an agreement with the US Department of Homeland Security (DHS) for the return of $2.5M USD that DHS seized from MtGox in 2013. The problem is that DHS actually seized $5M from MtGox in 2013. The trustee’s reasoning was that it would cost more than $2.5M USD to litigate the case against DHS. But why DHS felt entitled to the $2.5M USD that is owed to creditors is not known, perhaps it was based on asset forfeiture grounds.
Why DHS felt entitled to the $2.5M USD that is owed to creditors is not known. Perhaps it was based on asset forfeiture grounds. I’ll leave the discussion on this to other forums. The point is that there is now an additional $2.5M added to the pot, but also $2.5M we won’t be getting back.
No details about the CoinLab claim or the litigation surrounding it was discussed. But the asset sheet still included the roughly $5M USD owed by CoinLab. Safe to say the case has not ended, but no idea on when it will be concluded.
The next creditor meeting was set for six months from March 8.
The pressing question for many of you is how and when you will get paid. Hopefully the following will give you a better idea of how the process will work.
Step 1: Agree on a price, sign NDA and Claim Transfer Agreement. This is a simple agreement setting forth the terms of the transfer, such as you agreeing to sell your claim to the purchaser for X amount paid in a certain manner. The purchaser will provide the agreement to you for your review.
Step 2: Transfer your claim online. To perform this step you will provide the purchaser with your Mtgox.com login credentials and the purchaser will log in and process the transfer of the claim. By this point, you will know the identity of the seller and there will already be a binding agreement between you.
Step 3: Fill out and sign the Claim Transfer Notice. This is a document you must fill out and that must be filed online to transfer your claim. We will provide this document to you.
Step 4: Wait for Confirmation. The trustee has to confirm the transfer of the claim for it to formally transfer to the purchaser. This is exactly what it sounds like: the trustee needs to look at the transfer and issue a receipt. After this step payment will be sent. This last step may require a wait of several weeks to allow the trustee time to approve the transfers. Purchasers understandably want to make certain they will formally own the claim under Japan law prior to remitting payment. We are currently thinking of solutions to speed up this step.
Step 5: Payment. Sellers will remit payment in USD via bank wire. There have been many inquiries about receiving payment in bitcoins, but sellers are not prepared to do that at this moment. Perhaps it is possible to have a wire directly sent to a bitcoin exchange of your choice. If you have any suggestions about how to facilitate payment in bitcoins please feel free to email us and offer a suggestion.
Please also email us any questions or concerns you have about this process. We are happy to answer.
Offers are being made to purchase claims based on the claim’s approved JPY value. The trustee valued every claim based on (a) the price of bitcoin at the time MtGox went into liquidation (roughly $438 USD) and (b) the conversion from USD to JPY. Purchasers are offering a percentage of this value for claims.
For example, if you held ten bitcoins in your MtGox account you would now have a claim worth approximately USD $4,380. You would not have a claim worth over USD $10,000, the value of ten bitcoins at the current price. If a purchaser offered X percent to buy this claim, the offer is for X percent of $4,380.
There is a misconception among some creditors who held bitcoin balances at MtGox about the meaning of “bitcoins may be returned as bitcoins”. The trustee did indicate that creditors may be paid out in bitcoins, but this has nothing to do with how the value of a claim has been calculated. Your bitcoins were assigned a value by the trustee and this is all the claim is worth. You may be permitted to receive this value in bitcoins, though how this would happen has not been worked out.
We lost money at MtGox and became creditors like everyone else. For three years we have followed the proceedings and grown increasingly frustrated at the slow pace of events. We have friends in finance and were able to get in touch with some people who were interested in purchasing claims. There are indeed parties interested in purchasing claims on a claim by claim basis.
Our hope is that this site can serve as an information portal for MtGox creditors. It has been three years and the end is not yet in sight. For those who don’t want to wait, or who need payment now, or who simply or think they would be better off investing whatever return they could get on their own, there is now an option worth considering.
Check out our blog from time to time for updates on the claims process and other news about the MtGox bankrutpcy.