Mt. Gox Creditors Seek Trillions Where There Are Only Millions


$2,411,412,137,427.

That figure — $2.4 trillion for those with an untrained eye for very large numbers — is in the same ballpark as the annual economic output of France.

It is also exactly the amount that people around the world claim they lost when Mt. Gox, the Tokyo-based virtual currency exchange, collapsed into bankruptcy in 2014, after huge, unexplained losses of the volatile digital currency Bitcoin.

As with most of the people who lost money with Bernard L. Madoff, the investment manager who was convicted of running a Ponzi scheme, most of those who put their Bitcoin in Mt. Gox will be disappointed: The Japanese trustee overseeing the case said on Wednesday that only $91 million in assets has been tracked down to distribute to claimants — a small portion of the more than $500 million in assets that Mt. Gox claimed it had in the weeks before it went bankrupt in February 2014, and a tiny portion of the amount that claimants have requested.

The giant gaps between those numbers are an indication, if nothing else, of the sheer number of dishonest people who have been drawn to the fiasco around Mt. Gox and Bitcoin. They are also the latest reminders of the topsy-turvy nature of the digital-currency realm. A currency designed to bring computer precision and traceability to money has been marked by multiple unsolved mysteries swirling around it.

Journalists and others have made many unsuccessful attempts to determine the true identity of the creator of the Bitcoin technology, a programmer or group of programmers going by the name Satoshi Nakamoto.

Bitcoin experts and law enforcement officials have spent over two years trying to figure out how hundreds of thousands of Bitcoins disappeared from the Mt. Gox exchange. There have been lots of conspiracy theories but few solid answers.

The amount that claimants have requested from the Mt. Gox bankruptcy estate is absurd on its face, given that all the Bitcoins in the world today are worth about $7 billion, or 0.3 percent of the $2.4 trillion being claimed.

Most of that huge number is an outsize claim by one individual — but even after that is taken out, the rest of the claimants said they lost some $27 billion, or 54 times what the exchange claimed it held before it went under.

The trustee said on Wednesday at a meeting with creditors that $414 million of the claims appeared to be legitimate and have been approved. Each of those claimants will get some portion of the $91 million. It is not yet clear how much because of outstanding lawsuits and investigations.
Bitcoin investors have complained about how long it has taken to work through the claims, not to mention the legal and accounting costs. The trustee reports that those costs have added up to about $55 million so far.

“I am disturbed by the amount of money which the bankruptcy process has burned through,” Kolin Burges, one of the most outspoken creditors, said on Wednesday. “We have seen very poor results from the investigations, and the details have been constantly shrouded from the creditors.”

http://www.nytimes.com/2016/05/26/bu...ions.html?_r=0