TL;DR: Crypto social media raged at revelations former Bitcoin Foundation Chair and CEO of CoinLab, Peter Vessenes, reportedly is jumping ahead of victims in the Mt. Gox debacle. In the years long struggle to recover lost and stolen funds from the defunct exchange, court battles in Japan have dominated the path toward making victims whole. If posted documents and rants are any indication, it appears Vessenes is prepared to slow the process even further with a $16 billion creditor claim some are calling frivolous.
Former Bitcoin Foundation Chair Peter Vessenes Claims Billions Owed from Mt. Gox
Attorney Daniel Kelman tweeted, “Peter @vessenes is now confirmed as the party claiming ¥1.6 [trillion] JPY in damages from MtGox. He apparently thinks MtGox victims should get nothing.”
Mt Gox was, at the time half a decade ago, processing upward of 70% of the world’s bitcoin, and when it finally collapsed, a lot of people lost a lot of money. Investigations were launched. Funds were reportedly gone forever, then were suddenly recovered, and then were revealed to be only a fraction of the real amount. Price appreciations in 2017 appeared to make what was left over more than compensation solvent for victims, and then prices crashed. Trust appointees have dumped BTC onto the market, resulting in, some contend, various price crashes. And those are only part of the story.
The latest wrinkle in the saga can be summed up by crypto exchange Kraken CEO and founder Jesse Powell, who gasped, “Unbelievable balls on [Vessenes] to hold up payouts to thousands of victims for years with an entirely frivolous claim over a botched partnership attempt. How could you think that your $16B claim should be senior to the actual account holders’? How do you show your face?” As of publication Vessenes has not responded.
CoinLab and Gox Go Way Back
Reports from the middle of last year claimed something like $1 billion in BTC would be returned to victims, and it’s not immediately clear what impact Vessenes’ claim would have on that dispersal. However, a court’s challenge is to find who is owed what amount and in what order. Conceivably, Vessenes’ claim could wipe out the entirety of what’s left, and at least hold up the process altogether if a court finds his claim worthy of investigation.
CoinLab’s involvement with Gox is a sticky arrangement, to put it mildly. It has a relationship with the failed exchange, going as far back as 2012 when it became the North American hub for sales. Gox, based in Japan, could tap markets like the US without having to appeal to 50 different set of regulations and agencies. Coinbases of the world were not yet up and running, and CoinLab’s positioning was advantageous.
It’s hard to know if CoinLab was ever fully licensed in the way some imagined, and Gox balked. Gox claimed CoinLab misrepresented itself in various forms. By 2013, the company sued Gox for pulling out of the deal.
Gox countersued, claiming more than $5 million was stolen from its customers and used for CoinLab purposes, and, so far as anyone knows, it has never been paid back. When Gox went belly up shortly after, CoinLab sued again, this time for much more. CoinLab also sued Gox’s parent company, Tibanne, for tens of millions more again.
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