Mark Karpeles Open Letter to Coinlab Looks to Settle Lawsuit for $5M

Mark KarpelesOn May 10 Bitcoin.com reported on how bitcoin’s price rise is slowly bringing the Mt Gox bankruptcy closer to solvency. The former CEO of Mt Gox Mark Karpeles confirmed that the price was helping, but the Coinlab lawsuit was a significant deterrent. Now Karpeles has written an open letter to Coinlab’s founder Peter Vessenes asking

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Mark Karpeles

On May 10 Bitcoin.com reported on how bitcoin’s price rise is slowly bringing the Mt Gox bankruptcy closer to solvency. The former CEO of Mt Gox Mark Karpeles confirmed that the price was helping, but the Coinlab lawsuit was a significant deterrent. Now Karpeles has written an open letter to Coinlab’s founder Peter Vessenes asking him to settle the lawsuit for five million.

Also read: Xapo Forwards Miner Fees to Users After a Grueling Two Weeks of Backlog

 Mark Karpeles Openly Asks Coinlab to Drop the $75 Million Lawsuit

Mark Karpeles Open Letter to Coinlab Looks to Settle Lawsuit for $5M
Mark Karpeles former CEO of the defunct bitcoin exchange Mt Gox.

Lately, Mt Gox claimants have been focused on the words of Mark Karpeles, as he seems to be trying to help people reclaim their funds these days. Karpeles has been talking with Mt Gox claimants on Reddit and telling them bitcoin’s rising price may help the bankruptcy claims. However, because Coinlab is suing Mt Gox for $75 million the defunct trading platform’s customers may not see their money for a very long time.

The problem started when Mt. Gox and Coinlab announced they were forming a partnership where the Canadian company Coinlab would take over the exchange’s American customers. The deal never materialized because Coinlab says Mt Gox breached a contract clause. Furthermore, the trading platform was subsequently hacked and was followed by bankruptcy. Karpeles recent “Open letter to Peter Vessenes,” says now the lawsuit is impeding customers who don’t deserve to lose funds because of a bad business arrangement.       

“This lawsuit today is not CoinLab vs. MtGox, but CoinLab vs. the MtGox customers, now creditors, who have done nothing to deserve being involved in this,” explains Karpeles.

I am writing today in hope to convince you to agree to settle this lawsuit for the five million USD which you owe to Mt Gox since four years ago.

‘A Hope to Stop Hostilities and Accept the Situation’

Mark Karpeles Open Letter to Coinlab Looks to Settle Lawsuit for $5M
Peter Vessenes, Coinlab CEO.

Currently, the CoinLab vs. MtGox lawsuit has been transferred to Japan and documents are locked inside the Tokyo District Court. There have been many bitcoin enthusiasts who believe Coinlab’s lawsuit is unjust and seriously deterring Mt Gox claims over the course of over three years. There is even an organization called Goxdox II, that has a website filled with disturbing issues and leaked documents concerning the CoinLab vs. MtGox lawsuit.

Karpeles agrees the lawsuit is undeserving as he writes to Vessenes saying “maybe it’d be time to consider you have gone far enough and stop with this farce.” The former Mt Gox CEO says Coinlab should settle for the $5 million the company has owed the exchange for over four years.

What I am hoping for today is to see both sides stop hostilities and accept the situation. Your $75 million USD against Mt Gox and Tibanne is clearly without merit, Coinlab never suffered any losses and never even started providing the expected service, and Mt Gox will never see the $5 million USD Coinlab kept.

Former Mt Gox CEO Believes Bankruptcy Trustee Would Agree to the Settlement

Karpeles says he hopes Vessenes will see the post on the Mt Gox insolvency Reddit forum and “stop this while it still makes sense to do so.” He also details that he has no authority to authorize a settlement but believe the bankruptcy trustee would agree to the suggestion.

“Some creditors may argue this is way more than you deserve for having provided virtually nothing to Mt Gox, but at this point going further would only increase costs without any relief in sight, instead delaying further something that shouldn’t take that long,” explains Karpeles.

Whether or not Coinlab and the company’s CEO Peter Vessenes will respond remains to be seen. Allegedly the Coinlab executive wrote on Mt Gox insolvency forum that he was receiving a number of emails concerning the bankruptcy. In the forum post, Vessenes says the rumors that the CoinLab vs. MtGox lawsuit is impeding the bankruptcy is incorrect information. However, the Reddit comment has since been deleted, but a screenshot of the statement was captured.

What do you think about Mark Karpeles open letter to Peter Vessenes? Do you think Coinlab should settle with Mt Gox for $5 million? Do you think the lawsuit is impeding the bankruptcy claims? Let us know what you think in the comments below.


Images via Shutterstock and Pixabay.  


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Bitcoin’s Price Rise Brings Mt Gox Closer to Solvency

Mt GoxEveryone involved in the cryptocurrency space is watching the price of bitcoin very closely these past few weeks. One person watching the value of bitcoin rise is the former CEO of the now-defunct Mt Gox bitcoin exchange. Mark Karpeles says he’s “monitoring the situation” as the Mt Gox bankruptcy may seemingly become solvent thanks to

The post Bitcoin’s Price Rise Brings Mt Gox Closer to Solvency appeared first on Bitcoin News.

Mt Gox

Everyone involved in the cryptocurrency space is watching the price of bitcoin very closely these past few weeks. One person watching the value of bitcoin rise is the former CEO of the now-defunct Mt Gox bitcoin exchange. Mark Karpeles says he’s “monitoring the situation” as the Mt Gox bankruptcy may seemingly become solvent thanks to rising price of bitcoin.

Also Read: Bitcoin Network Hashrate Surpasses Four Exahash Per Second

Can the Mt Gox Bankruptcy Become Solvent?

Bitcoin's Price Rise Brings Mt Gox Closer to SolvencyLast week a post on the subreddit r/mtgoxinsolvency detailed that “Mt Gox reached around 78.5 percent of the claims value today.” The person also asked the former CEO what would happen if bitcoin’s price makes it to 100 percent of the claims value. Karpeles appeared on the Reddit thread detailing his interest concerning the current situation. The former Mt Gox executive says because Coinlab is suing the company it really makes the claims value around 59 percent. Coinlab, the venture-backed blockchain company, has sued Mt Gox for $75 million before the company went bankrupt.  

Karpeles is Monitoring the Situation

Bitcoin's Price Rise Brings Mt Gox Closer to Solvency“I am monitoring the situation,” explains Mark Karpeles. “We are still around 59.92% (74.29% if excluding CoinLab – but it can’t be excluded as the lawsuit is still in progress). Remember to use JPY values for calculation, since USD is bound to not be exact.”

Following this statement, bitcoin developer Lukejr asks Karpeles if there is a “real possibility Mt Gox can exit bankruptcy if it reaches 100%?”  

“Yep, but not to reopen as Mt Gox,” Karpeles replies. “The idea would be to establish some kind of trust to distribute BTC outside of the bankruptcy process, allowing for their easy distribution. The plan is to have recovered bitcoins distributed as is to BTC creditors, on the address they provided to receive the original payments.”

As things are right now, creditors cannot receive more than the approved claim amount (in JPY), which means that future recovered bitcoins would potentially be distributed to shareholders instead.

‘The Inability to Compete With Today’s Exchanges’

Many people discussing the subject on the forum were quite pleased with hearing Karpeles responses to questions. People further asked what the possibility was of Mt Gox re-opening and offering creditors a chance to become company shareholders as well as possibly cover the cost of some of the missing bitcoins.

“That is an alternative, but it would involve re-launching Mt Gox, which would probably not work for many reasons,” Karpeles explains. “Having a trust set up and distribution list kept for distribution of recovered assets is perfectly legal, has no running cost and be fair. Compliance cost in the US is way outside of Coinlab’s reach, and I’d be surprised to hear Coinlab was ever planning to be compliant.

Anyway, the largest reason why Mt Gox cannot be relaunched is the brand image, followed by the inability to compete with today’s exchanges.

100 Percent Value Must be Met Before Starting the Process  

The discussion seemed very positive for those who lost funds during the bitcoin exchange’s hack in 2013 which was followed by bankruptcy. Karpeles then goes on to explain that most of the process cannot begin until the 100 percent threshold is met. In regards to the Coinlab lawsuit Karpeles says someone can order documentation from the court to help with the process, but he can’t afford to do that at the moment.

In theory, anyone could do it, so if someone does I’ll be happy to host the files on dropbox or anything,” Karpeles adds.

What do you think about Mark’s statements about the bankruptcy becoming solvent? Let us know in the comments below.


Images via Pixabay, Mt Gox, and Forbes.  


At News.Bitcoin.com all comments containing links are automatically held up for moderation in the Disqus system. That means an editor has to take a look at the comment to approve it. This is due to the many, repetitive, spam and scam links people post under our articles. We do not censor any comment content based on politics or personal opinions. So, please be patient. Your comment will be published.

The post Bitcoin’s Price Rise Brings Mt Gox Closer to Solvency appeared first on Bitcoin News.