Kraken to help probe missing bitcoins in MtGox liquidation

Kraken will also help process and investigate customer claims against MtGox

Bitcoin exchange Kraken will help probe missing bitcoins as part of the liquidation of MtGox, once the world's largest trading place for the digital currency.

San Francisco-based Payward, which operates Kraken, will also assist in processing, investigating and paying out the claims of MtGox customers who lost bitcoins in the company's Feb. 28 collapse, bankruptcy trustee Nobuaki Kobayashi told a meeting of creditors in Tokyo on Wednesday.

The move was approved by the Tokyo District Court, which is overseeing the liquidation of MtGox. It comes amid Kobayashi's attempts to unravel the complex mess of what went wrong at the company and what happened to its assets.

"The bankruptcy trustee believes that it is very helpful for conducting the bankruptcy proceedings smoothly and for protecting the interests of the bankruptcy creditors to obtain support from a company with expertise in operating a bitcoin exchange business and managing bitcoin transactions," Kobayashi wrote.

Kraken, which opened its own exchange for bitcoin in Japan a few weeks ago, had been mooted as a candidate to take over MtGox, which went under saying that roughly 750,000 customer bitcoins and 100,000 of its own had vanished, apparently stolen by hackers. That amounted to roughly US$474 million based on the valuation of the volatile cryptocurrency at the time of the filing.

But the trustee made it clear that Kraken is not going to revive MtGox.

"The outcome of the MtGox bankruptcy proceedings will deeply affect the Bitcoin community as a whole," Kraken CEO Jesse Powell said. "We've decided to volunteer our resources and expertise in an attempt to minimize damage to creditors, restore faith in the Bitcoin community and demonstrate trusted leadership in the industry."

It's unclear if Kraken staff will be able to recover any lost bitcoins from MtGox. In March, the failed exchange said it had found 200,000 bitcoins, worth about $116 million at the time, in an old-format digital wallet.

During a recent interview with IDG News Service, former MtGox CEO Mark Karpeles said that finding any more coins was highly unlikely as the exchange's storage had been thoroughly scoured.

"I will be cooperating with the trustee and Kraken within the scope of the MtGox bankruptcy," Karpeles wrote in an email on Wednesday. He is still CEO of MtGox's parent company Tibanne.

In other disclosures related to MtGox, Kobayashi said the bankruptcy estate has secured about 202,149 bitcoins, worth roughly $74 million at the current bitcoin value of $369, as tracked by Coindesk.

Kobayashi also said he could consider taking legal action to force Karpeles to repay ¥136 million ($1.1 million) he had in loans from MtGox as of April 24. The trustee also said Tibanne and two of its subsidiaries owe MtGox about ¥1.1 billion ($10 million).

Karpeles said Tibanne is discussing the issue with Kobayashi but disagrees about its repayment amount, adding that the company had over 50,000 bitcoins on MtGox.

"This has been a huge loss for Tibanne and we are putting all our energy in our regular business in order to keep the company running, and should see profits appearing as soon as February, which would allow us to have a better stance on the issue," Karpeles wrote in an email.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags Internet-based applications and servicesMt. GoxPaywardinternet

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Tim Hornyak

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?