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 newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags internetInternet-based applications and servicesMt. GoxPayward

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 Articles

Resources

PCW Evaluation Team

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?