gox

Mt. Gox Creditors Neither Need nor Deserve This Kind of ‘Hero’

10/02/2019 by Idelto Editor

Brock Pierce has launched his own bid for the civil rehabilitation of Mt. Gox, promising to pay out all current funds to creditors while also talking about issuing debt tokens or giving away equity in a resurrected Mt. Gox exchange. As noble as this may sound on the surface, there are strong reasons to question the credibility and motives of this proposal.

Also read: Crypto Investor Brock Pierce Is Attempting to Pull Mt. Gox From the Ashes

Let’s Be Clear

First, Pierce is basing this plan on a fresh assertion that he is the rightful owner of Mt. Gox, as a result of plans to purchase Mt. Gox from Tibanne immediately after the collapse in 2014, as well as claiming to have later purchased Jed McCaleb’s 12% stake.

Let’s be clear here: Pierce does not own Mt. Gox.

There exists a signed Letter of Intent (LOI) dated March 2014 between Sunlot and Tibanne for a planned handover of Mt. Gox. Into this letter Sunlot inserted language about “binding terms”, but it is clearly just drawing up the framework for an agreement yet to be closed. As an obvious example, no purchase sum is specified.

Already Under Civil Rehabilitation

However, as Mt. Gox was already under civil rehabilitation at the time (and as the LOI states at the end next to “Court Approval”) no such agreement could be entered into without the court’s prior approval. Sunlot was sent a request to formally and mutually rescind the Letter of Intent in recognition of this overstep of authority in order to clear the way for restarted talks with the court’s blessing. He refused to sign it. Pierce is mischaracterizing this as Mark Karpeles backing out of a binding agreement, and seems to think that as long as he refuses to admit the truth, an alternate timeline where Sunlot closed the deal and legally acquired Mt. Gox will play out.

As for acquiring McCaleb’s 12% share, no matter what deal Pierce may have struck with him, no effort has been made to legally record any transfer of shares, and the Mt. Gox estate still recognizes McCaleb as the legal owner of those shares.

Pierce’s insistence on being the legitimate owner of Mt. Gox in the face of facts is already disqualifying. But he has further made it clear that he considers himself the rightful beneficiary of the “hundreds of millions of surplus assets” that were originally due to be paid out to Mt. Gox shareholders due to a cruel quirk of Japanese bankruptcy law. It is against this backdrop that he is offering to “gift” this money to creditors by promising to generously refrain from laying claim to it.

Veiled Threat

Let us be equally clear on this: the “surplus” assets have been specifically placed out of reach of any shareholders thanks to the dedicated push by creditors like the MtGoxLegal group to convert the liquidation to new civil rehabilitation proceedings. We already won that victory. For Pierce to even bring this up is nothing short of a veiled threat that he could try to lay claim to them should he change his mind.

And even if we take Pierce’s claim to Mt. Gox’s ownership as fact, why did he never lay claim to Mt. Gox’s assets during the four-years of liquidation proceedings? Pierce could have stepped in and saved creditors from a painful, hail-mary bid for civil rehabilitation. He didn’t. Instead, he waited until the victory was won before stepping on stage to claim a prize.

If Pierce truly only wants to give something to Mt. Gox victims while asking nothing in return, this would be very laudable indeed. But what we’re seeing here is just a media spectacle with promised gifts being conditional on us all first giving Pierce what he wants.

The spectacle should instead be focused on the creditors who fought like hell and wrote the trustee en masse, convincing him not to oppose civil rehab and setting a Japanese precedent in the process. The civil rehab file contains all those letters. I’ve seen them.

Mt. Gox creditors neither need nor deserve this kind of “hero.”

Do you think Brock Pierce’s claims are valid? Let us know in the comments section below.

Images courtesy of Shutterstock, Twitter

OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

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Bitfinex Partnered With at Least 6 Different Banks During 2018

29/01/2019 by Idelto Editor

22 months since Wells Fargo suspended the processing of withdrawals sent by four Taiwanese banks that service Bitfinex, the platform remains among the top 20 exchanges by adjusted volume. While Bitfinex hosted more than $5 billion in trade this past month, the exchange has struggled to establish reliable banking partners, with traders seeking to deposit fiat currency having been instructed to send funds via at least seven different banking institutions since the Wells Fargo suspension.

Also Read: Van Eck Associates CEO: Bitcoin Investors Will Add Gold This Year

Bitfinex Directs Customers to Deposit Funds With Polish Bank 7 Months After Wells Fargo Termination

During Nov. 2017, it was reported that Bitfinex customers were being directed to deposit fiat currency with Polish-based bank Spółdzielczy w Skierniewicach under the account of Panama-based company Crypto SP, an account that was also revealed to be shared with cryptocurrency exchange CEX. Crypto SP was also found to be owned by Crypto Capital, a company owned by Ivan Manual Molina Lee, an individual found to be a nominee director for a number of Panama-based companies.

During January 2018, it was reported that Bitfinex had been subpoenaed by the United States Commodity Futures Trading Commission (CFTC). The months following the news of the subpoena saw Bitfinex appear to cycle through banking partners in short succession, with traders being instructed to make fiat deposits with at least six different financial institutions between Feb. 2018 and Nov. 2018.

Bitfinex Customers Directed to Deposit Funds With at Least 6 Banks During 2018

At the start of Feb. 2018, a post on Reddit indicated that a Bitfinex customer had been directed to deposit funds with Portuguese-state owned banking institution Caixa Geral De Depositos via a company called Global Trade Solutions. One Redditor speculated that Global Trade Solutions may be linked to Crypto S.P and Crypto Capital.

On Feb. 14, 2018, Dutch media outlet Follow the Money reported that a spokesperson for ING had confirmed that Bitfinex held an account with the bank in the Netherlands. The news comprised the first announcement of a major financial institution since Wells Fargo suspended wires from Bitfinex almost one year prior.

Bitfinex Briefly Partners With Noble Bank

During May 2018, it was reported that Bitfinex had partnered with Puerto Rican financial institution, Noble Bank whose principal custodian was Bank of New York Mellon.

Three months later, a report published on Medium asserted that Brock Pierce, the founder of Tether, and John Betts, the founder of Noble Bank, had sought to acquire Mt. Gox together in 2014 via Sunlot Holdings’ Mtgox Rehabilitation Plan Proposal. After their bid was unsuccessful, both men would go on to found their respective companies later that year.

At the start of October 2018, it was reported that Noble International had been looking for a buyer for months, and had lost many of its customers including Bitfinex and Tether. A few days later, it was revealed that Bitfinex was directing customers to deposit fiat currency into an HSBC account held by Global Trading Solutions.

Later that month, reports also indicated that Bitfinex was banking with Hong Kong-based Bank of Communications via the private accounts of “Prosperity Revenue Merchandising Limited” for whom Citibank acts as an intermediary bank.

In November, Bitifinex announced another new banking partner, publishing a letter attributed to Bahamas Deltec Bank & Trust asserting that the company held $1.8 billion in its account as of Oct. 31.

Bitfinex’s Cayman-Based Bank Falsely Claims SEC Registration

During January 2019, it was revealed that Bitfinex was banking with Cayman Islands-based Sackville Bank & Trust Company. Sackville’s principal custodian bank is CIBC Mellon which is jointly owned by The Bank of New York Mellon and Canadian Imperial Bank of Commerce.

While discussing Wells Fargo’s suspension of wire transfers to and from Bitfinex, the exchange’s former chief strategy officer, Phil Potter, previously stated: “We’ve had banking hiccups in the past, we’ve always been able to route around it … open up new accounts … shift to a different entity, lots of cat and mouse tricks.”

What do you think of Bitfinex’s perpetual banking drama? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, Wikipedia

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Exchange News: Mt. Gox Trustee Extends Deadline, GBX Licensed in Gibraltar

24/11/2018 by Idelto Editor

In recent exchange news, the Mt. Gox trustee will seek to extend the deadline for rehabilitation claims. In other news, Gibraltar Stock exchange has become the first national stock exchange to operate a regulated virtual currency exchange, and Okex has denied accusations of market manipulation relating to its recent short-notice settlement of BCH futures contracts.

Also Read: Fisco Completes Takeover of Japanese Crypto Exchange Zaif

Mt. Gox Trustee Moves to Extend Rehabilitation Claims Deadline to Dec. 26

Nobuaki Kobayashi, the trustee of defunct cryptocurrency exchange Mt. Gox, will seek to request an extension on its deadline for the filing of civil rehabilitation claims.

In a recently published letter, the trustee stated that efforts will be made to “request the court to accept proofs of rehabilitation claims received by December 26, 2018.”

As such, the trustee also requests that Mt. Gox users and creditors file proof of rehabilitation claims by the proposed deadline.

Gibraltar Blockchain Exchanges Receives Regulatory Licensing

The Gibraltar Financial Services Commission has granted a Distributed Ledger Technology License to Gibraltar Blockchain Exchange (GBX). GBX announced that the licensing makes the Gibraltar Stock Exchange the first national stock exchange to own a regulated virtual currency exchange.

Nick Cowan, the chief executive officer of GBX, praised Gibraltar’s regulatory apparatus regarding cryptocurrencies, stating: “Gibraltar has found the right blend of sensible and supportive regulation, which has helped position the jurisdiction as a lodestar for the global cryptocurrency space, while allowing blockchain companies to flourish.”

The exchange was granted level three licensing, which is the highest offered by the regulator.

Okex Denies Contract Manipulation Accusations

Okex has denied accusations of market manipulation following the exchange’s decision to settle BCH contracts the day before the Bitcoin Cash hard fork with little notice given to investors.

Cryptocurrency market making firm Amber AI was among the traders burned by the decision, with the company posting an article on Medium asserting: “Over the past week we have seen behavior indicative of market manipulation by OKEx, and estimate $400m+ of futures contracts have been forced into liquidation as a result.”

In response to Amber AI’s accusations, Okex has stated: “Amber AI has done serious damage to Okex’s brand credibility by defaming the platform for manipulating the market without evidence. We will file a lawsuit against Amber AI and would like to present transaction data related to the BCH contracts to the court.”

Were you burned in the fallout of Mt. Gox? Share your experiences in the comments section below!

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The Number of Cryptocurrency Exchanges Has Exploded

12/04/2018 by Idelto Editor

In bitcoin’s earliest days, you could count the number of cryptocurrency exchanges on two hands: Mt Gox, Bitstamp, Btc-e, Vircurex and a handful of others, as well as P2P exchange Localbitcoins. Today, the landscape has changed dramatically. There are now over 500 exchanges to choose from – and that number is growing with every passing week.

Also read: Bittrex Exchange is Back! Annnnnnd It’s Gone Again

There Are Now More Than 500 Cryptocurrency Exchanges

Calculating the number of crypto exchanges in the world is a lot harder than it sounds. Coinmarketcap lists 208, and there are dozens more listed on other cryptocurrency tracking sites. In addition, there are hundreds of regional exchanges that are only accessible within certain countries and continents. Canada has Einstein Exchange. Africa has Golix. Australia has ACX and will soon have Nauticus, a multi-asset exchange that is launching this year. Blockbid has also just gained its Australian license.

None of these platforms features on exchange listing sites such as Coinmarketcap. Neither do major sites such as Coinbase, because it is technically a broker (although its volume is listed on sites like Bitcoinity.org), or P2P sites like Localbitcoins and Localethereum. And what about other forms of P2P exchange such as Radar Relay, Kyber Network, and platforms that operate on the deep web? It is extremely difficult to classify and quantify the number of global crypto exchanges. All that can be said for certain is it’s north of 500 and rising.

Choice Is Good – Up to a Point

Back when the bitcoin ecosystem was beholden to just one exchange – Mt Gox – there was a single point of failure that duly crashed the markets when Gox eventually broke. With hundreds of exchanges to choose from today, that shouldn’t be an issue, and yet a glance at where the bulk of the trading volume lies tells a different story. In the last 24 hours, more than half of all cryptocurrency trading volume came from just three exchanges, with Binance accounting for 18% alone. If the exchange were to be hacked or go offline, it wouldn’t cause a Mt Gox-level crash, but it would still inflict a sizeable dent.

It is the meteoric rise of Binance, which has gone from nothing to billion-dollar platform in the space of 12 months, that has inspired many of the next generation of token-backed exchanges like Coinlion and Legolas. Each of these new entrants has a slightly different slant, whether it’s knowledge-based trading, ICO launching or, in the case of Ezexchange, a focus on customer service that includes 24/7 support. It even offers the prospect of video tutorials and phone support for crypto investors who are still learning the ropes.

Oliver Isaacs is a cryptocurrency advisor and blockchain investor who’s worked with a number of new exchanges. He ventures: “Customer service/tech support is important [with new exchanges] and so is the speed with which cryptocurrency deposit and withdraw transactions are executed. Getting your coin onto and off of an exchange quickly is important, especially for an arbitrage trader.”

For so long as money keeps pouring into the crypto economy and the ICO sector remains vibrant, new exchanges will continue to proliferate. Should things go south, however, and a severe crypto winter set in, many exchanges could wind up as little more than ghost towns, with only the dominant players capable of maintaining liquidity and weathering the storm.

Do you welcome new exchanges or do you think there’s now enough to choose from? Let us know in the comments section below.

Images courtesy of Shutterstock, and Coinhills.com.

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