Mt. Gox Files for Bankruptcy Protection
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Mt. Gox Files for Bankruptcy Protection
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Re: Mt. Gox Files for Bankruptcy Protection
#2what happens to the BTC in their wallets that they didn't lose? Liquidated to pay creditors 1c in the dollar?
with 63 million in debt, I imagine customers aren't first class debt holders either?
Re: Mt. Gox Files for Bankruptcy Protection
#3>One Japanese small-business owner that accepts bitcoin as payment said Japanese banks had expressed skepticism toward the payment method, and that the business's lenders this week asked that the company wouldn't use bitcoin in the wake of Mt. Gox's stopping all transactions on Tuesday. "They're approaching bitcoin very conservatively," the owner said.
I don't think that the demise of mtgox will destroy the ecosystem. However, I suspect this will be a major setback in mainstream adoption as a method of payment. Bitcoin speculation (and difficulty of shorting) may very well prop up the price for the foreseeable future, but... so what? The interesting thing about the Bitcoin saga is seeing it work its way into mainstream.
I'd be happy to be proven wrong, though.
Re: Mt. Gox Files for Bankruptcy Protection
#4what happens to the BTC in their wallets that they didn't lose? Liquidated to pay creditors 1c in the dollar? with 63 million in debt, I imagine customers aren't first class debt holders either?
> 63 million in debt
it is still not clear if it is 63 million + 750k BTC in debt, or in total. If in total it is not clear how btc are valued.
Re: Mt. Gox Files for Bankruptcy Protection
#5>The company's lawyer also said at a news conference at the Tokyo District Court that Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million) with assets worth ¥3.84 billion.
This implies a debt ratio of 170%. Assume: (1) no outside debt (only customer deposits) and (2) only 100% liquid assets (only currency). Even in that case, a depositor would recover no more than 59 cents to the dollar (the maximum recovery rate).
Fifty-nine cents is clearly rose-tinted. Assets include office leases, computers, and other things not easily liquidated at book value. And outside debt is senior to deposits. That is the bite of being unregulated (deposits are at the top of regulated banks' capital structures). After factoring in the cost of chasing bankruptcy claims in Japan I do not see depositors recovering a penny.
Re: Mt. Gox Files for Bankruptcy Protection
#6> The company's lawyer also said at a news conference at the Tokyo District Court that Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million) with assets worth ¥3.84 billion. This implies a debt ratio of 170%. Assume: (1) no outside debt (only customer deposits) and (2) only 100% liquid assets (only currency). Even in that case, a depositor would recover no more than 59 cents to the dollar (the maximum re…
> a depositor could expect to recover no more than fifty-nine cents to the dollar
59% is a wet-dream scenario. Apparently they are trying really hard to value the lost 750K BTC at the closing MtGox price which was around $100. And Bitcoin is actually $566 now. It looks more and more that if anyone gets anything at all it will be under 10 cents to the dollar.
Re: Mt. Gox Files for Bankruptcy Protection
#7> The company's lawyer also said at a news conference at the Tokyo District Court that Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million) with assets worth ¥3.84 billion. This implies a debt ratio of 170%. Assume: (1) no outside debt (only customer deposits) and (2) only 100% liquid assets (only currency). Even in that case, a depositor would recover no more than 59 cents to the dollar (the maximum re…
> a depositor could expect to recover no more than fifty-nine cents to the dollar 59% is a wet-dream scenario. Apparently they are trying really hard to value the lost 750K BTC at the closing MtGox price which was around $100. And Bitcoin is actually $566 now. It looks more and more that if anyone gets anything at all it will be under 10 cents to the dollar.
>Apparently they are trying really hard to value the lost 750K BTC at the closing MtGox price which was around $100.
Comical. The equivalent of a shipper, having sunk its cargo, claiming the damages it owes are diminished by the cargo being worth less for having dropped to the sea floor.
Re: Mt. Gox Files for Bankruptcy Protection
#8>One Japanese small-business owner that accepts bitcoin as payment said Japanese banks had expressed skepticism toward the payment method, and that the business's lenders this week asked that the company wouldn't use bitcoin in the wake of Mt. Gox's stopping all transactions on Tuesday. "They're approaching bitcoin very conservatively," the owner said. I don't think that the demise of mtgox will destroy the ecosystem…
And is this because it will make you rich with your bitcoin stash, or because somehow "Society Needs This" and you'll just happen to get rich while being so magnanimous. It's a new paradigm, I know.
Re: Mt. Gox Files for Bankruptcy Protection
#9It's easy to be angry at them and/or see how stupid they were about accounting, security, etc.
But I guess on the other hand we do have to realize they are victims of massive theft, as far as we know this massive loss was not due to their own profiteering or internal theft, it was an organized outside force targeting them.
It occurs to me it is like blaming someone for getting mugged, although they were stupid enough to walk down a really bad street at a bad time of night with their cash out in their hands, it did take a criminal to make the crime happen, not the victim.
Re: Mt. Gox Files for Bankruptcy Protection
#10what happens to the BTC in their wallets that they didn't lose? Liquidated to pay creditors 1c in the dollar? with 63 million in debt, I imagine customers aren't first class debt holders either?
> 63 million in debt it is still not clear if it is 63 million + 750k BTC in debt, or in total. If in total it is not clear how btc are valued.
Zero. Bitcoins are worthless.