A significant part of the cryptocurrency community has wondered where the missing funds of the now defunct exchange Mt. Gox went, after the exchange closed down.
However, now leaked documents released by the notorious Goxdox blog returned after a hiatus of 5 years to tell people about ‘the details no one wants you to know.’ According to the blog, the trustee of the exchange went back on his claims that he and the company was not planning to sell the cryptocurrencies they had accumulated. An earlier report by News.Bitcoin quoted the trustee, Nobuaki Kobayashi as saying, “that he consulted cryptocurrency experts” during the BTC/BCH sales and did not employ the traditional way of using a digital assets exchange.
At the time, Jesse Powell, the Chief Executive Officer (CEO) of Kraken had advised Mt. Gox against selling funds. His advice has been to not sell coins, and if at all the coins needed to be sold, Mt. Gox could have opted for a private auction which the former would have facilitated.
The blogpost said, “Instead of taking Kraken’s advice, the trustee decided to (1) sell, (2) not tell us how he sold, and (3) hire a different so-called “cryptocurrency expert” to sell the BTC/BCH.”
As earlier reported by Crypto-News India, we had said that Kobayashi had liquidated another batch of $230 million worth of Bitcoin and Bitcoin Cash. The sales were made during the period between March 2018 and commencement of Civil Rehabilitation Proceedings, and secured a certain amount of funds for the bankruptcy estate.
There was never an auction, which means the coins were sold OTC or through trading on an order book (or both). Redditors pointed out that the trustee’s withdrawal of BTC from the MtGox estate’s wallets correlate to Jan/Feb drops in BTC’s price. The trustee has noted that a simple withdrawal from a wallet does not indicate when the BTC was sold. He is correct. We will need to look to other sources to draw a conclusion. Fortunately, recently uncovered documents from inside Tokyo District Court provide clues, the post noted.
Coming to the main question: Where did the coins go?
It is Bitpoint. The post stated that GoxDox was in possession of the trustee’s bank book, posted in full at the footer. BitPoint in Japanese is ビットポイント . The post added, “Unless BitPoint was being really generous, we’d wager the reason they are depositing billions JPY into the trustee’s bank account is because they were hired to sell the MtGox Estate’s BTC/BCH.”
There were several entries that were made between February 2014-May 2014 that showed enormous chunks of money being transferred between the two exchanges.
Feb 23: ¥3,000,000,000
Feb 26: ¥3,000,000,000
Feb 27: ¥2,370,878,752
May 1: ¥2,074,573,441
May 2: ¥3,822,436,400
May 8: ¥2,018,983,200
May 9: ¥1,876,736,900
May 10: ¥1,425,426,900
May 11: ¥1,299,609,200
May 14: ¥1,191,897,600
May 15: ¥914,011,300
May 16: ¥2,121,400,000
May 17: ¥611,200,600
May 18: ¥612,979,800
May 22: ¥2,421,427,600
May 24: ¥293,916,800
May 25: ¥283,787,300
May 28: ¥361,376,400
May 28: ¥630,005,900
May 29: ¥155,312,200
May 30: ¥117,613,200
May 31: ¥1,435,361,120
June 1: ¥321,246,000
June 4: ¥378,456,800
June 4: ¥1,607,943,691
These deposits added an additional ¥34,346,581,104 JPY to the opening balance.
While there is no data available before February 2014, there is proof shown that n the last week of February the trustee received ¥8.3 billion JPY from BitPoint. This represents a fraction of the almost ¥43 billion JPY the trustee was reported to have received from sales of BTC/BCH in his March 7 report.
The post believes that all this movement of money due to buying and selling of BTC/BCH led to the price fall for a few months that year.
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