Why we ALL need to talk about Mt.Gox

The unprecedented global propaganda war being waged by the media, bankers, politicians and academics is designed to smash down the price of Bitcoin and alt coins. Why is this?

It is very clear from the comments of central bankers, academics and politicians that they see cryptos as a threat to their current economic system. One which is failing over 90% of the global population. Living standards for the majority have not improved during this anaemic economic recovery. At the same time we have all witnessed a wealth transfer of historic proportions from the 99% to the 1% since the crash of 2008.

In a recent research paper issued by the U.S. Federal Bank of St. Louis it's authors admitted that the current fiat monetary system is prone to collapse, lacks any intrinsic value and that,'' … Bitcoin protocol is more robust than many of the existing fiat currency protocols.'' Quite an admission.

Divisions of the ruling class across the world see that their economic system is in trouble. The limited economic growth of the last decade has been built on a gigantic pumping up of debt and credit. Global debt has increased from $149 trillion in 2008 to $233 trillion by the end of 2017! The less moronic stooges of the capitalist class see dangers ahead: massive wealth disparities; the unpayable debt burdens of countries, corporations and consumers; and the sheer inability of ordinary people to load up on any more debt for consuming. And now Bitcoin.

In such a sickly economy the ruling elite cannot tolerate crypto currencies. It is a threat to their ability to print money out of thin air by a decentralized system which enables ordinary people to make transactions without the intervention of governments and banks. Hence the deliberate and coordinated attack upon Bitcoin and crypto over the last few months.

Part of this coordinated attack has been the activities of the bankruptcy trustee for the now defunct Mt.Gox exchange. In 7 March report to the Mt.Gox bankruptcy court it came to light that the bankruptcy trustee has sold 35,000 Bitcoins and 34,000 Bitcoin Cash worth around $410 million. He claimed that he tried to sell the coins in a way that got the creditors, i.e. those of us who had our Bitcoins stolen back in 2014, as high a price as possible.

This is a lie and has been exposed as such by many in the crypto community. On the chart below you can exactly when the trustee sold the bitcoins and the effect upon its price. Was it a pure coincidence that Bitcoin's price went down after each dumping of coins on to the market?

Source : reddit, riverflop

The trustee used the Kraken exchange who apparently warned him of the negative effects of this action upon the price of Bitcoin. Kraken also pointed out that this was not in the best interests of the creditors and suggested other means of selling the coins. Despite these warnings, the trustee went ahead and dumped huge amounts of Bitcoin which helped depress the price on each occasion. Where is the investigation into this flagrant price manipulation?

Why we all need to talk about it is the fact that the bankruptcy trustee controls 166,344 Bitcoin (btc) and 168,177 Bitcoin Cash (bcc). This raises a number of important questions, amongst them:

What is going to happen to these coins?
Will they be dumped in big batches on to the market?
Will they be returned to the creditors?
Will they be given to the owners of Mt.Gox?
How will creditors be compensated: in Bitcoin or in fiat money?

Only time will give us the answers to these questions. Their outcome could affect us all. If the trustee decides to dump large batches of btc and bcc on to the market then be prepared for further huge slides in the prices of all alt coins not just Bitcoin.

There is some cause for hope in the form of the legal action being taken by the Mt.Gox Creditors Group. They are pressing the trustee and court for the bankruptcy proceedings to be converted into civil rehabilitation proceedings. The trustee has said he does not oppose this measure and it is up to the bankruptcy court to decide this issue.

If civil rehabilitation is granted by the bankruptcy court then the thousands of creditors would get both Bitcoin and Bitcoin Cash in compensation along with cash from the previous sales. This is the best scenario both for creditors and the wider crypto community. The remaining btc and bcc would no longer be held over our heads like a sword of Damocles threatening further damage to the crypto markets.

We just have to wait for the bankruptcy court to make a decision on this. Get comfortable as it could be a long wait.

Addendum

There is one nugget tucked away in the trustee's report that might give us all some cold comfort. The trustee mentions the further attempts to recover Bitcoin and funds from Mt.Gox and several affiliated companies. Besides this, he mentions the prosecution of Mt.Gox CEO Mark Karpeles and the arrest of one of the suspected hackers who stole 850,000 Bitcoins in 2013:

''On July 26, 2017, the U.S. Department of Justice announced that Alexander Vinnik, manager of a cryptocurrency exchange, was arrested and indicted for involvement in money laundering of more than 4 billion dollars. The allegations in the indictment include the fact that he obtained funds by hacking MtGox. I have contacted the U.S. Department of Justice through a U.S. law firm and have made a request for information.''

Let us hope that more of the hackers come to justice and that the bankruptcy court grants the petition for civil rehabilitation proceedings.

If you are one of the creditors who had Bitcoin stolen then you might consider joining one of the following groups:

Mt.Gox Legal – A Group For MT.Gox Bitcoin Creditors

https://www.mtgoxlegal.com/about/

Mt.Gox Legal Google Group

https://groups.google.com/forum/#!forum/mtgox-creditors

mtgoxinsolvency group on reddit

https://www.reddit.com/r/mtgoxinsolvency/

Sources:

https://www.mtgox.com/img/pdf/20180307_report.pdf

https://mtgox-creditors.com/

https://financefeeds.com/mtgoxs-trustee-adds-jpy-42-96-billion-account-balance-bankruptcy-estate/

https://www.coindesk.com/mt-gox-trustee-sells-400-million-bitcoin-bitcoin-cash/

https://cointelegraph.com/news/effects-of-mt-gox-trustees-400-mln-sale-on-bitcoin-market