Mt. Gox ICO? Kerpeles Causes Outrage at Supposed Plan
In the world of Bitcoin, one of the most contentious figures is Mark Kerpeles.
As the ex CEO of the Mt Gox Bitcoin exchange, Kerpeles oversaw one of the biggest hacks and exchange collapses in the short history of cryptocurrencies.
One of the results of the Mt Gox debacle was that investors lost about 850,000 Bitcoin for all of the traders that have left their coins on the exchange.
The bankruptcy of the exchange led to the Japanese authorities stepping in and instituting an investigation into Mt Gox. They also investigated the CEO, Mark Kerpeles and promised to compensate users for at least 202,000 Bitcoin.
However, what was meant to make the investors whole, has been anything but.
Yen Value of BTC in 2013
When Mt. Gox went bankrupt, the price of Bitcoin fall quite considerably. The people who lost coins on the exchange were to be made whole in the price of Bitcoin at the time of the Mt. Gox collapse.
This was a Yen amount that was many multiples below the current price of Bitcoin. What this implies is that once Karpeles has paid the investors the Yen value of these coins, he will be entitled to the remaining coins and could become a billionaire.
If having being responsible for the collapse of Mt. Gox and possibly profiting to the tune of a $1bn was not angering enough, Kerpeles now has plans to initiate his very own ICO.
Invest in Mt Gox v 2.0
Kerpeles made his intentions known on a blog post of his. He completely dismissed any claims that creditors may have to any Bitcoin and claimed that he would pay out the minimum according to the bankruptcy requirements.
Indeed, the assets held by Mt. Gox when it entered liquidation bankruptcy included some 202,000 BTC, which now have a worth at today’s rate much higher than the sum of all non-erroneous claims filed against Mt. Gox
He then introduced the notion that he could conduct the ICO to revive Mt. Gox. The target of his raise would be a punchy $245m. This appears to also be quite a stretch as the world's largest exchange, Coinbase, only raised $100m in its most recent round.
Fool me Once, Shame on You...
The ICO is so galling for a number of reasons.
Firstly, there is the notion that someone would want to raise other people's money when they were about to get a $1bn windfall at the expense of Mt Gox investors.
Similarly, even if it was not Kerpeles, why would they think that they should raise almost 3 times the amount that the current largest Bitcoin exchange has through its sophisticated venture capital funding.
Lastly, it shows a lack of understanding from Kerpeles around the rationale for an ERC token ICO. The ERC standard was created such that developers and projects that will initiate cryptoucurrency tokens that will benefit the market.
The way in which Kerpeles is promoting this ICO, it looks more like a cash grab scheme than a genuine blockchain startup. Even if Kerpeles were to issue some "Gox Coin", there would be no need for it.
All of the top exchanges in the world operate quite effectively without the need for their own token or coin. Indeed, this was something that Kerpeles himself was able to recognise as he said that his lawyers informed him of the difficulty of raising an ICO.
...Fool me Twice, Shame on Me
Whether there would be any investors that would trade on an exchange run by Kerpeles, let alone invest in one, is incredibly unlikely.
Not only has Kerpeles demonstrated that he does not have the competence to run an exchange effectively, he has also shown his lack of good faith.
There are thousands of early Bitcoin investors that have lost more than $7bn in BTC through Mt Gox. Receiving their pay out in Yen instead of BTC while legal is highly unethical.
Who knows how the story will play out but what is certain is that we will be hearing much more of Mark Kerpeles.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.