A rescue attempt
While creditors of the defunct Mt Gox bitcoin exchange wait for the Japanese courts to resolve the fate of their money, a Moscow-based law firm is proposing a different solution. According to Mt Gox creditors, ZP Legal contacted them earlier this year, offering an opportunity to recover almost a quarter of the missing , bitcoins stolen in the hack of the exchange.
In return for its assistance, the law firm will charge creditors 50 to 75 percent of the recovered sum, as well as an hourly rate. However, ZP Legal says it will only accept payment in the event of a successful recovery. In fact, this longstanding claim has been investigated by former Mt Gox user Kim Nilsson and alleged in an order by the U. District Court of the Northern District of California.
He added:. Zheleznikov said his firm reached out to lawyers representing the Mt Gox creditors, and later the creditors themselves, with the help of the Russian embassy in Tokyo.
The embassy did not respond to a request for comment. Andy Pag, the founder and former coordinator of the largest group of creditors, Mt. Gox Legal at the end of March. Zheleznikov refused to discuss the sum with CoinDesk but confirmed his firm worked with two people whose money was frozen at WEX. He refused to name either of the people involved in that deal. Speaking to CoinDesk, Zheleznikov said the amount is an estimate based on the number of creditors ZP hopes to take on as clients.
Zheleznikov stressed that his clients can expect to receive not bitcoins themselves but their fiat value now. In the document Pag shared with the creditors, ZP describes how the loss will be calculated.
A potential problem with this approach is that digital assets have no legal status in Russia at the moment, as in many other jurisdictions, and there is no clear methodology for valuing cryptocurrency.
Zheleznikov admits that his firm will be acting in the absence of settled practices. While not widely known in the Russian crypto space, Zheleznikov has a remarkable track record as an attorney for a number of cases making waves in Russia in recent years. Zheleznikov has also defended popular Russian journalist Anton Krasovsky and oligarch Konstantin Malofeev who is believed to be a sponsor of the separatist forces that confronted the Ukrainian army on the South East of Ukraine in The exchange suspended trading, filed for bankruptcy protection and began liquidation proceedings.
The exchange transitioned from bankruptcy proceedings to civil rehabilitation, a debtor-friendly form of corporate restructuring, last year, meaning creditors will receive bitcoin instead of a fiat sum. However, due to a large number of claims and other ongoing legal issues, it is unclear when these funds will be returned. The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.
CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. Local law enforcement is investigating Alexander Vinnik, the alleged operator of the defunct exchange BTC-e. Alexander Zheleznikov, Russian lawyer who offered Mt Gox creditors recovering funds from unnamed Russian nationals — courtesy of Alexander Zheleznikov. Read more about Disclosure Read More The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.
The early years of Bitcoin
Gox into insolvency. Gox goes offline amid turmoil". He wants to then relaunch it as a Gox or Mt. Bythe Tokyo-based Mt. Gox Status Update" Press release. Disclosure Read More The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Digital Money Digital money is any type of payment which exists purely in electronic form and is accounted for and transferred using computers. Gox auditor's compromised computer to transfer a large number of bitcoins illegally to. Subsequent investigations have shown that the massive hack of Mt.