Despite the Mt. Gox bankruptcy incident being nearly five years old, the resulting controversies are still being felt in the crypto world as more details continue to surface.
In the most recent data leak, bank details show that Mt. Gox trustee Nobuaki Kobayashi reportedly received more than $312 million worth of Bitcoin (BTC) and Bitcoin Cash (BCH) via BitPoint, a Japanese-based crypto exchange.
A website supporting Mt. Gox’s out-of-pocket creditors known as GoxDox revealed the information in the form of leaked bank details whose transactions, aside from showing cash injections from BitPoint, correlate with drops in Bitcoin market value throughout early 2018.
Kobayashi is thought to have withdrawn cryptocurrency worth millions of dollars in efforts to repay creditors.
This large scale selling of assets by the trustee referred to by GoxDox as “The Dumpening” is now under scrutiny for its role in last year’s Bitcoin crash.
The trustee’s bank book, reportedly used in the ongoing legal proceedings of Mt. Gox exchange at the Tokyo District Court, reveals that approximately 34.4 billion yen was withdrawn.
GoxDox argues that BitPoint is depositing billions of JPY into the trustee’s account because they were hired to sell the Mt. Gox estate’s funds.
Before utilizing BitPoint, the trustee approached the Kraken CEO Jesse Powell for advice on how to go about selling large volumes of coins.
Powell advised the trustee firstly not to sell coins, but if necessary to either sell via Over the Counter (OTC) sales or as an auction (facilitated by Kraken) to avoid any possible risks of disrupting the market price.
In response, it appears that Kobayashi resolved not only to sell but also to not inform Kraken as to how he made the sales, hiring a different cryptocurrency expert to facilitate.
Despite Powell’s offer to either facilitate an auction or an OTC in order mitigate market effects, Kobayashi chose to go with BitPoint, a relatively small Japanese exchange.
This is a decision that has left some commentators questioning why it was picked to handle such a significant Bitcoin sale over numerous more established exchanges like Kraken.
Though his reasons aren’t yet known, GoxDox speculates that the frequency of wires (22 between May and June 2018) from BitPoint to Kobayashi’s accounts were in part an attempt to limit exposure to potential hacks at BitPoint.
GoxDox concludes that creditors should demand transparency from BitPoint on their selling methods and Kobayashi should justify his decision to ignore Powell’s advice.
This is not the first time that Mt. Gox has made headlines this month.
In fact, on Feb. 3, CryptoGlobe reported that a former Mt. Gox partner, CoinLab, had increased a lawsuit against Mt. Gox from an initial $75 million lawsuit to a staggering $16 billion.
With time, the effects of the Mt. Gox incident are expected to continue facing the entire crypto community as more clues and pieces to the puzzle unfold. Mt. Gox was among the numerous reasons that cryptocurrency exchanges generally initially came under massive scrutiny. Now, it appears to be behind 2018’s dramatic fall in value as well.