Why Did Mt. Gox Payouts Take So Long?

Reading Time: 2 minutes
  • The Mt. Gox payouts should start this month, eight and a half years after the exchange shuttered
  • There is a core reason why the resolution took this long – a company called Coinlab
  • Coinlab held out for a $16 billion settlement following an unresolved court case with the exchange

There is a good chance that the first Mt. Gox payouts could start making their way towards victims next month, eight years and a half years after the exchange closed its doors. With 200,000 BTC ready to be deployed since mid-2014, why did it take so long for the victims to get what they were owed? The answer is almost solely down to one man – Peter Vessenes.

Vessenes Nearly Bought Mt. Gox

Peter Vessenes is the co-founder of Coinlab, a Bitcoin exchange company that formed in 2011. Vessenes nearly bought Mt. Gox before Karpelès took over in February of that year, but when the deal was concluded, Vessenes emailed Karpelès to tell him that he was entitled to half the money that McCaleb had received from Karpelès, claiming a deal had been done.

In fact, no money had changed hands – there was instead a six month 50% profit share agreement in place, with McCaleb retaining a 12% share of Mt. Gox’s revenue.

Vessenes eventually desisted and Karpelès heard nothing more from him until 2012 when Coinlab offered its services in obtaining a U.S. licence for Mt. Gox, which was a requirement under U.S. law. According to Karpelès, Coinlab failed in its duty to obtain the right licensing, with the deal ending in acrimony as Coinlab sued Mt. Gox for $75 million in May 2013, citing a breach of contract.

Coinlab’s $16 Billion Claim

Mt. Gox collapsed before the case could get to court, leaving Coinlab as a creditor. Coinlab and Vessenes rejected every offer made by the bankruptcy administrator to resolve the dispute, causing years of delays for all the other creditors, including former customers.

When it finally did make a move in February 2019, it was to increase its claim from $75 million to an unfathomable $16 billion, with Vessenes claiming that the U.S. customers it would have onboarded had Mt. Gox honoured the agreement between the two would have netted it that much in revenue.

Vessenes Sees Sense

Coinlab held out on this ridiculous claim until in late 2021 Vessenes seemingly realised he wasn’t going to get that money after all, and agreed to take an undisclosed lower sum. This settlement opened the door to a final resolution which should see some victims finally getting their hands on some of that recovered bitcoin, over eight years after it was taken from them.

If it hadn’t been for Vessenes and his greed then Mt. Gox customers would have got their payouts years ago, but they can be thankful that they are getting them at last.