Fortress Financial Group Increases Buyout Offer for Mt. Gox Claims

Fortress Financial Group Increases Buyout Offer for Mt. Gox Claims

The group has offered more to purchase claims from creditors who lost money from the infamous $480 million hack

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Fortress Investment Group has increased its offer to purchase claims from creditors who lost money in the infamous $480 million Mt. Gox hack. The group, which aims to profit by eventually recovering the Bitcoin (BTC), upped its offer on the cryptocurrency to 88% of the estimated account value.

Cointelegraph has reported previously how Fortress calculated offers to creditors. The latest offer of $1300 is significantly higher than the $755 offered in December due to the recent increase in Bitcoin’s value.

However, the offer is still discounted “due to the likely timeline (3 to 5 years) and financial risk of the ongoing litigations,” according to Michael Hourigan, a managing director at Fortress.

How did this happen to such a powerful crypto exchange like Mt. Gox?

The crypto exchange went bankrupt in 2014 after investors collectively lost 850,000 Bitcoin, or roughly 7% of the total existing supply at the time. CEO Mark Karpeles was charged with embezzlement and falsifying data, but — remarkably — received a rare not-guilty verdict in the Japanese court for the more serious charges. 

Mt. Gox is no longer in bankruptcy, partly as a result of this verdict, which has given creditors the opportunity to reclaim some of their losses. As of October 2019, Mt. Gox has reported that 56 people have filed such petitions in the Tokyo District Court.


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The group has offered more to purchase claims from creditors who lost money from the infamous $480 million hack

Fortress Investment Group Renews Bid to Buy Mt. Gox Creditors’ Claims

Fortress Investment Group Renews Bid to Buy Mt. Gox Creditors’ Claims

Private equity and hedge fund manager Fortress Investment Group is redoubling its efforts to buy up claims from creditors of the hacked Bitcoin exchange Mt. Gox

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In the countdown to the new year, private equity and hedge fund manager Fortress Investment  Group is redoubling its efforts to buy up Bitcoin (BTC) claims from Mt. Gox creditors.

A Bloomberg report on Dec. 19 alleged that Fortress’s offer is now roughly 13.5% lower than an initial bid it extended to creditors earlier this year — down to $778 per Bitcoin claim as opposed to a former $900. Creditors have until Dec. 31 to decide whether to accept the firm’s proposal.

A drawn-out process

As Cointelegraph has previously reported, roughly 24,000 creditors are thought to have been affected by Bitcoin exchange Mt. Gox’s 2011 hack and later collapse in early 2014, which resulted in the loss of 850,000 BTC valued at roughly $460 million at the time.

Reimbursement of the exchange’s creditors is being handled under the stewardship of Tokyo attorney Nobuaki Kobayashi, who was appointed by a Japanese court to act as the civil rehabilitation trustee to manage Mt. Gox’s bankruptcy estate.

This compensation process — notwithstanding positive indications from Kobayashi earlier this year — has proved to be protracted and thus far open-ended, galvanizing creditors and other community members to self-organize in an attempt to quicken the process.

As evidence of Fortress’s renewed intentions to buy back creditors’ claims, Bloomberg says it has obtained a one-page proposal from the firm, via a source who was not authorized to officially speak on the matter. 

The document allegedly argues that two ongoing lawsuits being pursued against the Mt. Gox Estate “threaten to delay and dilute distributions” of creditors’ claims. 

Fortress has reportedly claimed that 1–2 years are expected to elapse before an initial ruling from a judge is delivered, adding, “Both litigants would then have an option to appeal, which could take an additional 2-3 years.”

To calculate its buyback offer, Fortress has allegedly multiplied the number of Bitcoins lost by each creditor by 15% (the amount currently available for reimbursement of the lost funds) and multiplied it by the current price of Bitcoin. In its letter, the firm pledged to make the payment within three days of any given claim transfer.

Dither and delay

Bitcoin was trading at roughly $10,900 at the time of Fortress’ initial offer this summer of $900 per claim. As of the time of writing, Bitcoin is trading close to $7,200.

This April, Andy Pag — the founder and coordinator of the largest group of Mt. Gox creditors, Mt. Gox Legal — revealed he had quit his post and decided to sell his claim for an instant payout from a buyer offering $600. 

He noted at the time that he expected reimbursement to be likely to take a further 18–24 months or longer, pointing, like Fortress, to the delay incurred by outstanding lawsuits against the former exchange.


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Private equity and hedge fund manager Fortress Investment Group is redoubling its efforts to buy up claims from creditors of the hacked Bitcoin exchange Mt. Gox

Report: Fortress Offers to Buy Mt. Gox Bitcoin Claims at $900 a Piece

Report: Fortress Offers to Buy Mt. Gox Bitcoin Claims at $900 a Piece

Fortress Investment Group is reportedly buying Mt. Gox creditors’ bitcoin claims at $900 each

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Fortress Investment Group is buying bitcoin (BTC) claims from Mt. Gox creditors, according to a report by CoinDesk on July 8.

The Japan-based cryptocurrency exchange Mt. Gox filed for bankruptcy in 2014 after losing $473 million worth of bitcoin at the time due to an apparent hack. Bitcoin reportedly experienced a subsequent decline in value, dropping by 36% over the month when this took place.

As per the report, Fortress executive Michael Hourigan has sent out a letter to creditors detailing the buyback offer. According an apparent copy of such a letter, Fortress has offered to buy the bitcoin claims back at approximately double the bankruptcy value.

The value of the claims at the time Mt. Gox was declared insolvent was reportedly $451, while Hourigan says Fortress can offer $900 per coin. 

The letter also notes that the purchase could be made in bitcoin or fiat money, and that the offer stands until July 31.

As Cointelegraph reported in April, Mt. Gox creditors may have claims for their lost bitcoins being automatically filed on their behalf. A Reddit user named DerEwige circulated an unverified screenshot of an email, which says:

“The creditors who objected to your self-approved rehabilitation claim withdrew their objections. As a result, the approval of your self-approved rehabilitation claim has become effective, and you no longer need to file an application for claim assessment.”

DerEwige interpreted this to mean that Mt. Gox users that did not file a rehabilitation claim after losing their crypto have had a claim automatically filed on their behalf, which has now been approved.


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Fortress Investment Group is reportedly buying Mt. Gox creditors’ bitcoin claims at $900 each