Quick thoughts on Gox Rehab plan — important ramifications for all of the Bitcoin community

I am traveling and don’t have much time to write and this is complex, but here goes.

Summary:

I’ve spent the last several days speaking with bankruptcy lawyers, Japanese lawyers and other experts regarding Mt. Gox.

I’ve reviewed the plan and discussed it with it’s backers.

Two key items:

– it seems that the current trustee is not taking Bitcoin seriously as a real asset and is discounting the value of the Gox customers — as we can see from the profoundly poor communication regarding the investigation, the retaining of Mark K at the helm and as lead investigator into what happened to the coins (a massive conflict of interest) the trustee has not acted in the ideal manner so far — it seems likely that unless action is taken that the remaining 200,000 customer coins will be liquidated and probably never return to the hands of original holders — ALSO, there will be no one with standing nor access to the records and customers will never know what happened to the lost/stolen coins

– at this point I believe the SaveGox plan may be the best option for customers, for Gox, for Bitcoin in general — it’s not ideal – there are things which I think could be improved on and I’ll offer my help to the team– but this is all we’ve got folks, this is, in my opinion, the one and only option for customers to see recovery of the 200,000 (25% or so) of assets as well as the best chance to track what happened to the other lost/ stolen coins

In a perfect world the trustee would have separated customer assets and corporate assets and the 200,000 coins would already be returned AND the trustee would have properly and throughly investigated the theft (one of the largest in human history) rather than simply relying on an interview with Mark and a cursory local police review.

I’ve spoken with four different bankruptcy attorneys — there is absolutely no doubt that customer assets belong to customers. Some seem to argue this and if I have time I’ll provide exact quotes and legal info, cases and law info from these lawyers in an article. In everything from banks and brokerages to parking lots, apartments and pawn shops customer assets are recognized as being separate from corporate assets. Bankruptcy does not magically cancel customer rights and shift everything to a company.

Whether the trustee recognizes this other not, the SaveGox team does and has committed that they will 1) return the 200,000 coins and 2) immediately launch a full investigation into the remaining lost coins and provide open communication and transparency to the community. For these two reasons and the fact that there is simply no better option, I support them.

Time is of the essence and this precedent will have impact on everyone.

Next things we are working on:

I’ll write a letter to the trustee making a case for this, you can do the same

We are discussing the matter with other members of the Bitcoin Association and other groups to figure out how we can help

We may send Greg Simon, our Director of Outreach to Japan to try to convince the trustee that this makes sense — you may have seen Greg speak, he’s perfect at this type of thing — he also happens to speak Japanese fluently and was Head of Sales at JP Morgan Japan so knows the country and culture. (Donations toward airfare would be helpful, let me know if you can help and I’ll give details of it looks like he’s going)

I may join Greg if it will help.

We will keep talking to the tams of various proposal groups and others. It’s really key that the customers have the best chance of having the 200,000 remaining coins returned as well as getting clarity on what happened.

Bruce

EDIT:   This is separate from the internal reorganization which was denied by the court.  At the time of this writing I had not had time to thoroughly review the OKCoin plan – I am not partial to one plan, just that customer coins be returned to customers.