An Investment fund called Fortress Investment Group LLC with nearly 40 billion dollars of assets under management recently contacted those impacted by the Mt.Gox Bitcoin exchange hack in regard to purchasing creditors claims. Fortress Investment Group was founded in 1998 and manages over 1,500 private and institutional clients. With over 200 employees Fortress traditionally focuses on real estate and private equity, they have presented a somewhat recent interest in cryptocurrency.
Fortress Investment Group LLC reported in 2013 that they were going to launch a cryptocurrency fund and disclosed a purchase of 20 million bitcoin. This was a very unpopular move in terms of regulation in the United States at the time because many firms had not officially moved into the cryptocurrency space at all. The only other major fund at the time that had started to aggressively invest in cryptocurrencies is Pantera Capital, and they had to fill out an unprecedented amount of paperwork with the SEC. The precedent set by Pantera Capital was beneficial for the Fortress Investment Group LLC as there were guidelines to follow in terms of institutional Bitcoin investment.
Moving forward, letters were shared with coin desk from Mt.Gox victims disclosing information about the potential payment that the Fortress Investment Group has offered. In 2014, Mt.Gox was an exchange that accounted for over 70% of all Bitcoin transactions and was the world’s leading Bitcoin exchange. In February 2014 Mt.Gox suspended trading and eventually filed for bankruptcy claiming that they lost roughly 850,000 bitcoin. Since the initial declaration of bankruptcy, 200,000 bitcoin have been found but in total over $450 million dollars was lost at 2014 prices. Recently in March of 2014, Mt. Gox CEO Mark Karpeles was found guilty for inflating and falsifying Mt. Gox holdings by roughly $33 million in the Tokyo District Court. If Karpeles commits any additional offenses in the next four years, he will go to prison for 30 months.
In a letter shared with CoinDesk, Fortress writes that “We review each claim individually but are now generally able to offer $900 per BTC claim, or roughly 200% of the bankruptcy value (which was $451 per BTC claim). We can pay that in Bitcoin, or any fiat currency of your choice. Our payment would be made within 10 business days of the claim transfer confirmation.” With the current bitcoin prices well over $10,000 per coin, this offer is likely disappointing for the Mt. Gox victims but it is some progress in the right direction. Exchange hacks like the Mt.Gox hack and the recent Cryptopia, and Binance hacks are a great reminder to understand the importance of holding your coins in a personal storage device, such as a paper or hardware wallet.
While the offer of $900 is low, it is some relief for those negatively impacted by the Mt. Gox exchange hack. The Mt.Gox bankruptcy and court proceedings have been ongoing since 2014 and still prove to be a sticky situation for many members of the cryptocurrency community. Out of the many investors and traders impacted by Mt.Gox, it is likely that some of them are still actively trading in the cryptocurrency markets and undoubtedly have a large amount of experience compared to others joining in 2017 and so on. A piece of advice that I personally always hear from these individuals is the importance of only using the exchanges to complete a task, and then pulling your coins off to hold on to them in a safe and secure manner. As previously mentioned, safe methods of storage consist of paper and hardware wallets where you have the wallet backed up and you know your own private keys.
About The Dragon
“The Dragon” is a technical analyst and writer who discovered bitcoin back in 2016. Intrigued with the technical aspects of the ecosystem, the concept of mining is what initially grabbed the Dragon’s interest. Along with currently studying computer science the Dragon is focused on bringing quality and helpful content to the Cryptocurrency space.
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