Coinlab’s Mt.Gox Claim Allegedly Jumps From $75m to $16 Billion, Freezing Restitution

Evidence has recently come out that CoinLab, former business partner of the infamous Mt. Gox bitcoin exchange, has increased the amount of a years-old lawsuit claim against the exchange from $75 million to an astonishing $16 billion - making it ever more unlikely that burned former Mt. Gox users will ever get their money back.

A photo of a Japanese filing document - Mt. Gox at the time of its market-eviscerating 2014 implosion was registered in Japan - has surfaced in the last couple of days, with damages across four claims totalling about 1.7 trillion JPY (and even another claim listed as “Undetermined delay damages” claiming an “Undetermined amount”).

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Digging Up Graves

CoinLab is the creation of Peter Vessenes, and was originally contracted by Mt. Gox to act as an agent in the US and Canada. But Mt. Gox suspended its contract with Vessenes and his company claiming that the latter was not properly licensed to do business in North America - and thus useless as a provider of services.

CoinLab’s ensuing lawsuit against Mt. Gox - which many, like Kraken CEO Jesse Powell believe was always unfounded and essentially backward - has tied up repayments to burned users for years. Last year, trustee to the Mt. Gox warchest Nobuaki Kobayashi sold what should have been enough to pay off all of those users, and CoinLab if it came to it.

CoinLab’s $75 million claim - later increased to $150 million - was already holding up repayment as it was. The new claim of $16 billion has come as a complete shock.

The Mt. Gox bankruptcy estate is reported to still have over 200,000 bitcoin in its possession, now worth “only” about $700 million at time of writing - wholly unable to pay Vessenes’/CoinLab’s damage claims even if it wanted to.

Reactions on Twitter from Mt. Gox users still awaiting restitution, and others, have predictably not been kind so far.