Now the group, which goes by the name of Sunlot Holdings and includes venture capitalists Matthew Roszak and William Quigley as well as Bitcoin entrepreneur Brock Pierce, need only get the Japanese bankruptcy court to agree to its plan – but that won't be easy.
It's not surprising that the class-action claimants want to make a deal with Sunlot, though. Earlier this month the Tokyo District Court set the failed Bitcoin exchange on the long path to liquidation, sharply reducing the chances that any of the 127,000 former customers would recover a meaningful amount of their lost bitcoins.
"Liquidation would have adverse consequences for Mt. Gox customers and the entire Bitcoin community," Quigley said in a statement. "Millions of dollars' worth of lost bitcoins would never be recovered and most of Mt. Gox's assets would go to paying bankruptcy lawyers and others involved in the process rather than customers."
Mt. Gox said it lost 750,000 customer bitcoins after it filed for bankruptcy in February.
The Sunlot plan proposes to purchase what remains of Mt. Gox for the price of one symbolic bitcoin and would seek to revive the Bitcoin exchange as a viable business.
Sunlot said it would repay Mt. Gox customers pro-rated amounts from the 200,000 bitcoins the exchange "discovered" in March. In addition, the group of former customers would receive a 16.5% equity stake in the new Mt. Gox company.
Revival Plan for Mt. Gox Bitcoin Exchange Seen as Last Best Hope
John Betts, chief executive officer of Sunlot, told The Wall Street Journal that 70% of the failed Bitcoin exchange's customers have already agreed to his rescue plan, which he said is about more than just getting people's money back.
"This is about bitcoin and preserving the value of the bitcoin ecosystem. This is our collective opportunity to demonstrate the commitment of [the bitcoin] community, that we don't need government bailouts and that the community is self-healing," Betts said.
Note: Western civilization could easily come to an abrupt halt from a terrorist cyberattack. Scary, yes. But it also means that the companies who can repulse those attacks are in for enormous paydays…
Meanwhile, lawyers for the class-action suits seemed relieved to have the Sunlot lifeline, because their lawsuits almost certainly would have run aground amidst liquidation proceedings.
"This is the customers' best option and the only chance they have for full restitution," said Jay Edelson, the lead attorney in the U.S. case, in a statement.
Both current Mt. Gox CEO Mark Karpeles, who owns 88% of the Bitcoin exchange, and founder Jed McCaleb, who retains a 12% stake, have voiced support for the Sunlot plan, which was first proposed about a month ago.
But the only vote that counts is that of the Tokyo District Court, which initially rejected the Sunlot proposal as unrealistic and lacking in financial backing.
Betts told the Journal, however, that his group has prepared a statement of financial commitment for submission to the court.
The hope now is that the Sunlot plan will at least put the liquidation on hold.
"We firmly believe that there is a strong hope to rebuild this exchange, to get the community going forward," Betts told CoinDesk.
Some in the mainstream media would have you believe that most of those investing in Bitcoin are naïve and unsophisticated fools who don't recognize a bubble when they see one. But that doesn't explain why some big names in venture capital are pouring millions of dollars into the digital currency, or why Wall Street is growing increasingly interested. Check Out Who's Investing in Bitcoin Now
Investor Group Optimistic in Fight to Stop Mt. Gox Liquidation
- The Wall Street Journal:
U.S. Investor Says Creditors Support Mt. Gox Buyout
Bitcoin Traders Settle Class Actions over Failed Mt. Gox Exchange
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.