Creditors of Mt Gox waiting to get their bitcoin back from the long-defunct exchange can now get pennies on the dollar by selling their claims to Fortress Investment Group.
In a letter sent to creditors, Michael Hourigan, a managing director at the New York-based private equity firm, said he is purchasing these claims for a bitcoin investment vehicle the firm operates.
Mt Gox collapsed in 2014 after some 850,000 bitcoins disappeared from the exchange’s servers. While the exchange entered bankruptcy at the time, its status switched to civil rehabilitation last year.
Creditors of the exchange hoped that they would receive their missing bitcoin after the switch, rather than the cash equivalent at the time of the exchange’s collapse. The case is currently sitting before the Tokyo District Court.
Selling claims
Multiple copies of the Fortress letter were shared with CoinDesk, with one version published in full below.
“Dear Creditor,” the letter begins. “I manage an investment vehicle which has been buying Mt. Gox creditor claims.”
It goes on to add:
“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.”
The $900 price is fair to both creditors and Fortress’ investors, Hourigan contends. (It represents about 7.5 percent of bitcoin’s Monday afternoon market price of $11,870.72, according to CoinDesk’s bitcoin price index.)
One creditor, who did not wish their identity to be made public, told CoinDesk that the letter also included their individual claim amount and a letter number.
Former Mt Gox creditor advocate Andy Pag announced in April that he had sold his stake to a New York-based investment firm for $600 per bitcoin. He did not name the firm at the time and did not respond to a request for comment by press time Monday.
Long-term interest
Fortress has long been active in the crypto space and was reportedly looking to launch a bitcoin investment fund as far back as 2013 – before Mt Gox collapsed.
The New York-based firm bought $20 million in bitcoin that year, according to public filings.
Former Fortress CIO Michael Novogratz has continued to remain active in the space as well, most famously with his “crypto merchant bank,” Galaxy Digital.
Fortress was acquired by Japan-based SoftBank in late 2017, which itself has been active in the blockchain space (though less active with bitcoin projects specifically). However, Fortress remains in control of its day-to-day operations, according to the Financial Times.
Neither Hourigan nor a Fortress spokesperson immediately returned requests for comment.
Mt Gox image via CoinDesk archives