Tuesday, May 17, 2022

Mt Gox creditors divided on Russian law firm’s proposal

The Takeaway:

ZP Legal, a Russian law firm has offered Mt. Gox creditors a chance to recover the stolen bitcoins. But the proposal has divided the creditors as some are questioning the intentions of the Russian firm. The creditors have been waiting for over five years to get their stolen funds back. ZP legal proposal has been called as manipulative by some creditors.

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Creditors of failed crypto exchange have been given an offer by a Russian Law firm to recover $2 billion worth of bitcoin. This proposal has divided the creditors as some of them are ready to take a chance, and some are highly skeptical of the law firm’s intentions.

 According to Alexander Zheleznikov, ZP ‘Legal’s managing partner, creditors with claims over $150 million in bitcoin have signed up for the company’s services. The law firm is demanding to 50 to 75% of the recovered bitcoin and an extra $320 per hour in the case of success. The law firm has claimed that they have identified the Russian nationals who received stolen bitcoin from Mt. Gox in 2014. Earlier, the Russian firm offered to file a police report in Russia on behalf of the MtGox creditors. 


Skepticism around ZP’s proposal

Some creditors are questioning the intentions of ZP not just because of the very high fee but the way they offered their proposal. Lawyer and Mt. Gox creditor Daniel Kelman questioned and called the tactics of the law firm manipulative. The law firm has proposed the deal as exclusive with limited availability. Kleman wrote in a blog post that the ZP’s lawyers have treated their engagement like its a mystery box and asking creditors to gamble with their right to recovery. 

Another problem with the ZP’s method to recover is that only creditors who chose to sign up with the firm will get the benefit. Zheleznikov, himself is in the talks with the trustee’s team about the possible collaboration. The next meeting is scheduled on the 1st of October. 


Is it possible to recover stolen bitcoins?

Cryptocurrencies in Russia are not legal, and crime related to crypto are rare in the country. According to Gleb Plesovskikh, head of Plesovskih and Partners law firm, recovering the bitcoins in Russia would be very challenging for the law firm because of the uncertainty surrounding cryptocurrencies in the nation. 

Zheleznikov acknowledged that the firm would be operating in a legal grey zone and can not guarantee a successful recovery and it might take years to get any sort of result. 


BTC e the link to the rest of bitcoins

Alexander Vinnik is currently detained in Greece in a money laundering case, and both America and Russia are trying to extradite him to their countries. Some of the creditors suspect that ZP Legal has an ulterior motive behind the whole project as their operation would help them bring Vinnik to Russia by representing more victims on their side.  

According to a theory, the Russian government does not Vinnik to extradite to America as BTC e played a role in a story involving a famous Russian politician. 

An Mt. Gox creditor, Lee wrote in a blog that Greece’s decision to extradite Vinnik might depend on which country has faced more financial damages and has more victims.

In 2013, Mt.Gox was the highest volume Bitcoin exchange handling over 70% of all bitcoin (BTC) transactions worldwide, and within a year the exchange filed for bankruptcy. 

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

William Botello
William Botello
William is a market research coordinator who believes that blockchain technology and cryptocurrencies can revolutionize the financial landscape. He completed his studies in Arts and Sciences from Arizona State University.

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