CoinLab Files $16 Billion Claim Against Mt. Gox
According to a supposed photo filing posted on Reddit, CoinLab, the Bitcoin business incubator has filed a ¥1.7 trillion claim against the dead cryptocurrency exchange Mt. Gox.
A Recap of Events
In 2013, CoinLab, which was once Mt. Gox’s business partner, sued the cryptocurrency exchange for a sum of $75 million in damages for an alleged breach of contract.
The two companies had originally planned CoinLab would take over all operations in the US and Canada from Mt. Gox. The idea was that the business incubator would use its network of relationships, local banking presence and marketing expertise to grow the business, while Mt. Gox would provide its brand name and technical infrastructure.
However, the agreement fell through when Mt. Gox did not take the necessary steps to transfer ownership of its North American operations to CoinLab. The cryptocurrency exchange claimed that CoinLab was not licensed properly enough to do business in North American and would therefore not be useful as a provider of services.
This led to CoinLab filing a case of breach of contract against Mt. Gox.
Unfair Increase in Claims
The unconfirmed reports of CoinLab having upped its claim amount against Mt. Gox has drawn a reaction from the online community; many of them feel that this claim is not justified.
In 2018, Mt. Gox Trustee Nobuaki Kobayashi had sold enough of Mt. Gox’s crypto funds to pay off all the users as well as CoinLab.
However, the incubator’s claim of $75 million – which was then increased to $150 million – was holding up payments. According to multiple sources, the still-open lawsuit against Mt. Gox is what is causing delays in payouts to users who had lost their funds during the massive hack attack that destroyed the cryptocurrency exchange in 2014.
Now, the new claim of $16 billion has come as a complete shock. Mt. Gox’s bankruptcy estate is reported to have a little over 200,000 BTC in its coffers. Unfortunately, at current market prices, that barely amounts of $700 million, which is not enough to pay off the new damage claims made by CoinLab.
The CEO of Kraken Jesse Powell is reported to have declared late last year that he was disappointed to find out that this lawsuit was holding up payments. He also said that people were having a hard time stomaching the claim made by CoinLab since the company never performed, and in fact, owed Mt. Gox over $5 million.
Had the deal between CoinLab and Mt. Gox gone through, then it could have been the business incubation company that would be responsible for the shortfall in client deposits.