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Payward Inc, operator of the Kraken bitcoin exchange, will help the collapsed Mt. Gox exchange investigate the loss of hundreds of thousands of bitcoins and manage the process of paying back its creditors.
Californian digital currency exchange, Kraken, is going to assist Mt. Gox in giving back the lost money to its creditors. It will also help the collapsed exchange to lead the investigation of the lost cryptocurrency.
The partnership is expected to be welcomed by Mt. Gox creditors, as they were discontented with the work of trustee Nobuaki Kobayashi, who was managing the liquidation process. He was criticized for the lack of knowledge on digital currency and slowing down the overall process.
During a conference, held in Tokyo on Wednesday, Kraken CEO Jesse Powell said: “Allowing the creditors to go on without reinvestment, I think, would be very wrong.”
“We’ve got to have the money that was locked up for the last 10 months returned as soon as possible,” he added.
“The outcome of the Mt. Gox bankruptcy proceedings will deeply affect the bitcoin community as a whole,” Powell stated. “We’ve decided to volunteer our resources and expertise in an attempt to minimize damage to creditors, restore faith in the bitcoin community, and demonstrate trusted leadership in the industry.”
Kraken was chosen due to its huge experience and expertise, stable performance and reliable customer support. Moreover, the company had never been attacked by hackers.
Under the deal, Kraken will pay 30 million yen, which will be distributed to creditors upon the completion of liquidation process.
The company is not going to rehabilitate the exchange or acquire its assets. When asked about the possible reopening of Mt. Gox, Powell noted: “There are no assets, no brand. There is nothing to speak of to revive.”
Still, some companies in the bitcoin industry expressed their willingness to purchase Mt. Gox’s assets. In March, Sunlot Holdings group said it had entered into agreement with Karpeles to reopen the exchange, but the contract was broken then.
After Mt. Gox collapsed in February, Mark Karpeles, the company’s CEO, said the exchange had lost 850,000 bitcoins, which were estimated at about $500 million at the time. Around 100,000 of the lost bitcoins belonged to the exchange, while the remaining part was owned by customers.
Previously, the trustee suggested converting the cryptocurrency into dollars before returning it to creditors. However, the idea was not welcomed by the customers who feared that the conversion would decrease the value of digital currency.
In order to receive the money back, creditors may be asked to register at Karken website to establish secure platform for bitcoin distribution. It is expected to boost the number of people with new accounts and some of them will likely continue using the exchange.