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Mt. Gox’s legal advocate has stepped down from his position, providing a fresh twist to the never-ending saga. Andy Pag was the head of Mt. Gox Legal, the largest organized group of creditors of the defunct crypto exchange. He founded the group last year, with a view to pooling resources together and fighting for the rights of the creditors.

Pag made the announcement in a private forum last week, telling the creditors that he would step down at the end of the month. He further told them that the ‘legal quagmire’ they were involved in could take over two more years to resolve. This is despite previous reports indicating that the creditors could get compensated by the end of this year.

In a follow-up interview with CoinDesk, Pag revealed that the complication in the case is all a result of Coinlab. Coinlab was a startup incubator that had partnered with Mt. Gox in 2012. This was back when the exchange was the biggest and most renowned globally. Coinlab, which was backed by Roger Ver and Tim Draper among others, was to handle Mt. Gox’ U.S operations.

However, things went sour quickly, with Coinlab suing Mt. Gox in 2013 for allegedly failing to honor their agreement. Coinlab demanded for $75 million, a sum many in the industry considered ludicrous then. Mt. Gox counter-sued, alleging that it was Coinlab that had breached their agreement. The exchange went bankrupt before any of the cases could be resolved. However, at the time of bankruptcy, Coinlab staked a claim against the exchange.

With the rise in value of the Bitcoin Core (BTC) lost to hackers over the past three years, the Mt. Gox case turned from a bankruptcy filing to a civil rehabilitation case. This meant that instead of the creditors being compensated the fiat value of their BTC holdings at the time of hack six years ago, they would get actual amount of BTC they had on their accounts.

While every other creditor stuck to their original claims, Coinlab had other ideas. Pag told CoinDesk:

“Coinlab originally put in a bankruptcy claim originally of $75 million which people thought was excessive … When we went to civil rehabilitation, everyone re-filed the same claim, but Coinlab filed $16 billion.”

According to Pag, the claim, which he considers ridiculous, could drag the case for months on end. To start with, a judge has to assess the claim and determine if it’s valid. This could take a year. If the judge rejects the claim, Coinlab can take the matter to court, possibly consuming another year. After that, it can launch an appeal which could consume some months as well.

Mark Karpeles, the former Mt. Gox CEO believes that Coinlab will just use the ‘illegitimate claim’ to extend the case. It will then use the case to leverage a settlement, he told CoinDesk in an email.

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