Business 6 February 2019Ed Drake
Mt. Gox trustee bank book exposes crypto dumping
Evidence of alleged mass dumping of Bitcoin Core (BTC) and Bitcoin Cash (BCHABC) by the trustee of the failed Japanese cryptocurrency exchange Mt. Gox has been uncovered by researchers, contrary to statements from the trustee and the advice of external experts.
The revelations show significant sell-offs by the trustee, which researchers have linked to specific declines in value in BTC, BCHABC and the wider cryptocurrency sector.
In a blog posted at GOXDOX.com, the researcher points to unequivocal evidence of the “Dumpening,” and its impact on crypto markets.
According to the post, “We can’t yet be 100% certain how the so-called ‘Dumpening’ of 35,000 and then 25,000 BTC/BCH was conducted. But we’ll reveal to a 100% certainty the other half of what MtGox trustee Nobuaki Kobayashi doesn’t want you to know—the identity of the party who conducted the sale. And if we had to wager a bet, we’d discount the trustee’s opinion and bet big that they dumped.”
Mt. Gox trustee Nobuaki Kobayashi previously said he had sought the advice of court-approved cryptocurrency experts to advise on the sale—statements now purported by GOXDOX to be false.
However, the post reveals statements from crypto exchange Kraken, saying their advice to the trustee on how best to proceed was ignored.
“Instead of taking Kraken’s advice, the trustee decided to (1) sell, (2) not tell us how he sold, and (3) hire a different so-called “cryptocurrency expert” to sell the BTC/BCH…There was never an auction, which means the coins were sold OTC or through trading on an order book (or both),” according to the post.
The allegations are significant because of the impact on cryptocurrency prices, with the suggestion that dumping BTC and BCHABC drives down the value of the remaining holdings, to the detriment of those still owed money from the exchange.
“An auction of the MtGox Estate’s BTH/BCH would have resulted in less damage to the value of its remaining assets, not to mention the entire crypto market. It’s a shame the trustee…didn’t see that,” the post noted.
The revelations come just days after former Mt. Gox business partner CoinLab raised its claim against the defunct exchange to $2 billion.
The firm was expected to take over Mt. Gox’s U.S. customers and had been suing for breach of contract after this failed to materialize.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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