Little Known BitPoint Exchange Allegedly Used to Sell $312 Million in Mt.Gox Cryptos

GoxDox.com claim that the Malaysia-based exchange BitPoint helped the Mt.Gox trustee liquidate 25,000 bitcoin (BTC) and Bitcoin Cash (BCH) on the open market last year, against the advice of Kraken CEO Jesse Powell and others. GoxDox is a blog with the self-proclaimed mission to “[call] bullshit on behalf of mtgox [sic] creditors.”

Their claim is based on possession of what appears to be the trustee’s bank statements. The evidence indicates that a total of ¥34.34 billion ($312 million) was added to the Mt.Gox trustee’s account between Feb 23 and June 4 over 25 separate bank transfers, from an entity translating as “BitPoint.”

The trustee, Nobuaki Kobayashi, has acknowledged having liquidated a large tranche of funds from March to June 2018 - about ¥26 billion ($247 million). Before March 2018, he was reported to have sold $400 million worth of digital assets. These liquidated funds were meant to pay back users whose bitcoin was lost when the exchange went down in 2014.

Kobayashi has specifically denied selling the digital assets on the open market, aware of the impact on the spot price of those assets, instead claiming to have done so “in a manner that had no effect on market price.”

Why BitPoint?

GoxDox claim that Kraken CEO Jesse Powell offered to facilitate an over-the-counter or auction, so that the tokens could be liquidated in a less impactful and dramatic way. However, it now appears that BitPoint exchange was chosen despite its smaller size, which has left some commentators wondering why it was chosen to handle such a large sale of bitcoin over more established exchanges such as Kraken.

Commenting on the frequency and volume of small transfers, GoxDox speculated that “[i]t seems fair to conclude that the reason for sending frequent wires was to prevent counter-party risk [...] A hack at BitPoint could expose the MtGox Estate to a loss and the trustee didn't want to get Goxxed.”

This is the second time that Mt.Gox has been in the news this week. CryptoGlobe reported on February 3rd that CoinLab, a former Mt.Gox partner has increased a $75 million dollar lawsuit against Mt.Gox to an eyewatering $16 billion.