"Hedge funds"
Pay them back out of the goodness of his heart? Never going to happen unless he is forced to do so by the legal system. 260k is a boatload of money to pay off in a country where the average monthly salary is $1.2k. If by work you mean bitcoin related projects then I don't see how can anyone trust him with their money ever again.
I think the best methods here is try to restructure the debt as soon as possible. tell the users exactly how much the black hole is, and change the unit of debt from bitcoin to fiat money. If you owe 20,000 bitcoin, then it's about 260,000 USD. You can sell the site's code for thousands of USD, and give people serious commitment that you owe them such amount of money. You're live in Europe and if you work and save hard enough, it is possible that you can pay them back in 3 years.
Pay them back out of the goodness of his heart? Never going to happen unless he is forced to do so by the legal system. 260k is a boatload of money to pay off in a country where the average monthly salary is $1.2k. If by work you mean bitcoin related projects then I don't see how can anyone trust him with their money ever again.