Quote from: nuff on April 21, 2014, 07:54:11 AM

Quote from: Wilhelm on April 20, 2014, 11:13:52 PM

A liquidator cannot buy BTC since his job is to pay all fiat debts. BTC isn't a currency in many countries.
So a BTC debt possibly has a lower (or zero) priority when liquidating.
Owning a BTC in Gox would be like having bought a product and payed upfront, you simply will never receive the product or your money.

Except that this 'product' also has the same characteristics that of a currency. It's fungible, has a price value and accepted by vendors in exchange for services and goods. They (the liquidators) will still need to find a way to deal with these 'product' that's worth about a hundred million dollars at least.

The fact that BTC is not officially recognized as a currency may be the big stumbling block for the legislators. Because it's not recognized as a currency, they can't redistribute those btc back as btc, they need to liquidate those btc to fiat, and only then can compensation take place, in the form of fiat as defined in bankruptcy laws. You always get a fire sale whenever a company goes down, the liquidators would want to as quickly as possible liquidate any assets they're able to get their hands on to pay back creditors.

This whole fiasco is unprecedented where there hasn't been any legal provision written yet to tell legislators what to do with this 'product'. What follows should be interesting, how the Japanese will handle this.

+1

We have international law on a new digital product/currency. This might be a good thing for bitcoin since countries now have to acknowledge bitcoin and take a stance on bitcoin and write up legislation or agreements to handle it.

I also beleive that converting BTC to fiat might be perceived as trading or speculation an I also believe a liquidator may not speculate and thus trade.
If any converting is to be done the BTC must be auctioned to pay off all first in line fiat debts.
Then they get into the next mess and that is the price of bitcoin since many debts are in bitcoin, if any money is left they will probably have to come to an agreement with all people holding bitcoin accounts.

Quote from: johnny211 on April 21, 2014, 01:58:09 AM

Quote from: Wilhelm on April 20, 2014, 11:13:52 PM

A liquidator cannot buy BTC since his job is to pay all fiat debts. BTC isn't a currency in many countries.
So a BTC debt possibly has a lower (or zero) priority when liquidating.
Owning a BTC in Gox would be like having bought a product and payed upfront, you simply will never receive the product or your money.

Excluding BTC debt Gox is still solvent, they just need to close their USD 30M short. Why is the liquidator even involved? None of this makes any sense.

1) "Insolvency is the inability of a debtor to pay their debt."
2) "The state of having liabilities that are greater than assets"

It is obvious that 1 applies.
Since Gox is shut down and doesn't have a real office what assets or income do they have? A few servers, corporate car, printer, desk stapler? (most of these cost money to run)

How can you say they are still solvent?