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Peter McCormack: Hi Andy. I didn't think we would chat again so soon!

Andy Pag: Hi! Thank you very much for inviting me back onto your program.

Peter McCormack: Not a problem. We had a very good call last time, a very good interview. It was a really good way to summarise everything that happened and I think you were very balanced about it, but I didn't expect to see the news that I saw this week, that you were stepping away. So what's happened over the last few weeks since we spoke?

Andy Pag: Well yeah, it wasn't that long ago since we spoke, it feels like it's very recent. Before I get into that, I said this at the time, but I'll kind of reiterate it because the feedback I had about the podcast that we did and the series you did, it was really, really positive. I think what you did, with that series was a real benefit to creditors and I think if anyone hasn't caught it, there's a lot of content there, but it's worth sort of churning your way through it if you're a creditor.

I think there's a lot of stuff that a lot of people didn't know. So a big thank you, on behalf of creditors. Certainly, the creditors have been in touch with me about it, to say that they found it really helpful. So thank you to Peter for that.

Peter McCormack: No worries!

Andy Pag: In terms of what's happened since then. The big epiphany for me if you like, is that I went to Tokyo for the creditor's meeting. So every six months in the bankruptcy, the trustee holds a creditor's meeting. So I've attended the last three and slowly been building up a relationship with the trustee as well. So we're now in a position where I get to have private meetings with him and our lawyer. We get to discuss and share the thoughts that creditors from the group are putting forward. It doesn't reveal anything that he wouldn't anyway. He can't show preferential treatment to one set of creditors over another. But it is a good opportunity for a bit of dialogue and to clarify things that are happening. He also holds this public meeting.

So there are a couple of big things that really happened when I was in Japan. The first thing was that at the public meeting he announced that, he was going to put civil rehabilitation on hold until the Coinlab case has been settled. So there's a little bit of background. Mt. Gox was in bankruptcy. Under bankruptcy, there's a big surplus of assets because of the price rise back at the end of the 2017. That surplus would have gone to Mark Karpeles and Jed McCaleb under bankruptcy.

So we as creditors have launched various legal processes to move the process from bankruptcy towards something called civil rehabilitation, which is a bit like re-establishing the company, but not as an exchange, as a functioning company and just as a legal entity that can then distribute assets fairly to the people that it owed money to. So that's been our goal. We were heading that way and it was looking all really positive and it looked like around about April time, there would be a vote on the civil rehabilitation plan and we would, as creditors, get to approve civil rehabilitation and then that would basically be our safe harbour. Once we get to that point, then we have a level of certainty in the process in terms of how much distribution there's going to be to creditors and in terms of when that's going to happen.

Really until we get to that vote there is uncertainty in that process. We don't know when it's going to end. We don't know how much the whole process is going to be worth to creditors with any certainty. So it was a frustration to find out that that wasn't going to happen in April. But what was more concerning is the reason for that, is that there is this case brought by Coinlab who back in 2013 had an agreement to essentially be the franchise for Mt. Gox in the US and that came with responsibilities in terms of licensing in the various states, which they either did or didn't need to have, depending on whose side of the argument you're on.

But basically that agreement fell apart and it kicked off a lawsuit between Coinlab and Mt. Gox. This all happened before Mt. Gox went into bankruptcy. That lawsuit has mutated into a claim in the bankruptcy process. So back in 2014 Coinlab put in a $75 million claim against Mt. Gox. So along with all the people that lost money on the exchange, they were also saying to the trustee, you need to give us $75 million because that's what this contract was worth. But that case hasn't been decided yet. So there's an argument and to-ing and fro-ing that needs to be had over whether or not they're entitled to that $75 million. Then when we moved to civil rehabilitation, when we started the process of moving to civil rehabilitation, Coinlab also had to resubmit.

Everyone had to resubmit their claims. So all the creditors that were customers of Mt. Gox, we all resubmitted our claims. Coinlab also had to resubmit that claim, but lo and behold, between 2014 and last year, their claim has somehow grown from $75 million to $16 billion. So they are now claiming $16 billion! Now in my eyes, no earthly reason how you can calculate the damages of this and come up with a number $75 million, it doesn't make sense.

To my perspective, it looks very much, and to a lot of creditor's perspectives, it looks very much like a strategic approach, where they're trying to... I have to be careful what I say because I don't want to get sucked into a lawsuit libelling Coinlab, but it looks very much like a strategic approach, where they're just trying to block the process and they've been actually, unfortunately for us, very successful at doing that.

Peter McCormack: We spoke about this before. Do you think the claim is so high because they want to essentially block out the potential future value of the entire holding?

Andy Pag: Well, anything that the trustee holds assets in, it's in Bitcoin, so it fluctuates. The value fluctuates. But roughly speaking, it's about $1.5 billion dollars. Now if you see there's a bankruptcy that has $1.5 billion dollars worth of money that it can pay to the people it owes and you choose to go into that process saying, "well, I want $16 billion".

Clearly, you can understand that you're not going to get $16 billion. But clearly there's some thought processes that's gone into that. They haven't just stumbled across a number. So I don't know what the thought processes are in their heads, but I'm sure people listening to this can form their own views.

Peter McCormack: I mean, my view would be that at $20,000 that's potentially $6 billion of assets. If Bitcoin was to go to run to $50,000... It seems like they've almost tried to protect themselves, knowing how long the process can take, that whatever happens to the price they've covered the whole lot.

Andy Pag: Yeah. The number $16 billion coincides with $20,000, all time high for Bitcoin price multiplied by 800,000 Bitcoin, which is the total amount of Bitcoin being claimed by creditors. So it's almost like they've chosen a number that matches exactly the total amount of the best case claim that all creditors put together could have. So what that does practically and no one imagined that they would do this, no one saw this coming, we've really been blindsided by this.

But what that means practically for the trustee, is that when it comes to holding this vote, that we all agree this is how the civil rehabilitation process is going to go through, he has to attribute voting rights. Those voting rights are based on the size of your claim. So if my claim, it's however many, calculated back to Yen, and that's what my vote is worth in that process. So if you're a big creditor, you get more say in how things are done. But if you're a creditor that has basically 16 times more voting power than everybody else combined, then clearly you get to dictate.

Until that case is settled, until the trustee is able to say, "okay, I'm rejecting 100% of this", or "I'm rejecting 99% of it", or "I'm accepting the whole lot", or whatever the decision is going to ultimately be and we can talk about that as well. But until the trustee is in a position where he can say, "this is actually what Coinlab's claim is worth and therefore they get this many voting rights in the next stage of the process", then the trustee is blocked.

I mean with the best will in the world, he can't move forward because he can't just assign... What happens in situations like this traditionally in Japanese bankruptcies, when it's the corner shop that goes bankrupt and there's four people arguing over it and one has a disputed claim, which is what Coinlab's is, then the judge will say, "all right, well you're disputed claim, we don't know whether it's going to win or lose. So we'll give you 50% voting rights.

That's rough justice and that allows us to carry on the process". But with Coinlab, even if you give them 50% of the voting rights, they still have eight times more voting power, than everybody else combined. So it makes a mockery of the process and it's grounded us to a halt. So that's frustrating because the deadline was the end of April. How long it's going to take, is the real question. The truth is nobody knows.

I've got my views and they are my opinions and views and I want to make that clear to anyone that's listening to this and thinking about what their options are, that I'm offering this as a personal set of views. I could well be wrong, but my view is that it's going to take between at least 18 to 24 months and there's a good chance it'll take longer than that. I don't want anyone to think, "okay, well based on that I'm going to make big financial decisions in my life" and that it stands out and that it only takes three weeks or ends up taking 10 years or something like that. But who knows, that could happen and then people are saying, "oh wait Andy Pag said that it was going to take two years and it's all his fault."

Peter McCormack: That's a fair disclaimer!

Andy Pag: So as long as people are willing to listen to what I'm saying in that context, then I'm happy to share my view, which is I think it's going to take a couple of years to get to that process. Now originally, I did have a suspicion that something like this might happen, but the process Coinlab has to go through at the moment, they're in a process called assessment or re-assessment, where they've made a claim and the trustee on his own has looked at it and they've rejected it and said, "no, we're not having any of that." Then Coinlab have a right to say, "well I don't think you've looked at this fairly.

So now we're going to put it in front of a judge", and this is within the bankruptcy proceedings, so it's not litigation. But it's a process of submission. So first of all, Coinlab makes a submission to the judge saying, "well this is why we should have our claim accepted." The trustee looks at that, there's a period of time and the trustee then replies, "well, this is why that's a load of rubbish and they shouldn't have it." Then Coinlab gets it and this process can go backwards and forwards for... There's no specific deadline as far as I can tell. It goes backwards and forwards until everybody is satisfied and the judge makes a ruling.

Now, previously under bankruptcy, they were arguing over, presumably the same legal points and that process had been going on for four years. They'd already been the reason or one of the main reasons for holding up bankruptcy for four years. So we've already done four years of this. Now the trustee said at the meeting, "we're not going to start from the beginning because we've already done that. So we're underway." My view is based on having spoken to our lawyers, they said, "well, it can take two months. It could take six months. Actually, who knows?"

The other thing Coinlab have done is that they requested the court seal all the paperwork relating to these submissions backwards and forwards. So no one else can see what arguments they're making and make any kind of judgment of like, "well, is this close to conclusion or is this going to take forever?" The trustee is in a position where he can't say to one set of creditors, i.e. us, "hey everyone, don't worry. It's almost over." Or "hey guys, this is going to take forever", because he has to be neutral.

He has to respect the fact that while Coinlab have a disputed claim, he has to treat them the same as another creditor until their claim is rejected and then he can disregard their interests. So the trustee isn't allowed to tell us, Coinlab have requested that the court seal all the paperwork, so we've got no way of really judging what stage this is at. What merits the legal arguments that are being made are being submitted. We're completely in the dark, it's a really, really frustrating process.

I've made a request to our lawyer that they unseal the paperwork, but actually we don't have any standing really to do that. So we don't know how long it's going to take. I spoke to Mark Karpeles about this. He reckons it might take up to a year and he's pretty well connected in these issues. I had a conversation with our lawyer and said, "well, so once they've been through this reassessment process, what happens then?" If it's rejected at the end of say six months or nine months or whatever it is, if it's rejected at that stage, then they can move to litigation.

So the difference is that they're basically arguing out in a courtroom rather than with written submissions. The other difference is that Coinlab then have to pony up some money in order to be able to do that, they have to pay court fees. Now initially my conversation with our lawyer a while back, I said, "well, what kind of money are we talking about?" He kind of just did on the fly rough calculations, said "it's about $15 million". I thought, "well, okay, that's all right because there's no way Coinlab have that sort of money to throw around at what is pretty speculative sized claim.”

So when that time comes, I was thinking that what they'll do is they'll shrink their claim down and they'll just drop a few of the more sort of spurious bits or the more unlikely to win bits. They'll probably drop those and they'll bring it back down to around $75 million like it was before and argue over that. That will reduce their court fees and it will allow them to do it. But if they bring it back to $75 million, they won't be holding the rest of the process up because at $75 million, you can give some voting rights or you can do something that is, again, rough justice, but it would allow us to continue on in the process.

Peter McCormack: I guess with that, it feels like they probably want some kind of outer court settlement?

Andy Pag: I think there's a good likelihood of that. Yeah, I think... Actually remind me of that in a second. I'll just finish off on this point that was making about the $75 million. Actually what I found out when we were in Japan, I sat down with the lawyers and we did the calculation a lot more accurately and what I've realised is that for very little money for about $400,000/$500,000, they can probably still put in a claim, maybe not $16 billion but around $1 billion or $2 billion.

That is still big enough to hold the process up, so I don't think we're going to get to that stage, if they choose to go to litigation. I think that they will choose a litigation fee... A claim value rather I should say, that is affordable in terms of litigation fee, but big enough that it still holds the process up and precisely for what? For the reason you're saying, which is I think ultimately the trustee has looked at this. I think the trustee has done a really good job of being a neutral arbiter during these first processes because he doesn't have any interest in rejecting a claim that's valid.

His job is to neutrally look at the claims that are put in front of them and he's looked at the one that Coinlab have come up with. He's had his commission independent expert, a legal opinion on the key issue, which is whether or not they were licensed to perform the money transfer activities that they did and when he looks at it in a neutral light, the answer is no, you don't have a leg to stand on. So when it goes to litigation, then I think he can be a bit more aggressive.

But like I say, he has no interest in rejecting a claim that is valid. So I feel like in a way, I'm confident that the fact that he's looked at it and rejected it means that it doesn't have grounds. Are they looking for a settlement? That's a pretty reasonable conclusion to come to I think. I've had a conversation, both in private and online with Coinlab's US lawyer, a guy called Edgar Sargent and his take on it is, "look, this is a valid claim, this is a valid case. It started before Mt. Gox were worth gazillions. We're not ambulance chasers. There's a breach of contract that's happened here. The liquidation damages that are specified in the contract and my client has suffered damages and he deserves recompense."

You listen to him and you think, "okay, well maybe isn't as cut and dry as that", but then you also think, "well, hang on then, why have you put this $16 billion claim in then? It just makes no sense at all." In fairness to Sargent, he is the US lawyer, and what he says is that he's not responsible for the strategy in Japan. There's a different lawyer in Japan called Wada, who is the one that's managing that part of the lawsuit.

So that's where he stopped short of saying anymore. I did speak to him, I said, "well look, the trustee isn't going to sort of get into discussing settlements with you because he's looked at it and in the neutral light and he doesn't think you have grounds." So it makes it very difficult for him to then go to the court and say, "I don't think these guys have a leg to stand on, but we should give them $10 million or $20 million or whoever knows what this number is going to be." I think it makes it very hard for him to justify that to the court and also puts in a difficult position that if he does that, there are 25,000 creditors, some of whom will say, "hang on a minute, that was completely unjustified and I am now going to sue the trustee."

The trustee has to tread a very, very neutral line in this. He is going to be very lucky to get out of this whole process without being sued by someone at some stage. So I think he's in a difficult position to be able to negotiate that deal. So I said to Sargent, I said, "look, if you have a number in mind, maybe I can act as a sort of bridge between, you, the trustee and the creditors. Maybe between us, if you can give me a number that you and the trustee can agree on, I can put that to creditors through Mt. Gox Legal and see what the response is and if there is a consensus, then I can pass that consensus back to the trustee."

That gives him a little safety blanket to say, "well, I agreed this settlement and here's why I agreed to settlement because the creditors gave me the green light to." So that gives him a little bit of protection if someone eventually does come after him and say, "well, I'm going to sue you because you shouldn't have made that deal with Coinlab".

However the practicalities of that is that, A- Sargent doesn't trust me to be an intermediary, quite rightly. B- The trustee isn't in a position where he can treat me, a creditor and give me any more information he's giving anyone else. Thirdly that the creditors, we run a poll on the forum saying, "how much money would you think is reasonable for us to put aside as a settlement for Coinlab?" The big answer was a massive resounding "Fuck you Peter (Vessenes). We're not giving you a penny." So actually that whole exercise... I did try and see if there was a way of carving a route through that, but there absolutely isn't that I can see!

Peter McCormack: I do worry that someone will turn around and say, "look, let's settle" and I'm with you. I just think, "fuck you! No Way. Do not do this deal." Nobody is behind him. Nobody supports it. To be honest, you're the only person who's been fair enough to try and even consider why he might have a fair claim. Yet at the same time, you don't agree. So no, I would hate for there to be some settlement.

Andy Pag: I think in terms of does he deserve it? The answer I would say is no. But there's another question, which is, the guy is stood in front of you and you're trying to get past. So do you just reluctantly reach into your pocket and give them something to get out of the way. Then it's a question of how much, well, okay, if you going to have the thought, well let's give him... Supposing he would accept $10 million, which I don't think he would. I think he is expecting a lot more than that at this stage.

Suppose you said, $10 million, that sounds like an obscene amount of money to give someone that's essentially holding you up. In practical terms, what does that mean for creditors? It's a tiny, tiny portion. I think it's a hundredth of a percent. I mean you wouldn't even notice it in your pay-out but equally, it would sting on a point of principle.

So then you come down to this question, "well, do I want to be proved right or do I just want to be happy and get on with my life?" I think it does feel like such a shakedown, that a lot of creditors are just like, "no, this is a point of principle. We are not relenting to this guy." But the flip side of that is, "okay, well then buckle in, because you're going to be sitting in the waiting room for potentially a couple of years, potentially longer."

There are different, I say creditors as a whole, but there are different views amongst creditors. Not everybody said that they would completely reject any settlement out of hand. I think it was about 44% said "not a penny." That was by far the largest core.

Peter McCormack: What kind of settlement did some people band about that they might be okay with?

Andy Pag: Let me just look it up. I'm just going to talk if I can find it. I'm just going to talk in vague terms because this is information that's on the forum for members and there will be a time when we pass this to the trustee and it will be for him. So I'm just going to talk in vague terms. So just under half would say nothing, it was actually 48%. Sort of $5 million, $10 million, there's a small spread of that sort of order of magnitude. Actually just to qualify those numbers, that was a poll that we actually started with about a year ago. That we are just revisiting and people are just coming back to it, changing their opinions and voting. So that's a kind of dynamic result.

Peter McCormack: Did you meet up with Mark while you were there?

Andy Pag: I did.

Peter McCormack: How is he?

Andy Pag: I know where this question is going...

Peter McCormack: No, no, no! I'm more just interested in how he is. Obviously he's had his case essentially settled.

Andy Pag: He got a verdict. He was found guilty, but he was given a suspended sentence.

Peter McCormack: Which felt about right.

Andy Pag: He was found guilty of data manipulation. Yes and no. I went to see him and I was thinking, "oh, well then now that pressure is relieved, there may be sort of bits of information that he's been holding onto that for various legal reasons he wasn't allowed to share with us." So I just went with the intention of let's have a coffee together, chew the fat, just kind of keep that relationship warm and see where that goes. I've always found with Mark, that he kind of alludes to having some key piece of information that will be very helpful and then it never materialises.

I always put that down to, "okay, so he's got a bit of a quirky personality and he's got this legal case going on and there are other things in his life," and there always seems to be a way of justifying why, "all right, well I'll give him the benefit of the doubt." But I saw a really different side to him, almost Jekyll and Hyde side to him. I went along, like I say, thinking we're going to have coffee and donuts and just chew the fat. He sat me down in front of a screen and said, "right Andy, this is in my plan here. This is what we're going to do." I kind of listed a little bit of the outline of the plan on the forum to members and I really want to share it more publicly than that.

But the plan itself I don't think is a good plan, from creditors point of view. I don't know. I think it creates risks for creditors and those might be beneficial, but those also be detrimental. But I think there is an upside for Mark personally, which is why he's pushing it. I don't want to get into the details of that, it's not really fair on Mark. It's his plan, he wants to push it, he should speak about that. But what it really gave me and actually I was quite shocked at the whole experience, what it really gave me, is this insight into how Mark works.

It's almost like now he's been given his green light from the court, it's almost like he's just reverted to type and he was talking about sort of moving this step from here to there and then changing this law suit round and then driving this and borrowing some money from this. It was all really kind of robbing Peter to pay Paul stuff and it kind of meant, "all right, well maybe there'll be a way of getting rid of Coinlab with money from the Mt Gox estate", but creditors won't... It won't be quite transparent, so they won't see that it's happening and it's in their interests, but it will remove the resistance from creditors.

I just thought this is precisely the sort of mindset, precisely the bullshit mindset that got us all into this mess in the first place. It was you kind of juggling numbers with the nominal idea that yeah, this is good for creditors but actually who is most good for is you personally. I actually really sat there politely and listened and thought about it. Where I met Mark was probably like a good hour out of town. I ended up walking the way back because I just needed to walk off that kind of frustration and energy of like, "what have I just heard?"

I certainly don't want to be co-opted into it. Let us give Mark the benefit of the doubt. Yeah, he's trying to find a way of removing the barriers to getting a settlement people. But actually I think that that comes as a happy side effect for the primary goals of his plan, which is to sort of set himself up on an even keel again. Fair play, he's got to look after himself, he's got to feed himself and look after his own interest as well.

Again, I'm getting sucked into talking about Mark's plan a load more than I want to. It's for him to talk about if he wants to do that. But the big take home here, was I just saw this side of Mark, which I think was a real flashback. I think the verdict and the sentencing has maybe emboldened him back to a point where he has just learnt nothing from this whole process.

Peter McCormack: Yeah. I would have thought... He's got this suspended sentence. The best thing for him to do is step away from everything. If he needs to sign papers or anything, because there's that part of the due process, but he should not be involved in any part of the planning or any part of what's going on now. He should just step away because he's got himself a bit of a pass now to get on with his life. If he wraps himself up in this, he's only adding risk to his own credibility again.

Andy Pag: Yeah. I did have a similar conversation with him a year or maybe longer ago when he was trying to put forward a civil rehabilitation plan, which was going to cost $300/$400 million or something like that, which then turned out to be completely unnecessary. I don't think he realised that that investment was unnecessary and he was also thinking of doing some sort of "coin start up" at one point relating to it.

But I did have that same conversation to him, like "Mark, you are not the appropriate person to be leading any kind of recovery plan and how can you not see that?" And for your own interest? Exactly as you say Peter, your own interest. Just take a step back and say, "look, I'm just going to be below the radar here and get on with my own life."

Peter McCormack: Yeah. That's a shame to hear that. So I guess you left that, you had your long walk and you got your flight home had a lot of thinking to do?

Andy Pag: Yeah. So I've made this decision to sell my claim and it certainly wasn't an easy decision.

Peter McCormack: Well, there's two things there though Andy's, because there's the selling of the claim and stepping down as leading the creditors in some way. Is it essentially the same decision to do both at the same time?

Andy Pag: Yeah, I think one comes hand in glove with the other for a number of reasons. I don't think you can be a representative of the creditors, without actually being a creditor. I mean, firstly you don't have any standing, so I wouldn't even be able to meet with the trustee or go to the creditor's meeting. I mean it's not like there's any security and anyone checks ID, but strictly speaking, you can't go to the creditor's meeting unless you're a creditor. I wouldn't be able to stand up and ask questions and interrogate the process. So not having any standing limits me.

I think the appetite from the members of the group... Actually I may have misjudged this, but I assumed that they would be quite clearly adamant that if you're not in it with us, then you can't lead us. Actually, I've been really surprised. There's been a really positive, and I've been really touched by just a lot of impromptu messages just to say, "thanks for everything you've done so far Andy, it's a real shame you're stepping down." So, maybe on that front, it could carry on.

But the third thing, is for me personally, I'm putting a lot of effort into this because I know at the end of the day, there was going to be this pay-out. It's hard to be as motivated about Japanese bankruptcy process unless you're financially engaged in the upside of it. So I think for me, just to be motivated... There's a lot of upsides to walking away from this process in sort of intangible ways. There's a lot of conversations and people that I never particularly relished, but that I don't have to engage with anymore. I can just get on with other things in my life, so that's the other upside!

Peter McCormack: I guess if your decision is to sell your claim first and I can understand why you want to step down as representing the creditors. But if it was the other way round, so if you said that this is too much stress, I want to get on with my life, you still could have held onto your claim?

Andy Pag: Oh yes.

Peter McCormack: So I guess... Let's deal with them both.

Andy Pag: It's a reluctant by-product of selling my claim, that I have to step down. For all the bitching and moaning I do about it, I do actually really enjoy this. I set this organisation up with the help of a handful of other people and we've seen it grow from the very inception, from day one it was clearly going to be a very popular and necessary thing, there was a big demand for it. It's grown and it's really wonderful how cohesive group we are when you consider how diverse a group we are.

So it's something that I am very proud of and something that I will always boast about and it's very hard to walk away from that. But at the same time I just think there is the prospect that this is going to go on for another two years. I think in practical terms for Mt. Gox Legal, this is a decision for whoever takes over running the group. From my perspective, it feels like there is very little that we can do. We really are in a log jam here and we just have to wait it out and let the trustee and Coinlab fight it out and see what way they can find. For what it's worth, the trustee is definitely on side, he wants this matter sorted as quickly as possible.

He said as much at the creditor's meeting, he's working really hard and as fast as possible to get this done. What that means and what that translates to in practical terms, I don't know. The longer this process goes on for, the more it's at risk, I feel. This is really the thing that tipped me over the balance.

There are a lot of opportunities in this process for investment firms with money, that are coming at this completely dispassionately about whether they care about creditors or not and just saying, "where's there an interesting opportunity here? Where can I stick a million bucks into this process, with a good chance of recovering a healthy return" and there are some opportunities in this process, which if people come along with that mindset and if they spot those opportunities, they will hold the process up even more or they will risk the amount of funds available to creditors at the end to shrink in some way, shape or form.

So the longer this goes on and the more it's worth, as the price of Bitcoin goes up, the more it's going to get onto people's radars. Then I think the more of a risk there is for us creditors sitting there patiently waiting and like I say, we're helpless in the process at this stage. I don't think there's anything that we can do to speed things up or to get them to leapfrog forward.

Peter McCormack: Have you ever revealed the size of your claim?

Andy Pag: It's around a hundred. You can look me up, there's a list that's publicly available, informally publicly available, but there's a list of all the creditors under bankruptcy. My claim's 104 Bitcoins.

Peter McCormack: All right, okay. So you sold that for $64,000?

Andy Pag: Yeah $62,000, something like that.

Peter McCormack: Okay, so I've got a few questions around that. So that's quite considerably below the price of what Bitcoin is now and almost certainly well below what it would be say if it settles in a couple of years. I guess you've just this... So there's a couple of questions. The people who are buying the claim are hedging risk, they're buying the risk. But they're also buying the risk at about 20% of the price. Even less?

Andy Pag: There's some really good guys in the forum, that have done a lot of work with all the numbers and if the trustee settled tomorrow, it would be... It's roughly about half, maybe I'm getting a little bit more than half. That's if the trustee settles tomorrow and everything worked out perfectly. So the risks are, that clearly that the trustee is not going to sell tomorrow, when nobody knows what the price of Bitcoin will be when he sells. Nobody knows. For me this has always been a big chunk of money hanging over me and when it lands, things in my life are going to be very different.

The thought that the uncertainty over that, is actually quite costly in terms of how I can live my life. So I've already had a good 18 months of like, "yeah, we'll put that on hold, because when this money drops, it's going to be great. Put that on hold. No I won't do that yet." Just getting rid of that uncertainty for me personally is a big bonus of like, "okay, it's not the windfall I thought, but it's still a windfall and it's a windfall at the end of this month, it's definitely coming on this date and then I can start those things." So that is worth a lot to me. The other calculation is basically that the people that would buy a claim are buying a long-term futures contract for Bitcoin and they're getting a discounted price, but they're going to have to wait for an unknown amount of time and then when that happens Bitcoin will be at some price.

Who knows what that is? Maybe it will be $50,000, maybe it'll be $300. Who knows? That is their risk to take. My calculation is that I'm better off with that cash. I can spend some of it on doing the things I want to do and I can put a little bit of it back into Bitcoin and I can watch the markets. I'm not the world's best trader. God knows I put my money in Mt. Gox so there you go, that tells you everything you need to know. But I think in the meantime between now and date X whenever it is that the trustee pays out, I think the market will have fluctuated up and down enough that with a bit of that sort of attentive trading, I could probably end up... That's actually that's my little personal challenge, which is, can I come out on top?

Just out of a sense of pride because it's interesting, there has been a bit of a backlash, "oh, you're selling out!" Yeah, I am selling out, thanks. I want to get on with my life! But there is a little bit of pride and I've been called, "that's the stupidest decision. How can you be so dumb", that kind of thing. So that's rankled with me a bit and there is just a little sense of pride in, "all right, well let's see just how stupid it is. Let's see if I can actually lose even more by trying to trade on the Bitcoin price!" But let's see if I can actually make it financially so I'm not losing as much of that discount.

It's also interesting, the guys that were interested in buying it, initially the price was around $4,000, it had been steady at $4,000 for two months or whatever. They said, "look we'll just come in at 15%." I think what they were thinking is, if it drops a little bit below, we'll be able to sort of save a few pennies. If it goes a little bit higher, then whatever. Then literally the next day it went up to $5,000 overnight and they were like, "yeah, we can't honour that," because you're not kind of selling.... I've deleted it now and it's wonderful.

But for a long time, up until last week, I had this little spreadsheet on my phone that looked up the price Bitcoin and calculated exactly what my claim was worth if it was settled today. I would look at it in the morning and if it had gone up from the day before, I would be happy. If it had gone down, I would be grumpy. That made no sense because that money isn't coming today or tomorrow.

It's coming at some point in the future and the price of fluctuations of Bitcoin today, have absolutely no bearing on what that will be at some point in the future. So these guys are a dollar fund and they said, "look we can't just suddenly increase our offer by 20% because of the price of Bitcoin has gone up today. It'll be back down again maybe or maybe not. Who knows?"

Peter McCormack: Yeah. I guess where I got confused is because I saw it per coin, but as I remember, even though your claims are 104 coins, there isn't actually the equivalent 104 coins there. It's a proportion?

Andy Pag: That's right. yeah. So I think the trustee has 140,000 Bitcoins and there's 800,000 Bitcoin's worth of claims, but then the trustee also has some cash and there are some cash claims and there's a sort of logic of how the trustee will distribute the assets they have. When you calculate it, he has to distribute cash to the fiat claims first and that's a by-product of the fact that we're moving from bankruptcy to civil rehabilitation.

So once all the fiat claims are settled and they get an interest payment as well, then everything that's left is divided up by all the Bitcoin claims. That works out depending on how the maths goes, somewhere between 15% and 18%. That's assuming there aren't any other black swans waiting on us. But I mean this whole thing has just been a flock of black swans, these kind of unexpected events which have massive financial implications.

The most trusted crypto exchange in the world that handles 7% of all of all Bitcoins goes bust. Who would ever have seen that coming? Well maybe people did, but anyway. Then a bankruptcy, which suddenly has more assets, than it has liabilities, who would ever have seen that coming? Then a claim which goes from $75 million to $16 billion, who would ever have seen that coming?

I just think that if this goes on for another two years, there's going to be other stuff that like, "oh, crap didn't think that was going to happen! Who would have guessed that was going to happen?" So there's a number of reasons there, that are all bundled in together. I have to stress as well, I'm not making any kind of recommendation to anyone else. This is how it works out for me in my life and the information I'm sharing, I didn't really want to do this interview.

We were exchanging emails last night and I said, "I have no reason to do an interview. I don't have a book to sell or I'm not promoting anything. "You quite rightly said, "well I think it would be a useful thing for creditors to understand the reasoning and the logic and then they can use that information to make their own judgement." I think that's actually the only reason why I'm doing this interview. My bestselling book on Amazon, "How I lost a load of money on Mt. Gox" is not available in the shops!

So I have nothing to sell other than to share a bit of information. I feel like I'm happy to do that for the creditors. I've been quite a central person and I've spoken to, privately and through the forum, with an awful lot of people. So I'm more than happy to share my thinking. There's been a little bit of a backlash, not a lot of people, but a quite vocal backlash of, "he's selling out and this is a really bad idea." I think that's driven by a sense of frustration and I've had this throughout the process, that people direct their frustration with the process, at me because I'm the one delivering the news and there is a sense of frustration.

Look at that little spreadsheet on my phone, it says that it's worth this much today, why isn't someone appreciating that and offering me that much for it or offering me something close to that much? Any offer that doesn't get close to it, is someone that's low balling and they're trying to rip me off! I get that frustration. I've been through it, I know it as well. But I'm a little bit tired of it being directed at me. I've looked at it, I am frustrated by it, but I'm making that decision.

You look at it, you're frustrated by it, don't make that decision, that's fine. No one's forcing anyone to sell. Don't do it if it's not right for you, just hold on. It is just frustrating that there's a wait ahead of us and my judgement is that that's probably going to be something in the region of two years, if not more. It might turn out to be all resolved by the end of this month. Who knows? Or it might take 10 years!

Peter McCormack: But it's been more than just a job. It's not just been a job, it's become almost like a mission and a duty. I guess it's swallowed up a large percentage of your life, but also a large percentage of your thinking, of your mind. You're a journalist, but also I imagine you're not just a journalist, you're a creative as well.

When this all consumes you, what else can you work on? What else can you can do? I don't feel like you should feel bad about stepping down if you do in any way. Of course there's going to be a backlash because no decision has binary support with these things. There's different people with different views. But I don't think people probably understand how much this has consumed you over the last few years.

Andy Pag: Yeah, that's interesting. I think what I've really enjoyed about the process and what I've found fascinating is the structuring consensus and communicating with groups and that is related to communicating to a big group of people. How do I help them understand the dilemma we face and direct their energies at where the problem is?

Peter McCormack: Ironic really!

Andy Pag: That that is actually what I really enjoyed about this process. Do I enjoy reading Japanese legal statutes, no! Do I enjoy flying 12 hours on a plane to Tokyo and being jet lagged for a week coming back and being jet lagged for another week? Absolutely not. Do I enjoy meeting people who I share this experience with, of having lost all this money and being close to that windfall? That I really do. That I'm really going to miss.

Actually that's one big regret, is that I was looking forward to that day where everybody starts on the forum posting, "oh my God, I just got my payment through from the trustee! Oh Wow, this is brilliant." Then everybody piles in, "yeah, me too!" I could picture that day, I could see it, I could imagine it in my head. I was so excited and looking forward to, not just getting this windfall, but us getting this windfall together. I'm just now at a point where I just don't know when that day is going to come and I can't visualize it anymore.

So my passion is in that, but I've never felt that I am on some justice crusade, that I was wronged and the whole world has to mould to accept that when the trustee has to pay us out, and that will be my vindication. This was an investment, I thought Bitcoin sounded like a cool thing. I've put a bit of money in it back in 2013 and then it grew to this huge sum of money and I thought, "wow, that's amazing what am I going to do with it?" Then it disappeared again and it's, "oh, it's gone." So I think for a lot of people, being a Mt. Gox customer that got "Goxxed", is an identity and they're in it. Then there's a fair amount of principle involved, "I want justice to be done and that looks like me getting the pay-out I deserve."

I can totally understand that. But for me it's not, for me it was an investment. It was a curious investment decision, that's actually done really well and I think back to the amount of money that I first sent to Mt. Gox and what I'm going to get at the end of this month. Over a six year period, I'm doing very, very well, thank you very much.

That's a really good investment anyway you look at it. So I get why people are tribal about this and there's almost this identity politics tribalism around it and that's fine. If you can afford to stand on principle, then I absolutely respect it. But for me it's about the money and this is a way out. It's not the optimum solution. I would much prefer to have the full windfall, but I'm taking a reluctant pragmatic approach to that.

Peter McCormack: So what now? Obviously you've got a process of stepping away, but what are you going to do now mate?

Andy Pag: Me? The forum are in the process of going through and finding someone to take over as coordinator. There are some really good candidates in the forum, some really good people. So I'm very confident that it will be well managed. I think it be down to them. I don't think it's really appropriate for me to say what happens next. I think consensus seems to be though that they're going to look at some kind of low activity, over the next few months while we see if we can get some kind of timeframe on how long this next phase might take.

I would say that if you are a Mt. Gox creditor and customer, then it is really well worth joining the forum, mtgoxlegal.com, because it is just a wealth of information. I see it because there's a Reddit forum and there's a telegram group as well. I just see the difference in the level of discussion on the forum, where people are getting some really good level of quality information and these other platforms where people are second-guessing and putting bits together. I would just really love to see creditors, having the benefit of that information and that's why the series of podcasts you did last month was really, really helpful in that light.

Hopefully this podcast adds to that as well. If you're not already a member of Mt. Gox Legal, I just think for 100 bucks, which is unfortunate that we have to charge something, that goes into a fund which pays for legal fees, the website, managing the group and all the rest of it, it's well worth your money to think about that, if you're going to stick with it. On the other hand, if you're going to sell, the guys that are selling, the agreement I've signed with them, I'm not allowed to say who it is, but if people want to, they can contact me, I'll put them in touch and then they can figure out the details from there.

Peter McCormack: Cool! But personally, career-wise, any plans or just take a holiday?

Andy Pag: Yeah. Well actually this weekend I'm getting the camper van out of storage and Judy, my partner and me, we're planning on heading down to northern Spain and Portugal for a few weeks. She's just finished her job. So it just coincides that we've got a bit of time to take. I'm a really bad kite surfer, which I thought was really cool actually. I've been telling all my friends that I'm into kite surfing and I thought that was really cool.

Then I realized that kite surfing is the new golf. There's all these middle aged businessmen and that generation, when I was a kid, they would all meet at the golf course and that's where they would do their business deals. Now they're all going kite surfing and then doing their business deals as they change out of their wetsuits at the back of the car. So that's taking the sheen off kite surfing for me a little bit, but I still really enjoy it.

So a little bit kite surfing, Julie's big into paddleboarding. We're both terrible surfers. So we're going to take the camper van down to the Atlantic coast and Portugal and find a few little spots on the beach to camp up on them. A bit of a digital detox. Julie's very keen for us to walk the Camino de Santiago, just to reconnect with each other and with... I don't want to sound like a hippy now, but just a reconnection with the world and switch the phone off for a bit!

Peter McCormack: Do you have any ideas career wise, what the next step is for you? Back to journalism?

Andy Pag: Yeah, there's a few projects, all the Brexit stuff that's happening I think is quite interesting. I was involved just part time helping volunteering for a "People's Vote" campaign in Northern Ireland where I live. It looks like the prospects of some kind of vote, whether it's a general election or a confirmation vote on Brexit, that's looking more and more likely.

So if there's a campaign that springs out of that, then I think I'd like to sink my teeth into that. I feel I'm going to get so much backlash, I don't care! I feel like it's my patriotic duty to try and stop the madness that is happening in this country at the moment.

Peter McCormack: Oh, well we won't get into that because...

Andy Pag: Yeah, like it's not controversial enough!

Peter McCormack: Well, do you know what? I voted to remain and I was on the fence. I think it's one of these things also, I was talking about it with somebody yesterday and when doing what I do, I'm always trying to take both positions. So if I interview somebody, I try and take their side and then I try and take an opposing view, just to try and see what the full picture is. To try and get to the bottom of the story and to frame my questions.

Similar as I did, with Mark Karpeles, if you know that and then you go back and listen to the interview, you'll see that I empathize with him, but then I also challenge him. So I do a bit of both. I found myself with Brexit, seeing both sides and I'm now really on the fence. But strangely enough if there was another vote, I think I would vote Brexit.

Andy Pag: Oh really? That's interesting.

Peter McCormack: Because however screwed up the democratic process is and however much people will say, "well we didn't know what we're voting for anything." I kind of feel like we should stick with what we voted for and there's a lot of people argue against me and I see all their points,

Andy Pag: That doesn't seem how democracy works to me. The sort of people that only give you one vote are the likes of Saddam Hussein and Gaddafi, you get to vote them in and then that's it. Democracy is fluid. It's been three, four years. We vote and we have a general election every four years, we're allowed to see how things go and change our minds or stick with it. I don't know. I don't get that logic that a second vote is somehow a denial of democracy or that it's a failure of politics. I think the clusterfuck that is going on at the moment is the failure of politics. I think the second vote is the only way out of it.

Peter McCormack: It is a clusterfuck! But to save us having another hour, let's park this for a coffee! I don't know, have you just seen that Julian Assange has been arrested?

Andy Pag: Oh really?

Peter McCormack: They've gone into the embassy...

Andy Pag: They went into the embassy? Wow.

Peter McCormack: Yeah! They went into the embassy and they've arrested him. So it will be interesting to see how that plays out.

Andy Pag: Very interesting. I wonder what the legal grounds that allowed them to do that are. I think they were probably invited by the Ecuadorians and they probably had enough. I'm going to get straight on my phone and have a look.

Peter McCormack: Well listen, thanks for this Andy. Have you got any final comments? Any closing thoughts you want to add?

Andy Pag: No, I can't think of anything. I think we've pretty exhaustively covered it all. I suppose the last thing is I just wish people well, whatever they decide, whether they are going to sell or hold, I just really hope, a few people have said like, "oh, that's a dumb decision, Bitcoin price is going to go up to $100,000 and we're going to all do really well out of it." I really hope that's true.

I really hope that whatever decision people make, it works for them and it's the right one for them and that they're successful at it. I think customers of Mt. Gox have been through the wringer and been played by a number of people over the course of these last five years and they really do deserve to have a nice juicy pay-out at the end of it. I really hope they get that. So I just wish everybody well really, whatever they decide.

Peter McCormack: Well, look, I appreciate you coming on again and stay in touch. I wish you all the best mate and I appreciate everything you've done to help me get the series out before. This will go up on Saturday. I assume we won't speak about this again, but we should definitely meet up and have a chat about various things.

Andy Pag: Looking forward to that. I'm counting on it!

Peter McCormack: All right mate. Well listen, enjoy the trip with your partner, Julie. I think you're going to have a lovely break. I'm a little bit jealous, but have a great time!

Andy Pag: Okay. All the best!