x
Verified on Po.et Created with Sketch. Verified on Po.et

Mt. Gox Creditors May Be Reimbursed in Bitcoin Under Civil Rehabilitation

by

        Mt. Gox Creditors to Be Reimbursed in Bitcoin Under Civil Rehabilitation
Mt. Gox Creditors to Be Reimbursed in Bitcoin Under Civil Rehabilitation

The Japan-based Mt. Gox exchange had its bankruptcy stayed due to a petition filed by some of the creditors for the commencement of civil rehabilitation proceedings in Tokyo District Court on November 24, 2017, and heard today, June 22, 2018.

Mt. Gox was forced into criminal bankruptcy after more than $473 million in bitcoin was stolen from the exchange in 2014. This latest petition filed by the creditors provides for more options on how they can be reimbursed.

At issue primarily is the exchange rate of bitcoin at the time of the hack, approximately $480 per bitcoin. By staying in criminal bankruptcy, the creditors would have been paid back at the exchange rate at the time of the filing; but bitcoin has risen in value significantly since then, trading at over $6,100 per bitcoin today. This change means that creditors could be paid in terms of the amount of bitcoin lost and not the value of the bitcoin at the time of the loss: a significant difference.

Attorney Nobuaki Kobayashi will act as the civil rehabilitation trustee, but he is not without his own controversy. Kobayashi is responsible for selling large amounts of bitcoin to pay off the exchange’s JPY liabilities; those sales also coincided with dramatic drops in the price of bitcoin.

In the filing, Kobayashi said, “The power and authority to administer and dispose of MTGOX’s assets is still vested exclusively in me, and I will implement the civil rehabilitation proceedings, including the administration of MTGOX’s assets and the investigation of claims, subject to the Tokyo District Court’s supervision.”

Cryptoground continues to monitor the Mt. Gox wallets, which are currently worth nearly a billion dollars, but, as stated in the Tokyo District Court administration order, Mt. Gox’s representative has lost the right to administer and dispose of Mt. Gox’s assets. According to the filing, the proceedings will likely begin in February 2019.

Interested creditors must file a proof-of-claim form by October 22, 2018, even those who filed a claim during the criminal bankruptcy. For any creditors that missed filing during the criminal bankruptcy, this is a new window of opportunity to file. The details can be found in this document on the Mt. Gox website.

Recommended

QuadrigaCX CEO Widow Sells Estate Assets, Reportedly Places Others in Trust

Jennifer Robertson has been selling assets of the late Gerald Cotten's estate, and she's allegedly shuffled some of these assets into a trust for legal protections.

Colin Harper

Judge Delays Decision to Appoint Legal Counsel for QuadrigaCX Creditors

During the session, the Honorable Justice Michael Wood heard testimonies from the four law firms that creditors have turned to for counsel as they seek recovery of funds from the troubled Canadian bitcoin exchange.

Colin Harper

QuadrigaCX Sent Deposits Allegedly Linked to CEO’s Widow, Mailed Withdrawals in Cash

Emails suggest that some clients of QuadrigaCX may have received deposits from entities associated with Jennifer Robertson, despite sworn claims that she had nothing to do with the exchange's operations prior to her husband's death.

Colin Harper

First QuadrigaCX Monitor Report: $460k in BTC “Inadvertently” Sent to Cold Wallet

The court document states, “On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $468,675 to Quadriga cold wallets which the Company is currently unable to access.”

Colin Harper