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.