Mt. Gox Deadline Extended Again After Creditors Criticize Refund Proposal

Mt. Gox's bankruptcy trustee is holding off on filing a civil rehabilitation plan to the Tokyo District Court after creditors took issue with it.

AccessTimeIconMar 31, 2020 at 6:00 a.m. UTC
Updated May 9, 2023 at 3:07 a.m. UTC

The submission deadline for the Mt. Gox rehabilitation plan has been pushed back again after a draft proposed last week was met with opposition from numerous creditors.

In the plan, proposed to Mt. Gox creditors at a March 25 meeting, rehabilitation trustee Nobuaki Kobayashi said he would, if authorized by the court, sell off some of the recovered cryptocurrencies in order to settle prioritized fiat currency claims.

  • Meme Coin Liquidity Hits Record High
    00:46
    Meme Coin Liquidity Hits Record High
  • How Ledger Stax Plans to Make Self-Custody More Mainstream
    16:42
    How Ledger Stax Plans to Make Self-Custody More Mainstream
  • Why Dogecoin Is a 'Weird' Investment
    16:39
    Why Dogecoin Is a 'Weird' Investment
  • AI Tokens Surge as Nvidia Becomes World’s Most Valuable Company
    00:47
    AI Tokens Surge as Nvidia Becomes World’s Most Valuable Company
  • Creditors would have the option of receiving reimbursement in bitcoin (BTC), but the rehabilitation proposal says it was possible there would be an "insufficient amount" to settle all claims. As the trustee has ruled out making any additional purchases of bitcoin, some creditors would likely receive part of their claim in fiat currency, the plan said.

    But Kobayashi's proposal received significant pushback from creditors, not least because most creditors want to be reimbursed in bitcoin.

    Alex Ortega, managing principal of Iverson Capital Group, the first company to buy Mt. Gox creditor claims in 2016, told CoinDesk that many creditors were dissatisfied with the rehabilitation plan and felt the trustee should not be allowed to sell recovered bitcoin in order to settle fiat currency claims first.

    "[M]ost of these creditors are generally bitcoin specialties themselves who want to remain in the market; so to sell off BTC and pay them in fiat not only locks them into a price at exit and caps their potential upside but also would lead to a sell-off in the market, which, as happened in 2018, can get messy," Ortega said.

    Mt. Gox declared bankruptcy in 2014 after hackers stole 850,000 bitcoins from its servers. What now comprises the Mt. Gox estate was originally 200,000 bitcoins found in an old-format wallet shortly after the exchange collapsed.

    At last count, the Mt. Gox estate held approximately 141,600 bitcoin (~$900 million) and 142,800 bitcoin cash (BCH) (~$31.2 million). Kobayashi sold off as much as $400 million worth of recovered bitcoin in early 2018 on the open market, plunging many cryptocurrencies down.

    Following the meeting, the Tokyo District Court granted a request Friday for a deadline extension from Kobayashi. In a statement Monday, Kobayashi said he needed time to address some "matters that require closer examination."

    The Tokyo District Court had already extended the deadline in October 2019, which pushed the submission date to March 31, 2020.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.