Mt Gox Creditors Are Preparing to Claim for Bitcoin Repayments

A group of creditors of the now defunct bitcoin exchange Mt. Gox have started preparing a rehabilitation plan to claim for bitcoin repayments.

Aug 3, 2018 at 6:33 a.m. UTC
Updated Sep 13, 2021 at 8:14 a.m. UTC

A group of creditors of the defunct bitcoin exchange Mt. Gox have started preparing to claim for bitcoin repayments following a court's decision in June.

Lawyers representing several Mt. Gox creditors – who filed a petition in November to move Mt. Gox out of bankruptcy and into a process of civil rehabilitation – on Thursday published an updated proposal for the process.

The lawyers released an initial basic policy for the rehabilitation on June 29, just a week after a court in Tokyo approved the creditors' petition for civil rehabilitation entered late last year.

The policy stated in June that it would be "appropriate" to repay creditors who deposited BTC and BCH with Mt. Gox in the same cryptocurrencies instead of cash.

In the latest update, the lawyers further asserted that it would be desirable that these "BTC and BCH be sent to exchanges in which many creditors have accounts or can open accounts easily," adding:

"We are of the opinion that most of the assets, including approximately 166,000 BTC and 168,000 of BCH and other derivatives currently held by Mt. Gox, should be paid to creditors at the time of the first payment."

Those assets could be worth over $1.3 billion, based on latest data from CoinDesk's price index.

The revised policy stated that the first payments to creditors are expected to start in May or June 2019, if the rehabilitation plan can be approved, that is.

Currently, the lawyers representing the group of creditors are seeking further feedback before a formal rehabilitation plan can be finalized and presented to the court by February of next year.

In addition, the revised proposal stated that cryptocurrencies other than BTC and BCH held by Mt. Gox should be liquidated into cash and paid to creditors since their prices could fluctuate significantly and security risks may arise if they are moved around from wallet to wallet.

Mt. Gox, once the world's largest bitcoin exchange by trading volume, declared bankruptcy in 2014 after over 744,000 BTC were stolen. Subsequently, creditors went into a years-long process in a bid to retrieve their trapped funds.

Amid bitcoin's price spike to close to $20,000 late last year, a group of creditors filed a petition to the bankruptcy court in Tokyo to move the case into civil rehabilitation.

Mt. Gox's trustee was then holding 202,195 bitcoins and then liquidated over 30,000 of them into cash in March 2018. The court's approval of the civil rehabilitation petition means that Mt. Gox will no longer need to liquidate any BTC or BCH assets.

Nobuaki Kobayashi, the rehabilitation trustee, said in July that a new system for creditors to file proof for claiming repayments is expected to be released in August.

Japanese yen and BTC image via Shutterstock

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

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

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
5 Key Takeaways From a16z's State of Crypto Report

The venture firm is extremely bullish on Web 3.

The venture firm is extremely bullish on Web 3.

CoinDesk - Unknown
2
CoinDesk - Unknown
Regulators Are Paying Attention to UST

The collapse of terraUSD (UST) is algorithmic stablecoins’ Libra moment.

The collapse of terraUSD (UST) is algorithmic stablecoins’ Libra moment.

CoinDesk - Unknown
3
CoinDesk - Unknown
San Francisco NFL Player Alex Barrett Taking His Salary in Bitcoin

The most valuable crypto stories for Thursday, May 20, 2022.

The most valuable crypto stories for Thursday, May 20, 2022.

CoinDesk - Unknown
4
CoinDesk - Unknown
Justin Sun Still Thinks Algorithmic Stablecoins Are a Good Idea

The crypto mogul also said LUNA and UST might make good "meme coins," he said on CoinDesk TV’s “First Mover.”

The crypto mogul also said LUNA and UST might make good "meme coins," he said on CoinDesk TV’s “First Mover.”

CoinDesk - Unknown