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 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