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.
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.