Mt. Gox Estate Announces Claim Process for Creditors - Bitsonline

Mt. Gox Estate Announces Claim Process for Creditors

Mt. Gox trustee Nobuaki Kobayashi has published instructions for victims of the Mt. Gox hack and embezzlement to submit claims for compensation. In news sure to be welcomed by Mt. Gox’s creditors, the civil rehabilitation proceedings that replaced the bankruptcy process in June may enable them to receive bitcoin, rather than Japanese Yen.

Also read: China Blocks Access to More Foreign Exchanges in Ongoing War on Crypto

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Victims Have Until October 22nd to File Claims

The trustee of the Mt. Gox estate has set a deadline of October 22nd for victims to submit evidence of losses through an online form. Users unable to use the online submission procedure can send their applications in by post.

In June, the Tokyo District Court ceded to Mt. Gox creditors’ petition to drag the company out of bankruptcy and into “civil rehabilitation”. Mt. Gox filed for bankruptcy in February, 2014 after claiming losses of nearly half a billion dollars worth of its customers’ and its own bitcoin, as well as fiat reserves.

Mt. Gox

Under Japanese bankruptcy laws, insolvent companies’ non-cash assets are frozen for liquidation at their value at the time of the bankruptcy filing. Mt. Gox’s thousands of victims have sought compensation in bitcoin, not fiat. At the end of 2017, creditors filed a lawsuit to have the company enter civil rehabilitation, granted early this year.

Given bitcoin’s substantial price gains since the hack, paying the victims back in bitcoin is far more beneficial to them. While a payout in crypto is not guaranteed under civil rehabilitation, the process is far more flexible than bankruptcy proceedings.

The Company Has a Mountain of Assets

Mt. Gox trustees recovered 202,000 BTC (now worth over $1 billion USD) of the total losses of 850,000. It also has significant holdings of bitcoin cash. Had Mt. Gox remained under bankruptcy protection, CEO Mark Karpeles — himself also a creditor — would have received millions of dollars worth of bitcoin as a company shareholder.

That is because Kobayashi calculated losses at approximately $483 per bitcoin — the value of bitcoin at the time of the bankruptcy filing. The remaining assets, less trustee expenses, would be returned to shareholders. Given current bitcoin values, creditors’ fiat returns would have amounted to only around 40,000 bitcoin — leaving roughly 160,000 BTC for the shareholders.

The Promise of an End to the Sorry Mt. Gox Tale?

The Mt. Gox hack, while since being overtaken in dollar value significance by the Coincheck hack early this year, remains the single-most tumultuous event to rock the fledgling cryptocurrency industry. With the final list of approved and rejected claims to be submitted by the trustee to the court on January 24th next year, there may finally be an end in sight for the five-year saga surrounding the pioneering exchange.

Sound off below. Are you a Mt. Gox creditor? Have you been happy with how the matter has been handled since it was moved to civil rehabilitation?

Images via Pixabay

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