In 2014, Mt.Gox declared bankruptcy after losing over 744,000 Bitcoin in a large-scale hack. Released August 1, 2018, Mt.Gox creditors revised their proposal to claim Bitcoin repayments and expedited compensation procedures.
Creditors to Be Paid in BTC and BCH
Lawyers representing Mt.Gox creditors released an initial proposal for rehabilitation proceedings on June 29, 2018. The policy stated that all Mt.Gox assets would be distributed to creditors and “full payment to the monetary creditors will be made.”
Creditors who deposited Bitcoin would be repaid in BTC and BCH, instead of cash. However, the policy also mentioned that Mt.Gox does not have enough BTC to return all Bitcoin deposited by creditors.
“Mt.Gox is not capable of returning all BTC deposited by creditors. Accordingly, we consider that all assets of Mt.Gox should be distributed to creditors and not to shareholders.”
In the revised policy update, lawyers representing Mt.Gox creditors stated that “BTC and BCH be sent to exchanges in which many creditors have accounts or can open accounts easily.” The revised policy further states that all assets currently held by Mt.Gox, including 166,000 BTC and 168,000 BCH, be paid to creditors immediately following the procedure’s approval.
Currently, the aforementioned assets are worth approximately $1.3 billion, according to data by CryptoSlate.
Creditors who deposited cryptocurrencies other than BTC will be repaid in cash, due to the volatility of altcoins and the security risks involved with transferring assets from wallet to wallet.
So far, Japanese courts have supported creditors’ demands and set the deadline for a finalized civil rehabilitation plan on February 14, 2019. The plan’s decision will be released at the next court date currently scheduled for May or June 2019. If approved, the initial repayments to creditors will be made shortly after.
Lawyers representing the creditors are currently accepting public comment for further revision of the rehabilitation plan before a finalized submission is made in February 2019.
After four years of waiting, Mt.Gox creditors are eager to see that their digital assets are restored, and this revised policy marks a positive step towards reconciliation and the future prevention of illicit cryptocurrency exchange activity.
Cover Photo by Billy Williams on Unsplash