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Mt Gox Ordered to Repay Victims of 850,000 Bitcoin Hack

Mt Gox Ordered to Repay Victims of 850,000 Bitcoin Hack

The Tokyo District Court has ordered Mt Gox to begin compensating victims of its infamous 2014 hack, effectively stalling the exchange’s pending bankruptcy.

Posted on the Mt Gox website June 22, the ruling may bring closure to a November 2017 petition requesting compensation — filed by creditors of the now-defunct Mt Gox exchange.

Crucially, victims will be compensated in accordance with civil rehabilitation law — not bankruptcy.

Tokyo Whale Prepares 8,000 BTC Dump as Crypto Bloodbath Continues
Related Story: Tokyo Whale Prepares 8,000 BTC Dump as Crypto Bloodbath Continues

If reimbursed under the domain of a Japanese bankruptcy proceeding, victims would only be compensated in fiat equivalent of “non-monetary” claims based on value at time of bankruptcy. Based on Mt Gox’s 2014 filing, this would amount to a payout of approximately $483 per Bitcoin. As of June 27, 2018, one Bitcoin is worth $6127.

While belated, the stalled repayment may be in financial favor of creditors. One Twitter user pointed out:

Instead, civil rehabilitation proceedings do not recompense in equivalent fiat value but pay out in the original asset lost. This would entitle hack victims to claim their lost Bitcoins, and cash in on the triple-digit percentage hike the coin has seen since the hack.

The move may quell some of the flames engulfing Mt Gox’s bankruptcy drama.

Despite losing some 850,000 BTC in the 2014 hack, Mt Gox’s remaining holdings may have comfortably paid out creditors in full — with 137,891 BTC held in the exchange’s cold storage at the time of press. Under Japanese bankruptcy law, however, the bulk of the Tokyo-based company’s assets would have been distributed amongst shareholders.

Has the Tokyo Whale Been Beached?

Previously overseeing Mt Gox’s bankruptcy proceedings, attorney Nobuaki Kobayashi is now acting as the exchange’s Civil Rehabilitation Trustee. Dubbed the ‘Tokyo Whale’, Kobayashi has repeatedly been criticized for purportedly devaluing Bitcoin when he liquidated thousands of Mt Gox Bitcoins on exchanges.

Kobayashi, however, has steadfastly maintained that the sales did not affect price action. Reminding users of this apparent truth, the announcement states:

“As in sales from December 2017 to February 2018, upon consultation with cryptocurrency transaction experts, Bitcoin and Bitcoin Cash were sold in a manner that had no effect on market price and not by ordinary sale on an exchange.”

While some have interpreted the ruling as a red light for Kobayashi to sell any more assets, the legal document did not provide this evidence. In fact, Kobayashi highlights his continued authority in the announcement:

“The power and authority to administer and dispose of MTGOX’s assets is still vested exclusively in me, and I will implement the civil rehabilitation proceedings, including the administration of MTGOX’s assets and the investigation of claims, subject to the Tokyo District Court’s supervision.”

Those who lost Bitcoin in the hack will need to file claims by October 2018, however, no official schedule has been set for payments.

Bitcoin | BTC

Updated: Feb 29 at 7:58 pm UTC

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Cover Photo by Alex Knight on Unsplash

Posted In: , , Crypto Exchanges, Price Watch

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Jonnie Emsley

Jonnie Emsley

Fintech Journalist @ CryptoSlate

Jonnie is a writer and blockchain enthusiast based in Ho Chi Minh City, Vietnam. Discovering new corners of the world and emerging tech trends makes him tick.

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