Mt.Gox starts accepting filings by creditors of proofs of rehabilitation claims

On August 23, Mr. Nobuaki Kobayashi, the Rehabilitation Trustee of cryptocurrency exchange Mt.Gox, announced that Mt.Gox will start accepting filings by creditors of proofs of rehabilitation claims.

The deadline is October 22 and creditors can file proofs of rehabilitation claims online via the Mt.Gox website.

Mt.Gox lost about 850,000 BTC belonging to customers (valued at roughly JPY 48.0 billion at that time, or equivalent to about USD 432 million) due to illegal access in 2014, and subsequently filed for bankruptcy protection. About 200,000 BTC remained at the time of the bankruptcy, and lengthy bankruptcy proceedings have been ongoing for their distribution.

Due to various changes in the environment since 2014, including a surge in BTC prices, Mt.Gox decided to suspend bankruptcy proceedings on June 22, 2018 and start rehabilitation proceedings. This also changed the method of repaying creditors. Under the bankruptcy proceedings, Mt.Gox planned to repay creditors by converting BTC into cash at the market rate at the time of the bankruptcy. However, the move to civil rehabilitation proceedings allows Mt.Gox to repay in BTC.

While Mt.Gox had sold BTC several times to repay creditors, the Rehabilitation Trustee is no longer able to sell or buy BTC due to the move to rehabilitation proceedings. Because the sale of a large amount of BTC is believed to have affected its market price, the start of rehabilitation proceedings is largely viewed as a positive development.

The first payment is scheduled for May or June 2019. Considering that Mt.Gox before bankruptcy was regarded to be the world’s largest cryptocurrency exchange, whether or not 200,000 BTC owned by Mt.Gox will be returned appropriately to creditors is attracting growing attention.