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Defunct crypto exchange Mt. Gox is finalizing the steps for its rehabilitation payout scheme to creditors who lost money to the firm’s collapse.
Creditors of the defunct crypto exchange Mt. Gox are close to receiving reimbursements due to a rehabilitation plan that has now been finalized. A Japanese court ruling brought an end to a years-long saga in the crypto industry – that saw creditors lose money when Mt. Gox collapsed back in 2014.
Mt Gox trustee Nobuaki Kobayashi confirmed the payment finalization in an announcement that read:
“The Rehabilitation Trustee would like to express sincere gratitude to all involved parties for their understanding and support, which led to the Rehabilitation Plan becoming final and binding. The Rehabilitation Trustee will then make repayments to rehabilitation creditors holding allowed rehabilitation claims in accordance with the Rehabilitation Plan”.
This follows the approval of a large majority of creditors on October 20th, approximately 99% of those affected by the exchange’s collapse. In addition, claimants accounted for about 83% of the total amount that makes up the voting rights, voting in affirmation. However, there are currently no announcements of timing and a specific amount of repayments slated for disbursement.
Current estimates suggest that the payout will be worth about $8.5 billion. Regardless, it is still unclear whether the payments will be in the form of Bitcoin (BTC) or fiat money. As of September 2019, the trustee was in possession of a trove of 141,686 Bitcoin, Bitcoin Cash, and fiat assets.
The Mt. Gox rehabilitation plan, first filed in the Tokyo District Court back in February, requires investors to provide certain details to access payment. These include their bank accounts and other unique information. According to reports, any payout will be a fraction of the original amounts held by creditors, after factoring in the lost coins.
The Mt. Gox Rehabilitation Journey Thus Far
Mt. Gox collapsed back in 2014 amid several allegations of financial infractions, including fraud and mismanagement of funds. The exchange platform suspended all trading and went offline after losing approximately 850,000 Bitcoins, valued at $500 million at the time. In addition, company chief executive officer Mark Karpeles faced accusations of data falsification and embezzlement.
Eventually, the court found guilty of falsifying records and levied a suspended prison sentence. Shortly after, Mt. Gox caved in and filed for bankruptcy. Thousands of Mt. Gox users lost vast sums of money said to be worth billions of dollars. Subsequently, in 2018, a petition to compensate creditors for the exchange’s collapse saw the light of day. This is now what seems to be drawing to a conclusion following the latest rehabilitation developments.
Kobayashi suggested that users who filed claims would most likely receive compensation swiftly as at when due. However, this seems to contradict what some other affected users are alleging. They cite that they are experiencing infrequent communication regarding the rehabilitation plan, and thus question the suggested timing of payments.
After Mt. Gox’s demise, several other crypto exchanges have risen to prominence and seem to be on surer footing. They include Binance, Coinbase, and Crypto.com.