By
Steve Muchoki
April 19th, 2024
The Mt. Gox trustee has led the extension of the rehabilitation plan multiple times with the recent ones dating back to March 31, 2020.
The Tokyo District Court has approved a request filed by the trustee of the Mt.Gox rehabilitation plan, Nobuaki Kobayashi to postpone the process yet again to December 15, 2020. According to the official announcement on the deadline extension, it was cited that the extension was necessary to address some issues that need a closer examination to resume a smooth process.
This has raised some questions as to why the submission keeps being postponed with the recent reason for an extension being not much different from that of the previous postponement.
The Mt. Gox trustee has led the extension of the rehabilitation plan multiple times with the recent ones dating back to March 31, 2020. The rehabilitation plan was extended again to July 1, 2020, followed by another extension to October 15, 2020, before the recent development to December 15. The Mt. Gox rehabilitation plan proceedings began in 2018 after years of legal struggle in a bid to ensure that creditors get a refund of their holdings in cryptocurrency value at the time the exchange collapsed rather than their fiat value. According to some claims, the many submission extensions suggests that there may not be enough funds to settle all creditors.
Mt. Gox was a Japan-based cryptocurrency exchange founded in 2010 and at a point handled over 70% of all Bitcoin transactions worldwide. Unfortunately, the company halted all operations and filed for bankruptcy protection from creditors in February 2014, and also opened liquidation proceedings in April 2014. Mt. Gox announced that a total of 850,000 Bitcoins worth $450 million at that time had been stolen from which 200,000 BTC have been recovered. Evidence presented by WizSec, a Tokyo security company in 2015 suggested that most of the stolen Bitcoins belonging to the customers and the company started being transferred from the company’s wallet way back in 2011.
In 2018, the Tokyo District Court revisited the case and halted the Mt. Gox bankruptcy to commerce with a civil rehabilitation plan. This means the creditors have a chance of being paid in the company’s actual asset rather than fiat.
BTC and BCH Payment Saga in the Mt. Gox Rehabilitation Plan
According to the underlying process, claims that are requested to be paid in BTC and BCH will surely be honored duly. However, claims that request for payment in digital assets other than BTC and BCH will be paid in cash. It has also been said that the rehabilitation plan trustee has decided to liquidate some of the digital assets to have enough fiats to cover the payout. The liquidation decision means that some of the creditors will have to prepare to receive their refunds in fiat order than their expected BTC and BCH.
Amid the Mt. Gox rehabilitation plan submission extension, some companies have taken initiatives to purchase a fraction of the original claims from the creditors. Recently, Fortress Investment Group requested to purchase the creditors’ claims with 88% of its estimated account value.
Mark Karpeles, the CEO of the defunct Mt. Gox company is still pleading with the court to drop all charges against him as he claims to have no hand in the security breach that resulted in the loss of funds.