Mt. Gox Crypto Exchange Begins Civil Rehabilitation Proceedings, Ends Bitcoin Sell-Offs
Mt. Gox will not sell any more Bitcoin to repay creditors after swapping bankruptcy proceedings for civil rehabilitation.
A statement and accompanying documentation confirm the move, which will see attorney Nobuaki Kobayashi act as civil rehabilitation trustee.
Kobayashi was responsible for selling vast tranches of Bitcoin reserves beginning Q4 last year to reimburse Mt. Gox users who lost money in the exchange’s mass hack in late 2013. The sell-offs appeared to have a conspicuous effect on markets, Bitcoin prices tumbling immediately following each transaction, which Kobayashi performed on major exchanges.
“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,” Kobayashi wrote in the new documentation.
However, due to the bankruptcy proceedings now being halted as part of the civil rehabilitation, Kobayashi will not sell any further bitcoins, with users set to receive compensation in BTC instead of fiat currency as originally intended.
“...In the civil 2 rehabilitation proceedings in this matter, claims seeking a refund of Bitcoins (“Bitcoin Claims”) will also not be converted into monetary claims after the commencement of the civil rehabilitation proceedings,” Kobayashi continues.
Court approves Mt. Gox civil rehab. Mostly good news:— Yuji Nakamura (@ynakamura56) June 22, 2018
1) Trustee won’t sell more BTC
2) Creditors receive BTC (not JPY) in early-mid 2019
3) Everyone must refile claims by Oct
4) Bad news: some creditors will sell BTC, so that will hang over market next yrhttps://t.co/gc8SW5tnER https://t.co/3AC49MvEVI
Reacting to the news, a group of claimants who had established Mt. Gox Creditors lobby group out of dissatisfaction with progress considered it a mixed blessing.
“...Enormous assets, which were to be distributed to Mt. Gox’s shareholders under the bankruptcy proceedings, will be returned to creditors of Mt.Gox in civil rehabilitation proceedings. This is the creditors’ victory,” a statement from the group reads.
“...However, this victory has not been realized yet. The victory will come to creditors when Mt. Gox makes payment to creditors and creditors actually receive such payment.”
Mt. Gox became infamous in the crypto industry after suffering a hack, followed by a collapse in 2014, resulting in the loss of $473 million worth of customers’ money - the single largest loss of funds in the history of crypto until this year’s $534 million Coincheck hack.