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Draft Rehabilitation Plans Underway for Mt. Gox Creditors

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Dec 16, 2020
Draft Rehabilitation Plans Underway for Mt. Gox Creditors

After a wait of 5 years, it now appears that users of the notorious Mt. Gox exchange could finally be getting their funds back soon. The trustee of the exchange, Nobuaki Kobayashi filed a draft rehabilitation and it indicated that the exchange will return the funds of its creditors either in the form of cryptocurrencies or cash. They have already given approval for compensation of around 803.512 Bitcoin and 792.296 Bitcoin Cash to the victims who had lost their money when the exchange had been hacked back in 2014. As per the initial announcement that was made on the exchange’s website, the rehabilitation plans will be reviewed by the Tokyo District Court and an examiner before they decide whether to proceed with them or not.

Almost six years ago, the Mt. Gox exchange had been ruling the market and was the world’s most popular Bitcoin exchange. It had had a huge accumulation of Bitcoin and its user base was also quite massive. Almost 50% of the total Bitcoin trading volume was handled by the exchange. However, it suffered from, perhaps the biggest crypto hack against any company in history in two series of attacks. After the two hacks that occurred in 2011 and 2014, the exchange had lost a combined number of 1.35 million Bitcoin.

In order to avoid a total loss, the creditors had made a petition against the company. They had petitioned the officials who were handling the exchange’s bankruptcy for allowing the firm to settle the matter under civil rehabilitation. The deadline for the rehabilitation submission had been postponed a number of times and the creditors believe that this submission would be the last one before they are able to claim a part of their funds. This move comes after another approval had been given in October for extending the submission deadline. 

However, the submission date for the rehabilitation plans that were chosen by the latest deadline was December 15th, 2020, after they had already shifted deadlines in April last year and March 2020. It wasn’t long after the 2014 hack that the customers and users of the Mt. Gox exchange had begun to ask the company to return their funds. But, they haven’t gotten any of their funds since then, and neither have they compensated them in any way. The responsibility of managing the civil reimbursement process was handed over to Kobayashi, the Japanese lawyer. He stated that they have around 150,000 BTC that can be used to pay users. 

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There are other exchanges that have also suffered from hacks like Mt. Gox, but not of the same magnitude. On December 9th, Cryptopia, another defunct crypto exchange had started its fund reimbursement process to users after they had been hacked last year. While the rehabilitation plan doesn’t provide any details, users have greeted the announcement with excitement and relief, as it means that they are closer to getting back their funds. The reimbursement funding that’s coming from the exchange is via Bitcoin cash that was generated through Bitcoin’s hard fork.

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