Mt.Gox Victims to Finally Get Paid in Bitcoin as Case Goes to Civil Rehabilitation
Victims of the infamous Mt.Gox hack that shook the cryptospace in 2014 are yet to get reimbursed. However, there is a glimmer of hope for creditors as the Tokyo District Court has approved a petition to move the ongoing case from criminal bankruptcy to civil rehabilitation.
Get Paid in Bitcoin
According to a statement on the Mt.Gox website on June 22, 2018, the Tokyo District Court has given its nod concerning the commencement of civil rehabilitation proceedings for the infamous bitcoin exchange.
In November, anonymous creditors behind the Mt.Gox saga filed a petition to end the bankruptcy, opting for civil rehabilitation instead.
The approval represents a significant victory for creditors as some of them will now be paid in bitcoin instead of getting the fiat equivalent of their investment in 2014. In other words, victims of the heist would have been refunded using the exchange rate of bitcoin in 2014 which was roughly $440, and the remaining funds would have been given to the owners of the exchange. An event that would have gifted CEO Mark Karpeles and his team billions of dollars, considering the current price of bitcoin.
The document stated:
“In bankruptcy proceedings, non-monetary claims are converted into monetary claims on the commencement of bankruptcy proceedings. However, in civil rehabilitation proceedings, non-monetary claims are not converted into monetary claims at the time of commencement of the civil rehabilitation proceeding. Therefore, in the civil 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.”
The Journey so Far
After surviving a June 2011 hack that saw cyberpunks cart away with the equivalent of $8.75 million in bitcoin, another colossal heist of $460 million happened in early 2014 and this time, the exchange had no choice but to file for bankruptcy.
Per insider sources close to the matter, the Mt. Gox attack was due to the incompetence of the CEO and majority stakeholder, Mark Karpeles who they say had more talent as a programmer than as a company executive and yet would even neglect his technical duties at the exchange at times.
“Mark liked the idea of being CEO, but the day-to-day reality bored him,” said an anonymous insider source said at the time.
In February 2014 Karpeles confirmed the firm could no longer carry on, as a vast amount of peoples funds had vanished.
“We had weaknesses in our system, and our bitcoins vanished. We’ve caused trouble and inconvenience to many people, and I feel deeply sorry for what has happened,” Karpeles said at a Tokyo press conference at the time.
Notably, on August 21, 2015, BTCManager reported that Japanese police had arrested Karpeles for allegations of fraud and embezzlement.
Interestingly on March 7, 2018, Tokyo attorney and Mt. Gox bankruptcy trustee, Nobuaki Kobayashi revealed he had dumped bitcoin and bitcoin cash worth roughly $400 million into the market since September 2017, a move many argue has contributed its bit to the endless bearish trend.
Not Yet Over
While the document clearly states there will be no more sales of the Mt.Gox assets anytime soon, the creditors have been given until October 22, 2018 to submit their proof of rehabilitation claims and users are advised to take note of their usernames and passwords registered on the system as it would assist the authorities in verifying and settling their claims. The civil rehabilitation proceedings are scheduled to last until February 2019. In essence, the victims still have to wait for several months again before getting their bitcoins.