Mt. Gox Creditors Release Update of Civil Rehabilitation Plan

Creditors of Mt. Gox, the defunct bitcoin exchange, have announced an update to the civil rehabilitation plan agreed upon with the platform, according to a statement published on the group’s website.  

The updated terms are said to be in line with the latest court position in the ongoing legal proceedings, including a confirmation that compensation must be paid to victims in bitcoin and bitcoin cash.

Background

Between 2011 and 2014, Mt. Gox is estimated to have lost over 850,000 BTC, worth approximately $460 million at 2014 prices. Based in the upmarket Tokyo district of Shibuya, Mt. Gox was once the undisputed king of cryptocurrency exchanges, at one point controlling as much as 70 percent of the global bitcoin exchange market. By the middle of 2013, however, the platform had run into trouble, and, despite all assurances to the contrary, the company closed abruptly in February 2014, ceasing all trading and exchange operations, closing down its website and filing for bankruptcy protection under Japanese law.

Former CEO Mark Karpelès was arrested, and a civil rehabilitation plan was agreed to serve as a framework for ensuring creditors get their money back.

New Conditions

A few notable changes to the initial terms have been made, mostly concerning method and priority of payments to creditors. According to the updated terms, Mt. Gox shareholders are ranked behind its creditors regarding payment priority.

The statement reads:

“No distribution will be made to shareholders. Mt. Gox is not capable of returning all BTC deposited by creditors. Accordingly, we consider that all assets of Mt. Gox should be distributed to creditors and not to shareholders.”

Furthermore, disbursements will be made in bitcoin and bitcoin cash for ease of payment and to avoid the acceptance issues faced on many exchanges by several altcoins.

The update also stipulates that payments would be made after the approval and confirmation of the rehabilitation plan.

“Creditors have been waiting for payment to be made for as long as four years since Mt. Gox was bankrupted. Payment to creditors should be made as soon as possible. We are of the opinion that most of the assets, including approximately 166,000 BTC and 168,000 of BCH and other derivatives currently held by Mt. Gox, should be paid to creditors at the time of the first payment.”

Finally, the update states that Mt. Gox will find a way to give creditors access to their trading records, which it describes as “indispensable for the approval or disapproval of the civil rehabilitation plan.”