Defunct Bitcoin Exchange Platform ‘Mt. Gox’ Opens Civil Rehabilitation Proceedings

Defunct Bitcoin exchange platform, Mt. Gox, has announced the commencement of civil rehabilitation proceedings for victims of the Mt. Gox hack. This announcement has given hope to creditors that they might soon recover their stolen funds.

A Long Time Coming

According to an announcement on Thursday (August 23), victims of the Mt. Gox hack could file “proofs of rehabilitation claims” for the eventual return of their stolen cryptocurrency. The announcement is an update to the rehabilitation plan released by Mt. Gox earlier in August.

The Rehabilitation Trustee listed two ways victims could go about the application process. The online method enables users across the world to easily participate in the Civil Rehabilitation Proceedings without using time or cash. This method can be carried out through filing proofs of Exchange-Related Rehabilitation Claim, per the Civil Rehabilitation Act of Japan and other laws and ordinances.

Apart from the online method, another means available is the Proof of Rehabilitation Claim Form (offline method). This option is provided for users who cannot use the online method. Users will have to download a form, input all necessary data, and send a printed version, with their signature. The completed form will be sent to the office of the Rehabilitation Trustee by post. The press release, however, advised users to file a proof of rehabilitation claim using the online method if possible.

The Tokyo District Court set the deadline for filing proofs of rehabilitation claim on October 22, 2018.

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The Final Salvo in the Mt. Gox Bitcoin Exchange Saga

Japanese cryptocurrency exchange, Mt. Gox was launched in 2010 and grew to become the world’s biggest exchange. Things became sour for the company when it claimed in 2014 that it was hacked and lost almost $500 million. In February 2014, the company filed for bankruptcy. On August 1, 2015, CEO of Mt. Gox, Mark Karpelès was arrested by the Japanese police and charged with fraud and embezzlement of funds.

The company filed for bankruptcy, citing liabilities of approximately $64 million and assets nearing $38 million. When bankruptcy proceedings were ongoing, Nobuaki Kobayashi, Tokyo attorney, also known as the “Tokyo Bitcoin Whale”, was involved in massive selloffs for the company. Kobayashi claimed that he sold $400 million of Mt. Gox’s Bitcoin since September 2017. Many cryptocurrency observers believed that this contributed to the 2018 market decline, an accusation Kobayashi has consistently denied.

Bitcoin traders heaved a sigh of relief when it was clear that there were no more selloffs from Nobuaki Kobayashi. Also, the Tokyo District Court gave creditors good news when it halted bankruptcy proceedings to start civil rehabilitation on June 22, 2018. This ruling put Mt. Gox creditors in line to receive compensation for their losses.