Mt. Gox Bankruptcy Halted, Civil Rehabilitation Proceedings Begin

 

 

 

The Tokyo District Court formally halted the Mt. Gox bankruptcy proceedings today and issued an order that begins the civil rehabilitation process, according to Fortune. The court’s decision will allow the civil rehabilitation trustee to use the shuttered exchange’s assets to provide compensation to customers whose Bitcoins disappeared from Mt. Gox more than four years ago.

The compensation process had already been underway during the latter stages of the bankruptcy proceedings, as the trustee liquidated large sums of Bitcoin for that purpose. Many observers noted at the time, however, that those Bitcoin sales negatively impacted the coin’s price. There is hope that this round of compensation will avoid that type of market impact, since customers will reportedly be repaid with Bitcoin rather than fiat currency.

As Fortune reports:

“The Court also confirmed that those “seeking a refund of Bitcoins” would be paid in that form. Under the original bankruptcy plan, creditors were only entitled to receive the monetary equivalent of the value of their Bitcoins at the time of Mt. Gox’s collapse, when the cryptocurrency’s price was $483. “

Those creditors will have to wait to receive their compensation, however. Before they can receive their Bitcoins, they will need to refile their claims and provide the trustee with proof that they are entitled to compensation. In addition, the trustee has until February 14, 2019 to create a distribution plan for the Mt. Gox assets, which include an estimated $1.2 billion of Bitcoin and Bitcoin Cash.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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