Mt. Gox Ends Bankruptcy Proceedings, May Pay Creditors in Crypto
Today, the Tokyo District Court has ordered the commencement of civil rehabilitation proceedings that were filed by some of MTGOX Co.’s creditors against MTGOX before the Tokyo District Court on November 24, 2017.
This indicates a victory for creditors who have long wondered if an attempt would be made at making them financially whole.
“This is the first time in the legal history of Japan,” said lawyer Daniel Kelman, “that liquidation has always turned into a rehabilitation; it is the other way around after a rehab fails. This sort of also made legal history as well.”
The Exchange was hacked for more than $473 million in 2014, and the theft remained the largest in the industry’s history until the Coincheck hack in Jan. 2018. This theft left Mt. Gox bankrupt.
Creditors petitioned the court to allow Mt. Gox to enter civil rehabilitation, a legal process that provides more leeway in how creditors can be compensated.
Now that the court has approved this petition, the creditors can be reimbursed in cryptocurrency, although the exact details of their compensation will depend on the rehabilitation plan established during subsequent legal proceedings.
The victory’s post was careful to emphasize how this victory has not yet taken place. The victory will come to the creditors when Mt. Gox makes payments to creditors and the creditors actually receive such payment.
Civil rehabilitation is a little like Chapter 11 bankruptcy in the US. This process would allow Mt Gox to return customers’ bitcoins to them rather than liquidating assets to repay debts in yen.
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