Mt. Gox creditors approve a $10 billion compensation plan
Mt. Gox’s trustee today confirmed that creditors of the defunct crypto exchange have overwhelmingly approved his compensation plan, a few weeks after a Tokyo court said there were no grounds for disapproving it.
In a statement released today, court-appointed Nobuaki Kobayashi said 99 percent of votes cast by the Mt. Gox’s creditors were in favour of the draft rehabilitation plan. This figure represents 83 percent of the total in attendance, well above the required two-thirds threshold.
“Depending on the situation, the confirmation order is expected to become final and binding in approximately one month from today. The Rehabilitation Trustee will then make repayments to rehabilitation creditors holding allowed rehabilitation claims in accordance with the Rehabilitation Plan. An announcement will be made to rehabilitation creditors on the details of the specific timing, procedures, and amount of such repayments,” the statement further reads.
Kobayashi filed with the Tokyo District Court a revised draft rehabilitation plan in February 2021. This included revisions to schedules for paying back funds for both allowed and disputed claims.
The court and an examiner have reviewed the amended plan, and creditors were then called to vote on it after it was approved.
The trustee is reportedly holding 150,000 bitcoin, worth roughly $10 billion at current market prices. More than 20,000 victims are believed to have filed claims for a refund.
Civil rehabilitation is not used to resuscitate Mt. Gox business but rather as a more flexible form of bankruptcy. It also allows the trustee to create his own plan instead of following a rigid set of steps under the bankruptcy proceedings. And, most importantly, the bitcoin claims will be able to be revalued – hopefully in bitcoin this time.
Mt. Gox went offline in 2014 in the single biggest setback in the history of Bitcoin after 850,000 bitcoins were stolen in a hacking attack. Under suspicious circumstances, the Japanese exchange claimed it had lost track of about 750,000 bitcoins belonging to customers and another 100,000 of its own, but later said it had found 200,000 bitcoins.
Those assets were supposed to be distributed to shareholders as part of the liquidation. This is because the value of creditors’ claims is calculated in the exchange rate between Bitcoin and the Japanese yen on the bankruptcy date in April 2014, instead of current rates.
However, the rehabilitation ruling is not in the financial interest of the shareholders. Mt.Gox has two shareholders, Tibanne and Jed McCaleb. The Tokyo-based exchange is 88 percent owned by Tibanne, of which Karpelès is the sole owner. The remaining 12 percent are held by Mt. Gox’s original creator Jed McCaleb, a San Francisco-based programmer who currently works with Stellar.