It’s the case that keeps going like the Energizer bunny.
It’s the longest-running crypto case in the space’s history, and it’s chocked full of surprises.
It’s Mt. Gox.
The latest surprise relates to keeping the former head of the Bitcoin exchange from reaping any monies, yen, from the planned liquidation, which was a part of Mt. Gox’s bankruptcy settlement with creditors.
Let’s discuss.
Is he entitled?
The legal wrangling is over how to make whole the creditors who loss millions of dollars in what was the largest exchange hack at that time. Occurring in February 2014, the hack led to the exchange reportedly losing nearly half a billion dollars’ worth of bitcoins due to bad actors hacking into its computer system.
The debacle forced the Tokyo-based exchange to file for bankruptcy protection. It also led to the exchange’s chief, Mark Karpelès, being arrested in 2015 on embezzlement charges. He is also accused of creating unauthorized records at the exchange.
Karpelès denies doing anything criminal. His case continues. As it does, Karpelès has spoken out about whether he should receive any of the money that results from the liquidation. His logic, however, is not based on him being seen as a criminal who played a role in the exchange’s collapse.
Instead, he reportedly thinks it’s because he won’t be able to find buyers.
Consider this from The Wall Street Journal:
He had said he didn’t think he would end up with any money under the liquidation because finding Bitcoin buyers would be difficult and it was common for bankruptcy assets to be sold at a fraction of their book value.
Pause and start over
So concerned about the possibility that Karpelès could get anything from the settlement, the Tokyo District Court recently froze the planned liquidation and started new bankruptcy proceedings.
We reported that the Court had laid out a plan, complete with milestone dates, to bring some relief to Mt. Gox creditors. News circulated last Friday that the Mt. Gox case was being moved to civil rehabilitation proceedings, and a hope is that any resolution will entail creditors being paid back their losses in cryptos.
In making that announcement, the court stated:
“Today, on June 22, 2018, the District Court ordered commencement of civil rehabilitation proceedings regarding Mt. Gox. Accordingly, enormous assets, which were to be distributed to Mt. Gox’s shareholders under the bankruptcy proceedings, will be returned to creditors of Mt. Gox in civil rehabilitation proceedings. This is the creditors’ victory.“
Bitcoin may be down, but Mt. Gox creditors still stand to reap millions
Although Bitcoin’s price is down considerably from its December 2018 all-time high, it’s up considerably from its April 2014 price. Then Bitcoin was trading between $340 and $530.
Prior bankruptcy terms had called for Mt. Gox customers to receive the yen value of the bitcoins they owned based on the price of bitcoin in April 2014. New terms could lead to them getting the value of what Bitcoin is worth today.
It’s thought that the liquidation could have reaped Karpelès hundreds of millions based on the higher Bitcoin prices.
This article appeared first on Cryptovest