Mt Gox, the exchange that is known for the biggest and one of the first hacks in cryptocurrency world, has reportedly started accepting claims for its creditors. On Aug. 23, Mt. Gox trustee Nobuaki Kobayashi released an online submission process for creditors to prove their claims. If the proceedings towards claim go well, it would one of the biggest drivers to gain back the trust of the community against the industry that is marred by hacks and people losing their monies.
Claims submission process released
The recent document released by Nobuaki Kobayashi lists questions and answers related to users of the Bitcoin exchange of Mt Gox Co., Ltd. and other creditors filing proofs of rehabilitation claim with respect to claims for the return of cryptocurrency and money against Mt Gox. The documents state that the creditors can file their proofs using three methods, namely online, Offline Method and Supplementary Online Method. The notification also details the various prerequisites for the exchange’s creditors, who now have until October 22 to submit a filing. The notice also states the claimant or creditor will lose the right to claim if he or she misses the deadline
“If proof of claim is not filed by the deadline, then disenfranchisement (i.e., loss of the right to claim) might apply, so please be careful,”
The notice further states, those who have no access to their Mt. Gox accounts should send proof of their entitlement to a postal address given by Kobayashi. All corporate client claims must also be filed by post, with Kobayashi promising to release an online option “as soon as it is ready.”
Creditors to be paid in BTC and BCH
Lawyers representing a group of creditors of the now-defunct Japanese Bitcoin (BTC) exchange Mt. Gox has recently updated their civil rehabilitation plan, according to a statement on the Mt. Gox creditors’ website Aug. 1. The update confirmed that repayments will be made in Bitcoin and Bitcoin Cash (BCH), adding that creditors will be paid back to their existing accounts on crypto exchanges or on newly opened accounts as preferable by the creditors. The announcement added
“This is because making payments to BTC creditors in BTC and BCH is the most simple and efficient way, minimizing transaction costs such as bank fees (this is the very advantage of BTC). Also, if payment is to be made in cash, it will be necessary to exchange a large amount of BTC and BCH for fiat currency, which may result in the decline of the price of BTC, etc. Further, as the price of BTC and BCH fluctuates rapidly, it is difficult to determine when to sell BTC and BCH.”
With regard to altcoins, the new policy stated as quoted below,
“with regard to altcoins (cryptocurrency except for BTC and BCH), the number of exchanges which deal with altcoin is limited. It is unrealistic to repay BTC creditors in altcoin and therefore altcoin should be exchanged to cash and paid to creditors . However, there are no exchanges which deal with all types of altcoins, there is a possibility that the sale of the altcoins by the trustee would cause a sudden fall in the price of altcoins and security problems may arise if the trustee moves the altcoins. Therefore, the trustee should proceed with the sale of altcoins with careful consideration of these matters.”
The revised policy further states that all assets currently held by Mt. Gox, including 166,000 BTC and 168,000 BCH, be paid to creditors immediately following the procedure’s approval.
The exercise is going to be a tough and lengthy one considering the mammoth size of the transactions. But any step for the creditors towards recovering their near lost funds should be a sigh of relief. The wait of four years has been long and seems like it’s about to end
Will the trust of the community be restored as Mt Gox completes its payments? Do let us know your views on the same.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.