Mt. Gox’s Creditors Win a Legal Victory, Lost Crypto Assets to be Recovered
cryptocurrency-event-2018

Mt. Gox’s Creditors Win a Legal Victory and Will Have “Enormous Assets” Returned

Mt. Gox’s creditors have scored a victory in the hunt for recovering massive losses. The Japan-based exchange suffered an infamous hack and collapse in 2014, leading to huge losses for shareholders and creditors. Now, a Japanese court has decided that “enormous assets” will be returned to creditors – not shareholders.

As reported by Bitcoin.com, the Mt. Gox Creditor (mtgoxcreditor) posted Commencement of Civil Rehabilitation Proceedings of Mt. Gox today, indicating a victory for creditors who had been wondering if an attempt would be made at making them financially whole.

The “victory” is that the Tokyo District Court ordered the commencement of civil rehabilitation proceedings. This is important because it indicates, “enormous assets, which were to be distributed to Mt. Gox’s shareholders under the bankruptcy proceedings, will be returned to creditors.”

The news is also important because it’s the first time in Japan’s legal history, according to attorney Daniel Kelman,

Kelman is referring to how the Tokyo District Court changed how assets will be distributed. Instead of going to Mt. Gox shareholders, the assets will be distributed to Mt. Gox’s creditors.

In any case, this is an enormous victory for Mt. Gox’s creditors.

One reason why this unexpected victory occurred is because of the appreciating price of bitcoin (BTC) since the hack four years ago. Here’s how Kelman explained it:

“[The appreciating price is] the main reason. At the initial creditor meetings at Tokyo District Court, the creditors demanded the trustee return bitcoins as bitcoins. Until then he was intent on selling them, but he agreed to look into it. The Coinlab case stalled everything for a couple years and creditors ended up in the 2017 bull market as a massive hodler, until the trustee started market selling in January this year, greatly contributing to the current bear market.”

In other words, as the Mt. Gox case stalled for several years, the trustee became a large bitcoin holder. Creditors initially demanded receiving the assets as bitcoins, but as the price has increased, they’ve been more motivated to sell. The trustee began selling his bitcoins in January, which is exactly when the price of bitcoin started to slump. As explained by Kelman above, this wasn’t a coincidence: the Mt. Gox trustee has been moving enough bitcoins to contribute to the bear market.

Interestingly, Kelman also revealed in a tweet that the trustee will not be selling bitcoin at market rates again anytime soon, which means we could see potentially see upward price movement for bitcoin – if the trustee was really having such an enormous impact on the market.

What’s the next step for Mt. Gox’s creditors? It’s important to note that this is not yet an official victory for creditors – it’s just the first step in the legal proceeding.

The victory will officially occur when Mt. Gox makes payments to creditors and they actually receive the payment. To get to that point, three additional steps need to be taken, including realizing creditors’ rights, receiving approval at the creditors’ meeting, and receiving final approval from the court.

Creditors who have not yet filed a claim might get another chance to file their claim in the rehabilitation process.

You can view the full “victory post” here at MtGox-Creditors.com.

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