Judge Extends Rehabilitation Deadline for Mt. Gox 

Mt. Gox investors are still reeling from a deadly hack that happened over five years ago. While many believed that the exchange could see some progress with reorganizing and restitutions this year, it appears that things might take a bit longer. Earlier this week, the exchange announced that its reorganization plans had been delayed until the end of the year, casting a further blow to investors’ hopes of getting some of their money back.

Finishing Touches Needed

According to a press release on Mt. Gox’s website, the Tokyo District Court has issued an order to extend the company’s deadline for implementing a rehabilitation plan. The move followed a motion proposed by Nobuaki Kobayashi, the firm’s rehabilitation trustee, and it will shift the process down to December 15.

Mt. Gox is an infamous name in the crypto industry. The company encountered two devastating hacks in 2011 and 2014, with about 1.35 million BTC tokens lost in total. Since then, it has tried to get back on its feet, while also fighting a court case from investors and affected customers.

The rehabilitation aspect has failed this far, with Mt. Gox publishing several motions to delay the process even longer. It got two extensions in 2019, and it already got one in 2020. The last extension happened in March.

That same month, Kobayashi revealed a draft of the exchange’s proposed rehabilitation plan. Under the proposal, the exchange claimed that it would honor claims in fiat currencies, Bitcoin, and Bitcoin Cash in their requested form. Those in other assets will be liquidated to cash as much as the exchange can manage.

Mt. Gox also plans to allocate funds to the rehabilitation process first, after which it will pay creditors. When making payouts, the company plans to prioritize fiat currency claims, followed by small payments amounting to about $1,800. Then, it will handle prorated payments. The company is also seeking court approval to sell all or part of its Bitcoin and Bitcoin Cash debts, ensuring that it has sufficient cash to bankroll the process.

While it appears to have everything thought out, this delay will compound creditors’ frustrations even more. Giving a reason for its delay application, Kobayashi explained that the company was still working on perfecting its rehabilitation plan. While they had several aspects ready, some others reportedly need closer examination.

Mark Karpeles Faces the Music

While Mt. Gox is still working on getting back on its feet, the company’s chief executive, Mark Karpeles, is also in some legal hot water. Karpeles was found guilty of tampering with financial data to the detriment of Mt. Gox’s clients in the wake of the exchange’s dissolution, and he has been fighting the charges for years.

Last year, a ruling sentenced the CEO to 30 months in jail for tampering with customer data between February and September 2013 and depositing $33.5 million into his personal account. The sentence will be suspended as long as he stays off law enforcement’s radar for four years.

While he challenged the ruling, Tokyo District Court Judge Mariko Goto decided to uphold it in June. Per a Nikkei report, Karpeles had claimed that increasing his account’s balance wasn’t a crime. However, the judge ruled that his actions violated the firm’s terms and conditions.