Mt. Gox, the infamous cryptocurrency exchange that got hacked years back, seems to be moving towards a final investor compensation process. According to a company announcement published earlier this week, creditors will be meeting later today to examine a reimbursement plan, which will determine where things go from here.
Possible Modalities for Reimbursements
As the announcement explained, all creditors will be able to access a portal where the documents presented at the meeting will be made available. The exchange, which was the victim of one of the most severe exchange hacks in the crypto industry, now has close to 24,000 creditors looking to get some of their money back.
The announcement didn’t give much information concerning the details that will be treated at the meeting. However, the exchange’s rehabilitation trustee shared an outline of the rehabilitation plan, which showed that creditors who have filed claims for Bitcoin, Bitcoin Cash, and fiat currencies would get their assets in their original form, wither through cryptocurrency transactions or bank transfers (as the case may be).
Meanwhile, all of the other assets will be liquidated into cash “to the extent possible.” The plan also showed that the Trustee would like for BTC or BCH creditors to request cash payments if they would so prefer.
The plan adds, “Consequently, a sufficient amount of cash must be secured as the source for distribution for both fiat currency claims and BTC/BCH claims for which cash payment is requested. For reasons including this, the Trustee may, with the permission of the court, sell all or part of the BTC/BCH constituting the Debtor’s assets.”
The Fallout of the 2014 Hack
The exchange’s hack resulted in the loss of 85,0000 BTC tokens, which were worth almost $650 million at the time. However, the firm has since gone under reformation, with a Japanese court appointing Tokyo-based attorney Nobuaki Kobayashi to handle the firm’s reorganization personally.
Since then, there have been three creditor’s meetings already, under a civil rehabilitation process that has taken the better part of 6 years now. The process has already forced community members and some of the exchange’s creditors to organize in a bid to resolve things quickly.
Part of their resolve led to the exchange’s bankruptcy proceedings shifting to a civil rehabilitation case two years ago. This way, creditors will get their money back in crypto, as opposed to the fiat currency equivalent of how much Bitcoin they held as at when the exchange collapsed.
The exchange’s former chief executive, Mark Karlepes, also remains mired in a long-standing legal tussle with some creditors over his conduct prior to the exchange’s hack. The creditors banded together years ago in a class-action suit that accused the businessman of conversion, negligence, and consumer fraud. However, he has had success in fighting the cases up to this point, with only one plaintiff – Gregory Greene – left in the suit.
Karpeles has since intensified his efforts to get the case tossed out in its entirety, accusing Greene of adjusting his fraud allegations against him. Earlier this month, he argued for the case to be tossed, explaining that Greene’s allegation was based on terms of services that weren’t published on Mt. Gox’s website as of when he opened his account.