A New Era: Mt Gox Commences Civil Rehabilitation, Leaves Bankruptcy
Today began a new chapter for Mt Gox, a former exchange based in Tokyo, Japan. The exchange fell victim to arguably the industry’s most famous breach back in 2014, which continues to loom over the industry in one way or another in the days since.
Now, a major announcement posted to the Mt Gox website could usher in a new era for the digital currency industry.
A new chapter in the Mt Gox scandal
Civil rehabilitation proceedings are finally on the horizon for Mt Gox. According to the announcement, the Tokyo District Court today issued an order commencing civil rehabilitation proceedings for the former exchange.
This brings a pause to Mt Gox’s previously ongoing bankruptcy proceedings, and could open up new avenues for victims of the breach to receive compensation.
Around the time of the breach, Mt Gox handled approximately 70% of the world’s bitcoin transactions. This left many at a huge loss when the exchange collapsed following millions of dollars worth of bitcoin being stolen.
Now, investors could receive compensation without Mt Gox’s bitcoin holdings needing to be first exchanged for a fiat currency. Seemingly, this could mark the end of the Mt Gox trustee’s ‘bitcoin sell-off’ that irritated traders earlier this year.
Following the former CEO’s previous Reddit AMA
Mark Karpelès, Mt Gox’s former CEO, previously took to Reddit for an apologetic AMA (“Ask Me Anything”) earlier this year. In the Q&A, Karpelès attempted to address concerns that have lingered in the years since the hack.
According to Karpelès, many of the difficulties in refunding investors arose as a result of an ongoing lawsuit, and Mt Gox filing for bankruptcy.
He wrote that the “inability to return BTC” to investors is a direct result of the company’s ‘bankruptcy’ status. In his words, Mt Gox filed for civil rehabilitation (comparable to bankruptcy protection in Canada and the United States) but pressure caused the court to move the case to bankruptcy. According to his statements, this froze the business’ debts, and consequently prevented a direct avenue for compensating investors.
“Now, creditors are working toward switching back to Civil Rehabilitation,” he wrote, at the time. “I do not know if it’ll be possible, but I support wholly the attempt as it seems to be the best chance of seeing a fair distribution of all MtGox assets.”
With civil rehabilitation granted, proponents believe that new avenues for compensation could bring an end to the lingering trauma that occurred as a result of the 2014 breach.
Image credit: Pixabay
Buy Bitcoin, Ethereum, XRP, and other cryptocurrencies on Coinsquare, Canada’s premier trading platform.
Get the latest blockchain and digital currency news from Canada and around the world, delivered each week to your inbox.
Your Email address