Mt. Gox To Pay Victims $1 Billion worth of Bitcoin in Compensations

The victims of the Mt. Gox cryptocurrency hack can hope for some relief as new proceedings to compensate them for their losses would soon begin.

Mt. Gox suffered the first and by far the biggest major attack on a cryptocurrency exchange. More than 800,000 bitcoins were stolen from the exchange in 2014 incident. [See a timeline of all major cryptocurrency cyber attacks here.]

Civil Rehabilitation Process Finally Begins

Several lawsuits have been filed and debated following the hack which ground exchange operations to a halt and caused the exchange file for bankruptcy.

However, Mt Gox trustee, Nobuaki Kobayashi announced last week that the cryptocurrency operator has obtained approval and will commence a civil rehabilitation process. The civil rehabilitation process will suspend Mt.Gox’s ongoing bankruptcy court case. He gave assurances that all debts will be paid before the bankruptcy proceedings resume.

In the document, he explained that for the civil rehabilitation proceedings, creditors will receive bitcoins and not fiat equivalent which was used to file for bankruptcy. The document read:

“In bankruptcy proceedings, non-monetary claims are converted into monetary claims based on the valuation as at the time of the commencement of bankruptcy proceedings. In contrast, in civil rehabilitation proceedings, non-monetary claims are not converted into monetary claims at the time of commencement of the civil rehabilitation proceedings.”

According to the schedule of events from the document, affected customers can start making their claims from October 22, 2018, but will only be able to receive their compensation next year as the rehabilitation requests will reach Japanese courts by February next year.

Kobayashi has been criticized by members of the cryptocurrency community for selling thousands of bitcoins on exchanges. Some members of the cryptocurrency community believe that his large sell-offs caused substantial fluctuations in bitcoin prices and played a role in the dip in cryptocurrency markets in 2018. Kobayashi will be restricted from selling off any BTC as the civil rehabilitation process is on.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.