Tokyo district court greenlights civil rehabilitation for Mt. Gox

Posted 23 June, 2018

On Friday, June 22, the district court of Tokyo ordered to commence the process of civil rehabilitation of Mt. Gox following the petition lodged back in November 2017.

The current bankruptcy case of Mt. Gox will be paused for that purpose, as the report reads. The civil rehabilitation will mean that the platform's trustee Nobuaki Kobayashi will be no longer able to sell bitcoins as a way to offset the losses. In this situation, creditors are said to have legal rights to claim for reimbursement in Bitcoin terms next year, given that a civil rehabilitation does not cover mandatory selloff of the assets.

All the parties willing to get bitcoin payoffs will have to lodge another application before October 22. Nevertheless, it is also possible that some creditors will be ready to sell their bitcoins.

"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. Therefore, in the civil rehabilitation proceedings in this matter, claims seeking a refund of bitcoins ('Bitcoin Claims') will also not be converted into monetary claims after the commencement of the civil rehabilitation proceedings," the company statement reads.

For reference, Mt. Gox hack, which became one of the major hacks in the crypto exchange sector. As a result, the exchange faced $473 million in losses. The platform was declared insolvent and faced criminal bankruptcy proceeding.

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23 June, 2018 16:09

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