Mt Gox Creditors Prepare Revised Claims for Bitcoin Repayments Plan

Mt Gox Creditors Prepare Revised Claims for Bitcoin Repayments Plan

Bitcoin News
August 7, 2018 by Editor's Desk
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The creditors of the infamous Mt GOx exchange have proposed a new plan for partial payments to bear the loss of the creditors due to the collapse of the biggest exchange at that time. In 2014, when there were little or no Bitcoin exchanges, Mt.Gox, the most popular Bitcoin exchange was handling around 70% of
Mt GOx

The creditors of the infamous Mt GOx exchange have proposed a new plan for partial payments to bear the loss of the creditors due to the collapse of the biggest exchange at that time.

In 2014, when there were little or no Bitcoin exchanges, Mt.Gox, the most popular Bitcoin exchange was handling around 70% of the total Bitcoin supply at that time until a security breach by the hacker essentially dismantled the exchange.

As reported by Wired, Mark Karpeles, CEO of Mt Gox at the time said himself that the security systems of the exchange were not on point due to which the hackers stole nearly $460 million worth of bitcoin from the exchange. The previous hack of 2011 was also a big disaster for the exchange which dropped the price of bitcoin to one cent.

The exchange inevitably filed for bankruptcy in February 2014.

After receiving comments on its previous policies, the creditors have formed a new plan called “Revised Basic Policy for Preparing a Rehabilitation Plan”, which just stands as a proposal for now and still solicits feedback from fellow creditors.

The key points in the plan are as follows:

  1. The rehabilitation plan should be simple and the implementation thereof should have a high degree of certainty: 

The creditors are apparently in favor of a simple plan to avoid confusion amongst creditors and remove unnecessary steps like interest adjustment to speed up the process and get the first payment as soon as possible. Additionally, the plans should be practical and capable of quick implementation for the benefit of the creditors.

  1. No distribution will be made to shareholders:

The exchange cannot return the amount of BTC lost to creditors due to the huge rise in the value since 2014, thus the creditors believe that they should be prioritized when it comes to payments as the shareholders had a say in the matters of the company whereas the creditors were simply using the exchange.

It is unclear whether the demand will be fulfilled or not but on the face of it, the point seems logical.

  1. Claims for return of bitcoins (BTC) will be repaid in BTC and BCH in general:

The creditors are of the opinion that the repayments to BTC creditors should be made in BTC and BCH in general to reduce transaction fee and cost. One more reason behind such a plan is that if payments are made in cash then it would require large amounts of BTC and BCH transactions which would affect the price negatively.

The creditors find it convenient to get their dues transferred to an exchange where most people can open accounts easily.

  1. The full payment to the monetary creditors will be made:

The monetary creditors of the exchange are to receive full payment in cash as is prescribed in the bankruptcy proceedings. Though the payment to monetary creditors from the estate of Mt Gox reduces the amount paid to the BTC creditors, they believe in maintaining this policy in accordance with the Examiner’s report.

  1. First payment to creditors will be made promptly after the approval and confirmation of the rehabilitation plan:

As it goes without saying, the creditors have been waiting long enough to receive their payments and thus, it is justified on their behalf to receive their funds as and when the plan is approved.

  1. If there are any residual assets, or new assets are found, additional payment will be made. Additional investigation for lost BTC will be implemented:

The creditors believed that the number of assets reserved by MtGox due to disputed claims should be paid to them as additional payment. Further, investigation for lost BTC is to be made to ensure the company is just in its payment procedures and is not hiding any extra assets that it might have discovered.

  1. No sponsor will be selected in principle except where it is apparent that such a selection would be advantageous to creditors:

The plan is against selecting a sponsor to help Mt Gox financially since the exchange is no longer doing business and does not need funds to maintain its creditworthiness. Moreover, the creditors are eager to get the payments processed as fast as possible and wouldn’t want additional disputes or time spent in selecting sponsors. Thus, a sponsor should not be selected until it is clear that such a decision would be advantageous

  1. The introduction of systems which allow creditors to obtain their trading records, etc. and other measures will be taken by Mt. Gox:

Since “their trading record is indispensable for the approval or disapproval of civil rehabilitation plan,” the creditors expect the trustee to introduce systems to facilitate the same.

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