Breaking: Court Moves Mt Gox Case to Civil Rehabilitation, Creditors to Be Paid in BTC

  • The Tokyo District Court has moved Mt Gox's case from criminal bankruptcy to civil rehabilitation.
  • This means creditors won't be paid in JPY, but in BTC.
  • The trustee, who still holds over 137,000 BTC, likely won't trigger another sell-off until mid-2019 when creditors get paid.

The Tokyo District Court has reportedly moved the infamous Mt Gox case out of criminal bankruptcy into civil rehabilitation, meaning creditors will likely be paid in BTC in mid-2019, and that the exchange’s trustee won’t likely sell funds anytime soon.

According to a document published on Mt Gox’s website, the process is set to start early next year, and is mostly good for the cryptocurrency ecosystem. Mt Gox was notably a dominant cryptocurrency exchange that collapsed in 2014 amid claims of insolvency and security breaches.

At the time, hundreds of millions of dollars worth of BTC were lost, which saw the cryptocurrency’s price to crash. Recovery efforts managed to find 200,000 BTC, which were then held by the exchange’s trustee, Nobuaki Kobayashi.

Had the cryptocurrency exchange’s case remained in criminal bankruptcy, creditors would have been paid back in fiat currency, equivalent to bitcoin’s exchange rate at the time Mt Gox went down – less than $500 per coin.

Since 2014, bitcoin has appreciated to over $6,100. The exchange’s former CEO Mark Karpeles, who was charged with embezzlement and data manipulation, would’ve received most of the remaining proceeds.

Karpeles, as CryptoGlobe covered, has stated he doesn’t want said funds, which amount to about $1 billion. At the time, he said he never expected to received anything from the bankruptcy, and that it is an "aberration" that it was a possibility, adding that he believes it is his responsibility to make sure it doesn't happen.

Given that the case was moved to civil rehabilitation, Kobayashi is set not to sell any more bitcoin until creditors are reimbursed next year. As for cryptocurrencies created through bitcoin’s various forks – including BCH, BTG, and BCD – the document states:

At present, nothing has been determined regarding the sale of Bitcoin and cryptocurrencies split from Bitcoin (collectively, “Bitcoin, etc.”) in the future.

Mt Gox

How creditors will be reimbursed isn’t yet clear, and will likely be determined in subsequent legal proceedings. Mt Gox’s creditors will be required to refile proof of claim forms by October 22, 2018. This applies to all creditors, even those who didn’t manage to participate in the proceedings last time.

Currently, walletsassociated with Mt Gox still hold 137,890 BTC, worth nearly $880 million, along with these airdropped tokens. As Bloomberg reporter Yuji Nakamura puts its, a distribution of these funds could trigger a major sell-off next year.

CryptoGlobe had previously covered that the trustee’s last crypto sell-off, of over 35,00 BTC and 34,000 BCH, didn’t influence the market, according to him. At the time, he said the cryptocurrencies weren’t sold through an exchange, but “in a manner that would avoid affecting the market price, while ensuring the security of the transaction to the extent possible.”

Celsius App Rolls Out Tether Gold (XAUt) Interest Account

Colin Muller

Celsius, a crypto-based lending and saving app, has launched support for gold on its platform. Specifically, Tether Gold (XAU₮) is used to fund the new gold capacity on the network.

According to a press release, users holding the new asset in their Celsius wallets will be able to earn 3% interest per annum on their Tether Gold.

Celsius was launched in 2018 with the state goal of “[acting] as a catalyst for financial disruption on a global scale,” and also offer interest accounts on a healthy variety of cryptoassets. In addition, users can procure cash (dollar) loans from the platform with several cryptoassets held in collateral.

Tether Gold launched in early 2020 and has quickly become the leading gold-backed crypto, after Bitfinex launched margin-trading of the asset on its platform.

Celsius’ new capability could make a sweet deal even sweeter, as gold (XAU) has generally been on a tear in recent months. CryptoGlobe reported yesterday that the renewed interest in gold is not dying down, as some analyst have grown concerned that the extensive monetary and, perhaps, fiscal support required to stabilize the global economy in the wake of COVID-19 will spurr inflation.

13% up to ATHXAU chart by TradingView

Gold is currently trading at $1,700, just roughly 13% away from its all-time-high laid in September of 2011 at $1,920. We have seen a pretty consistent gold uptrend since October of 2018; given the circumstances, the is a strong case for a retest of that high.

Featured Image Credit: Photo via Pixabay.com