Mt Gox Trustee Finally Submitted The Draft Rehabilitation Plan
After years of waiting, the trustee on 15th Dec submitted the draft Mt Gox rehabilitation plan to the court. The Tokyo District Court and an examiner will review the draft rehabilitation plan and determine whether to proceed with the rehabilitation proceedings as per the draft rehabilitation plan.
Background:
Mt Gox was an infamous Bitcoin exchange back in 2014. Nearly 70% of Bitcoin spot market transactions at the time were handled by Mt Gox back. However, due to the hack, the Mt Gox had to cease all operations in the exchange. More than 850,000 BTC were lost to the hackers, with 200,000 bitcoins recovered 2 weeks later. At the time, Bitcoin was trading at ~$ 700. The event caused several early Bitcoin investors to lose their holdings.
After years of legal battles, the Tokyo District Court appointed Nobuaki Kobayashi as trustee to formulate the rehabilitation plan and distribute about 150,000 Bitcoin to compensate users for losses. The original Mt Gox’s rehabilitation plan was supposed to be submitted to the court in Feb 2019, however, the court pushed the deadline at least three times upon the request from the trustee.
Dec 15, 2020, was the latest deadline in the Mt Gox rehabilitation process and per the latest announcement, the trustee has finally submitted the draft rehabilitation plan.
Mt Gox rehabilitation aftermaths:
Now the long-awaited process of distributing 150,000 Bitcoin from Mt Gox’s wallet to the creditors is in the last stage of approval. As previously mentioned in our post, due to the significant increase in the value of Bitcoin since 2014, the creditors once receive their allocation may be tempted to sell them for profit resulting in interim selling pressure.
Though the distribution will not happen immediately, the fact that the Mt Gox rehabilitation process enters its final distribution phase, a bearish signal could be triggered.
NOTE: The rehabilitation plan is subject to court approval and requires the trustee to explain it to relevant parties. Therefore, we believe distribution can not commence before Jan-Feb 2021.
