Unlikely Turn Of Events – Mt. Gox Is Being Resurrected?

Mt. Gox is one of the best-known names in the crypto industry, even today, more than half a decade after it made countless headlines because it suffered a hacking attack. After becoming the world’s largest Bitcoin exchange, Mt. Gox went bankrupt, and countless users had to accept that they would not get their money back.

However, it has now been seven years since the incident, and one of the exchange’s largest creditors, CoinLab, recently said that a sizable portion of the money that investors lost at the time might soon return.

The Revival of Mt. Gox — What do you Need to Know?

Ever since 2014, Mt. Gox has been a commonly referenced name in the crypto industry. Some used it to point out the danger of investing in crypto, while others noted what might happen if investors leave their money in the exchange’s wallet. However, CoinLab, Mt. Gox’s bankruptcy trustee, and another group decided to sign an agreement that would help bring some sort of a conclusion to investors damaged in the incident, by allowing them to recover as much as 90% of the lost BTC.

This was said in numerous reports from January 2021, when the efforts to revive the exchange started attracting attention. The agreement offered investors to either cut their losses and take early payments, or wait for the litigation to finish, and potentially recover more, after the exchange’s rehabilitation has been completed.

Five months later, in May 2021, the trustee presiding over the exchange’s rehabilitation finally took the next step towards partially reimbursing the victims of the hack, allowing claimants to start voting on whether the rehabilitation proposal will be accepted or not, allowing them a 5-month-long period to come to a decision.

The vote is scheduled to end on October 8th of this year, with a minimum threshold for the proposal to pass is 50% of the votes being in favor of the rehabilitation program. Earlier this month, on August 8th, mtgoxlegal.com published a reminder for users to vote once more, warning them that the deadline for casting their vote on the matter is approaching its end.

Of course, even now, at the time of writing, there is still slightly more than a month before the deadline is reached, and the decision regarding the matter is resolved.

What Will Happen After the Vote Ends?

Provided that the vote receives enough people that are in favor of the program, the terms of the proposal say that all approved creditors will receive a base payment of up to 200,000 JPY, or around $1,800, that will count toward their total claim. Of course, users will still have a choice to get either 21% of the amount stolen from them or to wait and get a higher percentage point, which is not guaranteed.

The case is still very complex and messy, and there was already a lot of drama. Not to mention that there is a possibility that the vote will fail, in which case, the trustee and the board will have no choice but to go back to the drawing board and start figuring out the case from scratch. Creditors who have already waited for years to get their money back will simply have to wait for a new proposal to be created and prolong their wait for any kind of compensation that much longer.

It is also worth noting that the recovery efforts are separate from the class-action lawsuit led against the owner and operator of the exchange at the time of the hack, Mark Karpeles. Karpeles himself suggested that creditors should, in fact, accept the proposal, while insisting that he is not directly connected to it in any way.

As mentioned, the proposal’s voting deadline is slowly but surely approaching, and there is still time for creditors to act and tip the scales towards one side or the other. Those who opt not to participate will still be participating in a way, as their votes will be calculated as “against the proposal,” so choosing not to contribute to the vote doesn’t mean that users are completely out of it.

Leave a Reply

Your email address will not be published.

Related Articles
Read More

NFTimes Volume 13 – How To Keep Your NFTs Safe

When it comes to NFTs, two main types of attacks tend to hurt end-users. They differ dramatically in scale, ranging from more common small scams, which are directed at single users or smaller groups of people, to larger-scale schemes and cons. Small Scams: Tricky, Yet...