Mt. Gox’s trustee Nobuaki Kobayashi will extend the registration deadline for rehabilitation creditors to March 10, 2023, to bringing more creditors one step closer to wholeness.

Following a court ruling, the trustee will also extend the registration window for creditors receiving Lump Sum, Base, and Intermediary payments to Sep. 30, 2023.

After registration, Kobayashi said some rehabilitation creditors will only receive payment when they bring “necessary documents” to Mt. Gox’s Tokyo head office. Creditors can also accept payments in Japanese Yen at another location or access their funds from Japan’s Legal Affairs Bureau. The Legal Affairs Bureau handles human rights, civil and commercial matters as a branch of Japan’s Ministry of Justice.

Founded by Ripple co-founder Jed McCaleb in 2010, Tokyo-based exchange Mt. Gox filed for bankruptcy protection in Tokyo on Feb. 28, 2014, after losing between 650,000 and 850,000 Bitcoin through software issues. The Tokyo District Court later appointed attorney Nobuaki Kobayashi as bankruptcy trustee to oversee creditor compensation. At its peak, Mt. Gox processed 70% of all Bitcoin trades.

Kobayashi published details of the registration and compensation plan for Mt. Gox’s creditors in a Nov. 2021 announcement.

While Mt. Gox creditors can start breathing a sigh of relief, “unsecured” creditors of recently collapsed crypto companies may face a long road ahead.

The collapse of algorithmic stablecoin TerraUSD in May 2022 sparked a tidal wave of crypto bankruptcies, leaving creditors to pick through the wreckage to salvage their investments.

Celsius filed for bankruptcy on July 13 after pausing withdrawals following a liquidity crisis involving ETH, the world’s second-largest cryptocurrency. In its bankruptcy court filing, Celsius estimated its assets and liabilities at between $1 billion and $10 billion, with over 100,000 creditors. Without a legal precedent for crypto bankruptcies, lawyers said that creditors could wait years for compensation.

“This could last for years. It’s highly likely there’s going to be a lot of litigation,” said Daniel Gwen of New York-based law firm Ropes & Grey.

 In Dec. 2022, a judge ordered that a select number of Celsius customers be compensated because their funds were not mixed with other corporate funds. However, a Jan. 5, 2023 court ruling said that funds belonging to over 500,000 other customers were Celsius’ property, pushing them to the back of the line.

Collapsed Bahamian exchange FTX owes unsecured creditors more than $3 billion. Its two largest unsecured creditors have claims of $226 million and $203 million, respectively. Unsecured creditors are often the last to get paid.

However, a group of FTX customers recently claimed that their “custody” assets are not part of FTX’s bankruptcy estate.

“If the assets belong to the customer, there is no line. It’s just their assets,” said a lawyer providing legal counsel to the company representing the customers.

FTX filed for bankruptcy on Nov. 11, 2022, after affiliate Alameda Research’s leaked balance sheet revealed liquidity problems. A Nov. 15, 2022, court filing revealed that the bankrupt exchange might have up to one million creditors.

Singaporean hedge fund Three Arrows Capital filed for Chapter 15 bankruptcy in the U.S. after borrowing heavily to bet on rising crypto prices. When crypto prices started falling after the TerraUSD collapse, those bets turned sour. Three Arrows reportedly owes 27 companies over $3.5 billion, with creditors likely in for a long wait.

A Dec. 2022 bankruptcy hearing revealed that liquidators had only recovered about $35 million in assets. On Jan. 5, 2023, Three Arrows co-founder Kyle Davies was subpoenaed on Twitter to provide documents to enable access to the company’s other assets. 

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

The post Mt. Gox Trustee Pushes Back Creditor Registration Deadline appeared first on BeInCrypto.

Similar to Notcoin - TapSwap on Solana Airdrops In 2024

origin »

185 +