BitcoinBusiness

Mt. Gox Rehabilitation Deadline Pushed, Delaying 150,000 Bitcoin Distribution

In an announcement posted to the Mt. Gox domain on October 15th, trustee Nobuaki Kobayashi announced that the rehabilitation of the exchange has once again been delayed. He claimed that within the proposed rehabilitation plan, there are "matters that require closer examination," making it "necessary to extend the submission deadline."  

The Tokyo District Court has approved Kobayashi's request, extending the submission deadline for the rehabilitation plan to December 15th, 2020 - two months later than the latest deadline, October 15th, 2020. 

After the Mt. Gox exchange declared bankruptcy in 2014 following the theft of 850,000 bitcoin, the firm recovered funds in bankruptcy proceedings. 

The company announced it had reclaimed 150,000 bitcoin to repay users who held money on Mt. Gox at the time. Rehabilitation proceedings began in 2018, though multiple delays have continuously pushed back the process. 

The rehabilitation plan is expected to see the trustee distribute these coins. Some investors fear that an influx of this much bitcoin into the market could present a short-term risk, as victims could sell the coins they received from the rehabilitation process.

These fears stem from the belief that the early adopters would immediately sell the coins they receive en-masse to take profit. Ultimately, however, it is unclear if much thought should be given to the expectations of a rapid sell-off

At current market prices, 150,000 bitcoin are valued at $1.71 billion. 

What's the Issue?

The latest document in the rehabilitation proceedings did not reveal why more delays are needed. But a previous document has hinted that there are concerns over the validity of some claims to the remaining Mt. Gox bitcoin. 

In a statement published in October 2019, Kobayashi wrote that there were a "large amount of rehabilitation claims" that he "fully or partially disapproved." He added that there were concerns over how to practically repay Mt. Gox victims the bitcoin they are owed. 

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Nick is a writer and analyst who has been following Bitcoin since 2013. When he is not writing, he works on HTC's Bitcoin phone, EXODUS.