Nobuaki Kobayashi, the Rehabilitation Trustee of defunct crypto exchange platform Mt. Gox, has published a draft document containing resolutions reached at the exchange’s second creditors’ meeting. The report was shared on March 20 following the Civil Rehabilitation Proceedings.
It showed that as of March 19, the account balance of the Rehabilitation Trustee depreciated to 69,553,086,521 Yen (about $630 million). Notably, this is about 122, 000,000 Yen ($1.1 million) less than what was recorded after the first creditors meeting under the Proceedings, which took place back in September 2018. The trust, which was set up by Kobayashi, was established to ensure creditor protection.
The report also revealed that the total funds which have been recovered are placed in a separate trust, set up to protect the company’s bankruptcy creditors.
However, the firm suffered a significant security breach back in 2014, which led to the theft of 850,000 Bitcoin tokens (worth $450 million at the time, and most likely $4.4 billion at the current exchange rate).
The losses were too substantial for the exchange to bounce back from, and after months of papering over the cracks, the platform eventually went under and filed for bankruptcy protection. Things turned south quickly when the exchange’s former CEO Mark Karpeles was slammed with separate charges of record tampering and investor fraud. He spent almost a year in a Japanese prison, before he was eventually released. He was, however, charged for embezzlement and abuses of office.
Karpeles is Off the Hook for Embezzlement
Last week, Karpeles was found not guilty of the embezzlement charges, but he was docked for producing illegal records. For these, he was given a suspended prison sentence for two years and six months, on account of his good behavior and clean criminal history.
While Karpeles was unable to run the exchange due to the allegations against him and his prison term, Nobuaki Kobayashi, the firm’s Rehabilitation Trustee, was placed in charge of the company’s funds.
The Trustee’s report also showed that as of March 18, 2019, 141,686.35371099 BTC and 42,846.35166254 BCH (Bitcoin Cash) belong to the company (referred to as the “Rehabilitation Debtor”). The investigation is ongoing as regards the existence of additional Bitcoin tokens being held in possession of the company.
Any tokens found are expected to be moved into the trust and eventually distributed to the victims of the 2014 hack. This will probably be ten cents on a dollar, but it’s better than nothing.
Back in November 2017, some Mt. Gox creditors had filed a petition for the commencement of civil rehabilitation efforts against the exchange with the Tokyo District Court. The petition was heard by the court last June, after which the court issued an order to commence the proceedings against the exchange. As a result of this, the previous bankruptcy filing was halted.
In the latest document, Kobayashi provided insight into the timeline of the civil rehabilitation procedures. For instance, investigations into all exchange-related rehabilitation clams will be conducted from March 22 to March 29, while the company has until April 26 to submit a detailed rehabilitation plan.