The former customers of the bankrupt crypto exchange MtGox after four years of litigation received an opportunity to send applications for the return of funds held in company wallets. Users can do this by mail or using a special tool that has been created on the MtGox website.
Application process is available to individual customers. Users from all over the world can freely participate in civil rehabilitation by confirming applications related to the exchange in accordance with the Civil Rehabilitation Act of Japan and other laws and regulations. Corporate users will be given this opportunity later.
How it all happened:
- Crypto exchange Mt.Gox opened in 2010 and for 4 years managed to win 70% of the bitcoin world market. In February 2014, Mt.Gox suddenly ceased to function. It was later reported that it lost 850,000 bitcoins and $28 million in fiat money.
- It was later discovered that another 200,000 bitcoins remained in the platform wallets. Former clients have been trying to return these funds ever since. A trustee of MtGox made several attempts to sell the assets of the exchange in order to meet the demands of creditors.
- According to the decision of the Tokyo court, the liquidation of assets was suspended and the civil rehabilitation process of MtGox was initiated. Now former clients of the exchange will be able to receive compensation in bitcoins. Users affected by the closure of MtGox must complete their requirements by October 22. All appeals will be considered by February of next year, after which the compensation will be distributed.
- Several scandals have also been associated with this story. A user of the bankrupt MtGox Joseph Lack accuses Japanese bank holding Mizuho Bank of lack of action and fraud. In January 2014, he transferred $40,000 to an account at Mizuho that processes deposits of the crypto exchange users. The bank accepted these funds and withdrew a commission for the transaction. Lack waited until the deposit appears in his MtGox account. But a month later, the bitcoin-exchange completely stopped trading, and the client never managed to return the money. According to the plaintiff's statement, the bank tried to hide from the users of the exchange the fact that it had secretly tried to break off partnership relations with the bankrupt institution. The Court of California continues to consider this case.
- In August of this year, a group of MtGox creditors proposed to make changes in the plan of civil rehabilitation of the bankrupt exchange. They offered the platform to send money to the accounts of those exchanges that the creditors themselves will choose. Lenders also offer to pay compensation for altcoins in fiat money because of the possible fluctuation in the rate of the cryptocurrency.
WHY IS IT IMPORTANT?
- Some crypto experts attribute the recession of bitcoin to the bankruptcy of the exchange. In any case, one of the first major falls bitcoin has gone through was due to MtGox.
- On February 24, the exchange announced its closure, provoking a drop in the price of bitcoin by $57. After that, the cost of bitcoin was about $550.