Bitcoin

Japanese Court Paves The Way For Mt. Gox To Return $1B In Crypto

Mt. Gox

Four years after bitcoin exchange Mt. Gox collapsed amid the biggest bitcoin theft in history, its former customers may have a chance to recover their lost cryptocurrency. A court in Japan stopped the exchange’s bankruptcy proceedings, potentially allowing at least a billion worth of digital currency to be returned to its rightful owners, Fortune reported.

“Enormous assets…will be returned to creditors of Mt. Gox,” Nishimura & Asahi Partner Shin Fukuoka said in a statement. “This is the creditors’ victory.”

The exchange collapsed in 2014 after 850,000 bitcoins went missing: They were worth around $473 million at the time. Since then, former Mt. Gox CEO Mark Karpelès found some bitcoins, but those have been held in the company’s estate since. But, with the court ending the bankruptcy and starting civil rehabilitation, the exchange’s assets will be able to return assets to its debtors and former customers. In all, Mt. Gox’s estate contains 170,000 coins of bitcoin and bitcoin cash – worth about $1.2 billion in the current market.

At its peak, Mt. Gox handled 80 percent of the world’s Bitcoin trades. It filed for bankruptcy three years ago after the 850,000 Bitcoin went missing. At the time, that Bitcoin amount represented a value of approximately half a billion U.S. dollars. Mt. Gox lost an additional $28 million in cash from its Japanese bank accounts.

Mt. Gox maintains that hackers were to blame for the lost bitcoin, and that the hackers gained access to the digital currency through a security flaw in the system.

The failed bitcoin exchange, which was the biggest in the world, is caught up in what Reuters has called a “Russian doll” of global bankruptcies, angry creditors and lawsuits. The recovered bitcoin by Mt. Gox in the aftermath of the breach — under Japanese exchange law — will reportedly only go back to customers in a fractional amount.

“It’s a legal twilight zone. I wouldn’t be surprised if it took several years more,” Kim Nilsson, a Swedish software developer, who had more than a dozen bitcoins at Mt. Gox, has said.

 

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