Japan’s Bitcoin Court Case May Create Crypto Millionaires

Roughly $6 billion worth of Bitcoin (BTC) could fall into the hands of thousands of Mt. Gox creditors around the world. It may happen next month when a bankruptcy case in Japan concludes. The Mt. Gox bitcoin exchange case resolution could create a lot of new bitcoin millionaires. That is because a more significant percentage of the 36,800 creditors of Mt. Gox has payout claims in bitcoins. These creditors have been waiting for almost a decade for reimbursement.

Japan-based Mt. Gox was once the most significant bitcoin exchange globally, handling 70% of the world’s transactions. Unfortunately, the company faced a series of hacks leading to the loss of 850,000 bitcoin. As a result, it made them declare bankruptcy. However, the company recovered 200,000 bitcoins and returned them to creditors either as BTC or 2014 fiat currency prices. However, this will depend on whether the country’s lawmakers pass the civil rehabilitation plan.

The effect of paying in BTC

The creditors favor the payouts in BTC because the value of bitcoin has surged dramatically. They are hoping a majority of them vote yes to the civil rehabilitation plan. The deadline of the voting is 8 October online and 20 October through in-person at the Japanese court. Crypto analysts have warned of a market shock if the payout comes in BTC. The recipients may dump their newly acquired BTC en masse.

The executive director at CEX.IO, Konstantin Anissimov, said, ”With thousands of bitcoin and bitcoin cash billed to enter into the market through Mt. Gox there remain fears that the overall impact on price will be brutal when the exchange’s holders liquidate their positions.” Bitcoin pioneer Max Keiser agreed with these sentiments, saying the possibility of a bitcoin dump is weighing on the price.

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The Civil Rehabilitation Plan

If the civil rehabilitation plan passes after 20 October, the trustee to the Mt. Gox will announce the timeline for paying creditors. If the program does not give, the shareholders of the company and the CEO will be wealthy individuals. The other alternative to the civil rehabilitation plan is to settle the creditors’ claims with Bitcoin’s 2014 price. Back then, the BTC price was $450 per coin.

The event will see a surplus estimated to $5.1 billion after paying creditors at the low 2014 prices. In addition, shareholders of the company, Tibanne (88%) and Jed McCaleb (12%), will receive the surplus. Tibanne is the company that owns Mt. Gox.

To pass the proposal, a minimum threshold of 50% is a requirement. However, the coordinator of Mt Gox legal has implored all creditors to vote before the deadline. He also explained that the government of Japan could seize ownership of unclaimed assets.

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The saga of Mt. Gox would still not end with the verdict of the Japanese court. 650,000 BTC are still at large. Attention could now focus on recovering the remaining amount.