The online voting period for the defunct crypto exchange Mt. Gox creditors to approve or reject the proposed civil rehabilitation plan has ended – and what happens next depends on the still unannounced results.
The infamous Tokyo-based exchange closed its doors in 2014 after hackers stole thousands of bitcoin in a series of attacks. Earlier this year, Fortress Investment Group offered the creditors about 80% of their claim value, but the Civil Rehabilitation Plan from Mt. Gox’s Japan-based trustee, attorney-at-law Nobuaki Kobayashi, would refund creditors about 90% of their claim value.
The voting began at the end of May, with the online voting closing on October 8. Per some news outlets, the in-person voting remains open until October 20, which is when the results may be announced.
Per the notice at the time the voting began, for the plan to be approved, a minimum of 50% of the voting rights holders need to say ‘yes’ to it, while those who do not vote will be deemed as have voted against it.
Furthermore, “it is anticipated that the [online rehabilitation claim filing system] will be used by creditors for procedure for receiving repayments in the future,” the notice said.
It is yet unknown what the next step in the saga will be.
Per the publicly available information compiled by crypto exchange Kraken, if the plan gets approved, the approved claimants would receive:
- a base, fixed payment;
- two options for partial reimbursement: 1) accept an earlier, faster lump-sum payment, or 2) accept a later lump-sum payment, after all other claims have been settled, but for a possibly larger amount.
Claims will be payable in a combination of JPY and bitcoin (BTC) or bitcoin cash (BCH), depending on the claim.
According to a WizSec, that describe themselves as Bitcoin security specialists, blog post, every creditor would receive up to JPY 200,000 (USD 1,771) as this base “Small Sum Payment,” which would count first towards any fiat claims, then towards crypto claims. “This helps remove many small claims and simplifies final distribution,” it said.
Then, the creditor would need to make the choice between the Early Lump-Sum Payment or the Final Payment. The former would give them a fixed 21% of their remaining claim. The latter is a riskier one and it “means waiting in all likelihood several more years until the end of civil rehabilitation,” it said. The final payout rate will depend on actual assets and liabilities remaining at that point, but the payout could be higher than the 21% – or it could drop below that. “In extreme cases […] the trustee could be forced to liquidate more coins.”
If a creditor opts to receive BTC/BCH, the trustee will credit their account at a designated exchange. Otherwise, said the post, the trustee will liquidate the coins on the creditor’s behalf and add the proceeds to their fiat payment.
If a bankruptcy claim has been filed, this will affect the payout amount, as “for any fiat claims from the bankruptcy process, the full bankruptcy valuation will be paid out,” including delay damages for the period until the start of civil rehabilitation, said the post.
There are some BTC/BCH 860,000 and JPY 8.8bn in determined claims, and about BTC/BCH 130,000 and JPY 50bn in undetermined claims (the claim is being disputed).
The Mt. Gox estate is said to hold BTC 141,686 (USD 8bn), BCH 142,846 (USD 87m), and some JPY 68bn (USD 601.8m).
How much would you get?
Per the calculator provided by WizSec, if the approved claim size is BTC 1 and BCH 1, the estimated civil rehabilitation valuation is JPY 749,319 for the BTC amount and JPY 97,481 for BCH, with the total claim valuation of JPY 846,800 (USD 7,494).
We will opt for ‘no’ regarding the bankruptcy claim question, and will choose early payment, bringing the total amount – along with the base payment – to JPY 966,664 or USD 8,554.
Should we choose the final payment option, the payout may be 23.45% of the claim, resulting in a total number of USD 9,556.
The results of the vote so far remain unknown. It is also unclear how the approval of the plan – should it pass – would affect the market, with all that BTC being released back into the wild.
Meanwhile, besides voting ‘yes’ for the proposal, “the only alternative on the table is to return to bankruptcy, which means less money for everyone,” stated WizSec.