Mt. Gox Trustee has released details regarding the amounts of BTC and BCH and fiat approved for payouts to creditors of the crypto exchange Mt.Gox that collapsed in 2014.
At the same time, Mt. Gox Legal, a team representing about 1,000 creditors of the defunct crypto exchange, have aired their views concerning the distribution of assets accrued from forked coins.
The group has reportedly warned that any mass sale of the said forked coins could affect prices and render them worthless.
According to Nobuaki Kobayashi, the trustee of Mt.Gox, the total secured assets include 141,686.35 Bitcoin (BTC) and 142,846.35 Bitcoin Cash (BCH), all valued at about $593 million. There is also cash totaling 69,553,086,521 Japanese yen (about $629,594,540)
However, a report by the trustee shows that claims amount to 802,521 BTC (worth over $3.2 billion) and 792,296 BCH (worth over $124 million). Approved cash claims amount to $38,165,664.
What this means is that there isn’t enough cryptocurrency or fiat to cover all the payouts in the approved claims.
Kobayashi has set April 26, 2019, as the deadline for submitting a rehabilitation proposal.
Mt.Gox Legal’s take on fork coins
The Mt. Gox Legal group has said that its plan does not constitute a formal rehabilitation proposal as envisioned under Japanese law. However, the group has considered the distribution of the numerous coins that forked off Bitcoin since the exchange collapsed five years ago.
Addressing the issue of forked coins, Kobayashi explained that cryptocurrencies that “split from BTC” held by Mt.Gox belong to the exchange’s estate and will thus be distributed to the creditors.
These new coins include Bitcoin Gold (BTG), BitcoinX (BCX), Lightning Bitcoin (LBTC), Bitcoin Diamond (BCD), Bitcoin Private (BTCP), Super Bitcoin (SBTC), Bitcoin Interest, Clams, BitCore (BTX) and Bitcoin Atom (BCA).
According to the group, these coins make up a massive trove that would overwhelm any exchange, in addition to presenting complexities when it comes to handling the private keys.
The group’s draft also noted that selling these coins en masse would not only lead to a decline in the value of said tokens but also not be in the interest of the creditors.
Mt.Gox Legal therefore proposes that the BTC and BCH be distributed or moved and then the trustee auctions off the private keys of the forked coins.
The group also anticipates the recovery of supposedly lost Mt.Gox assets, saying that the process needs to institute a legal entity that will legally receive “any funds discovered” after the rehabilitation process is concluded.
The entity would be in charge of distributing recovered assets to all creditors.
Among its final recommendations, the group urges that the trustee avoids any more sales or purchases of BTC and BCH as has been the case in the past.
Also notably, it wants former CEO Mark Karpeles, and shareholders Jeb McCaleb and Tibanne not to receive any compensation- whether, in fiat, crypto or other benefits paid out in kind.
Karpeles and majority owner Tibanne are among entities from who the Mt.Gox estate is trying to recover some of the lost assets.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.