One judge in the United States has already ruled that investors who lost money in the Mt. Gox hack won’t find any recourse on U.S. soil. This hasn’t stopped others from trying, though, and a case in California is now waiting to be heard by a federal judge to determine if victims of the failed exchange can seek financial relief. However, investors are now asking the court to stay the case until next February.
Reuters reported that the plaintiffs in the case, which was launched by Joseph Lack, and Mt. Gox financial partner Mizuho Bank have asked the judge to put the case at the bottom of the pending cases stack. They want to wait until at least February 28, 2019, in order to give everyone time to find out if the current payout schedule offered by the exchange’s trustee, Nobuaki Kobayashi, is going to be fulfilled in its entirety or only partially. Once all parties are able to understand better the schedule, they say that they will be in a better position to inform the court how to proceed.
Kobayashi announced last month that he had sold a significant amount of Bitcoin Core (BTC) to raise $617 million in order to make restitution. The amount is expected to be able to cover all of the losses and not just provide partial compensation, as had previously been expected.
The trustee added that the Mt. Gox estate also has under its control another 137,000 BTC. According to current conversion rates, this equates to around $896.6 million. When the purported hack took place in 2014, an estimated $450 million was allegedly stolen.
Lack introduced the lawsuit following a loss of $40,000 that he had given to Mizuho Bank as a deposit to be applied to his account with Mt. Gox in 2014. That deposit was never entered into his account and he never recovered his money. The timing of the deposit coincided with the issues seen on the exchange, which abruptly shut down on February 7, 2014.
Mizuho has already made attempts to have the lawsuit thrown out. It claimed two months ago in a court appeal that the money transfers it received on behalf of customers in California were only “passive” and that it was not liable for anything that had transpired. The courts tossed the appeal, calling them unconvincing.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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The lawyer appointed to oversee the Mt. Gox refunds, Nobuaki Kobayashi, has reportedly liquidated around $230 million worth of Bitcoin BCH and Bitcoin Core (BTC) in the past four months. Kobayashi made the revelation in a statement (in pdf) yesterday, adding that he will soon provide additional information to creditors on the next steps needed to recuperate their investments stemming from the 2014 hack.
Kobayashi has made several large sell-offs since he was selected to be the Mt. Gox trustee last year. In the latest, and final, round, he indicated that he had sold a total of 25,331 Bitcoin BCH and 24,658 BTC. He added that the sell-offs took place “during the period from the 10th creditors’ meeting in the Bankruptcy Proceedings to the commencement of Civil Rehabilitation Proceedings.” That meeting took place on March 7.
In explaining the sale, Kobayashi said in his announcement, “Due to the Sale, the bankruptcy trustee has already secured a suitable amount of money to secure the interests that are expected to have obtained by BTC creditors under the Bankruptcy Proceedings in connection with BTC claims to be treated as non-monetary claims under the Civil Rehabilitation Proceedings. Accordingly, the bankruptcy trustee has determined that the interests expected to have already been obtained in the Bankruptcy Proceedings can be secured without taking the profit-securing measures under the Trust Agreement and Guarantee Entrustment and Guarantee Agreement for the BTC claims, and the BTC claims are not included in the subject protected claims under the Trust Agreement and the Guarantee Entrustment and Guarantee Agreement.”
This past June, a Japanese court signed off on a petition that would ultimately allow the exchange to begin civil rehabilitation. The approval of that petition paved the way for creditors to be repaid in cryptocurrency, instead of fiat, effectively ending the massive sell-offs. This was seen as good news by the crypto industry, as the sell-offs could have a potentially negative impact on the value of the digital assets.
According to the figures, a single BTC would have been worth around $8111 and Bitcoin BCH, $1195, based on the average price over the four-month period.