MT Gox related online foras are littered with one question or variations of it: will I meet the deadline?
The biggest civil rehabilitation in history is now to begin tomorrow after the October 22nd deadline for filing civil rehabilitation claims passes.
The process has been somewhat chaotic. After filing for bankruptcy claims back in 2015, many through Kraken, they are now being asked to file again for civil rehabilitation.
The problem is these year old events have been forgotten by most. Online logins and passwords are not remembered. Few even know just what online logging, the one for Gox, the one for the bankruptcy claim, or something else.
“I can check my balance but I can’t login to the filing system and now I am realizing this might not get resolved in time to file by the 22nd.
So I cam going to spend lots of money to mail via courier first thing tomorrow morning, or should I fly there this weekend from the states to drop it off personally?
There is possibly enough money involved where I have to do all that I can do get the claim form filed in the enough time. and this is turning into a nightmare.”
He is advised to not go in person because imagine if thousands of people suddenly show up at the Gox offices in Tokyo to put their paper application through the letter box. Yet Nobuaki Kobayashi, the MT Gox Rehabilitation Trustee, says in an email:
“If you file a proof of claim by the Offline Method, please make sure that the proof of rehabilitation claim must be received by the Office of the Rehabilitation Trustee by the end of the period for filing rehabilitation claims (i.e., no later than October 22, 2018 (Japan time)).”
A simple reading of that suggests the post needs to arrive at their offices by circa 5PM Japan time on the 22nd of October. As many applications are made from all over the world, however, it might be very difficult to guarantee a delivery by that day. One goxer says:
“My courier just informed that its been delayed and they can guarantee it will be on the flight that arrives on Saturday for Monday delivery.”
It might make it there on Monday, but the timeline is so tight. A little delay and he may miss the deadline. What happens then?
Logically you’d think they will consider all applications dated prior to October 22nd as having been filed within the deadline, but sometime logic and law doesn’t fit, so bureaucracy might get on the way.
In that case, it may be that all post that was received after the 22nd might have to re-file again through a late claims process. Although who knows, perhaps common sense will prevail.
Once all these applications are made and processed, Kobayashi will then have to distribute to tens of thousands of goxers $1.5 billion worth of dollars and crypto, with $500 million of it in fiat and about $1 billion of it in 140,000 BTC and 140,000 BCH.
It is probable all these funds will be distributed through Kraken, meaning that all goxers may have to sign up with them if they haven’t done so already. Kraken said:
“We are working with the rehabilitation Trustee to provide payout support for Kraken clients. On October 5 2018, Kraken executed a memorandum agreement with the rehabilitation Trustee regarding future support from Kraken. However, the details of Kraken’s support have not yet been determined.”
How fast they move now remains to be seen, but nearly five years since bankruptcy was declared, this case may have now reached the stage where only final touches are needed for distribution.
Kobayashi has sold $500 million worth of BTC and BCH. That’s the fiat value amount of all cryptos and fiat holdings on MT Gox at the time of bankruptcy with one BTC fixed at a price of circa $400.
In other words, if Gox had not been bankrupt at that time, it would have needed just $500 million to pay all its customers all they were due.
That means $1 billion is in profits. That has been retained in BTC and BCH, with individuals free to choose whether they want it back in crypto or in fiat.
Then there’s another $250 million worth of bitcoin and bitcoin cash which has been converted into fiat and is sort of ring fenced to cover claims or counterclaims gox had with other businesses that are disputed and are sort of unrelated to the bankruptcy.
So everything is finally in place now for this $1.5 billion to be given back. When, remains to be seen. This year looks unlikely as they make final preparations, but around the beginning of 2019 may seem probable.
How the market would be affected remains to be seen. Most have completely written off these gox holdings, but now that it looks like they might actually receive 3x the fiat amount they thought they lost, some might get excited and might consider it as a nice bonus.
What they will do with it no one knows. There are some 10,000 individuals involved, so some might want the fiat, some might keep on holding. Some who receive fiat might turn it into crypto.
Making it perhaps a happy ending to a terrible series of events as now after years of forced holdings many are in profit and by quite a bit.
So raising that question again of whether history will consider MT Gox as the devil, or perhaps after all as the angel that bootstrapped the bitcoin economy when few were willing to do so or to keep doing so for as long as they did.
Something which may depend on how this distribution progresses, with many of an entire generation now going through a fairly unique process that makes this whole crypto scene just that bit more exciting.