In what is likely to be good news for its many creditors, Mt. Gox, the defunct Bitcoin exchange platform, is set to halt bankruptcy proceedings as it moves into civil rehabilitation. Mt. Gox achieved “crypto-infamy” in 2014 when it declared bankruptcy. The platform became insolvent after suffering one of the most significant hacks in the history of the cryptocurrency market.

On June 22, 2018, the Tokyo District Court ordered Mt. Gox to move out of criminal bankruptcy and begin civil rehabilitation proceedings. The ruling was contained in a statement issued by Nobuaki Kobayashi, the Mt. Gox trustee. By this ruling, Mt. Gox creditors are in line to receive compensation for their losses. According to the statement, there is a temporary halt on Mt. Gox’s existing claims filing process as it transitions toward civil rehabilitation.

Kobayashi’s document also provided a tentative schedule for the civil rehabilitation process. Creditors have until October 22, 2018, to submit their claims. This October deadline applies to both creditors who have previously filed claims and those who missed the previous deadline. Based on the tentative schedule, the “proposed rehabilitation plan” will be released in February, 2019.

The civil rehabilitation is a massive victory for Mt. Gox creditors. Funds that would hitherto have been distributed to the shareholders of the company will now be disbursed to those who lost their cryptocurrency assets to the hack. A coalition of aggrieved creditors released a statement praising the ruling. They also said the fight wasn’t over until creditors are compensated for their losses, saying,“. . .this victory has not been realized yet. The victory will come to creditors when Mt. Gox makes payment to creditors and creditors actually receive such payment.”

In addition to Mt. Gox creditors, regular Bitcoin traders will also heave a sigh of relief seeing as there will be no more selloffs from the Mt. Gox trustee. Dubbed the “Tokyo Bitcoin whale”, Kobayashi’s cryptocurrency selloffs are suspected to have contributed to some significant price dips in the Bitcoin market.

Before the ruling, Kobayashi had disposed of more than $400 million in Bitcoin and Bitcoin Cash. According to Cryptoground, the Mt. Gox bankruptcy wallet still holds 137,891 BTC (approximately $878 million). While there are no longer any selloffs on the horizon, Kobayashi is still in charge of the proceedings, as explained in his statement on the company’s website:

“The power and authority to administer and dispose of MTGOX’s assets is still vested exclusively in me, and I will implement the civil rehabilitation proceedings, including the administration of MTGOX’s assets and the investigation of claims, subject to the Tokyo District Court’s supervision.”

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