MtGox Creditors Given the Preliminary Ok to Revive the Fallen Exchange

MtGox Creditors Given the Preliminary Ok to Revive the Fallen Exchange

A U.S judge has okayed a preliminary approval plan to allow MtGox creditors to come to a settlement with two executives from the fallen exchange. These executives are Gonzague Gay-Bouchery, MtGox’s former chief marketing officer, and Jed McCaleb the equity stakeholder.

Under the proposed plan, Sunlot Holdings Ltd., an investment company, will buy MtGox for 1 Bitcoin. Sunlot Holdings will then restart the fallen exchange and compensate the shareholders. Previous users of MtGox will also receive a 16.5% equity stake. The 200,000 bitcoins that were later found by MtGox in an old formatted wallet, and the $20 million held by MtGox’s administrator will also be divided with the users.

Before this proposal goes anywhere, it needs to be approved by the Tokyo District Court.

MtGox Creditors

By allowing MtGox creditors the okay to revive the fallen Bitcoin exchange, it will provide previous MtGox customers a method for receiving some sort of compensation. In February, Mt Gox filed for bankruptcy citing that it had lost a total of 850,000 bitcoins, 100,000 being its own. The fallen exchange blamed the Bitcoin’s protocol and the transaction malleability problem for its downfall.

Before the MtGox spiral of doom started, the exchange first halted withdrawals citing a “technical glitch.” The glitch was never fixed, and soon thereafter, transactions were halted as well. After filing for bankruptcy, the exchange was later able to uncover 200,000 bitcoins from an old formatted wallet. This means that the total amount of bitcoins MtGox had lost were 650,000, not 850,000 as was previously believed.

Interestingly enough, research done by the ETH Zurich University in Switzerland found that only 386 bitcoins were lost due to transaction malleability. As of now, nothing concise is known, but investigation will be done in order to solve the mystery of the missing coins.

Image via MtGox