TOKYO -- Creditors of defunct bitcoin exchange Mt. Gox, which went under in 2014, have filed a petition with the Tokyo District Court, angry that the surge in the cryptocurrency's value could leave Mt. Gox sitting on a profit of well over 200 billion yen ($1.7 billion).
They are asking the court to halt the company's bankruptcy proceedings and switch to a civil rehabilitation process, which would allow creditors to collect payments in bitcoin, which is far more valuable today than when Mt. Gox collapsed three years ago.
Creditors complain they will be treated unfairly under the current bankruptcy proceedings, which determine payments owed to creditors based on the market value of a company's assets at the time of bankruptcy. Under those rules, Mt. Gox's bitcoins would be converted to yen based on their market value of about 50,000 yen ($441) each when Mt. Gox went under in 2014. Their value has since increased fortyfold to around 2 million yen each.
Under civil rehabilitation rules, creditors would be able to receive payments in now much more valuable bitcoin.
Creditors have protested that Mt. Gox will retain a big profit under the current procedures. At the exchange rate, Mt. Gox would have well over 200 billion yen left over after paying off its creditors. They object that this profit would go to Mark Karpeles, a large shareholder in the exchange's parent company who has been accused of embezzlement and other violations.
The Tokyo District Court is considering whether to shift to civil rehabilitation proceedings in the Mt. Gox case. The decision will come sometime after the new year.