We submitted a motion to the Tokyo District Court on March 28, 2018, urging the court to promptly issue a decision to commence rehabilitation proceedings and convert the bankruptcy proceedings to rehabilitation proceedings.

Even though about a month has elapsed since the Examiner’s report was submitted, the court has not yet issued a decision to commence rehabilitation proceedings. We cannot help but say that it is taking too long.  The report states that it is reasonable to make a decision to commence rehabilitation proceedings on the condition that “measures taken to ensure the benefits of the bankruptcy creditors” are satisfactory. However, the bankruptcy trustee has not yet informed the creditors whether these measures will be taken, and the bankruptcy trustee is of the opinion that the court should decide and that the bankruptcy trustee is not in a position to judge.

In order to resolve the situation, we submitted the motion to issue a decision to commence rehabilitation proceedings.

Thank you for your continued support.

As we previously informed you, Mt. Gox’s creditors meeting was held on March 7, 2018. Handouts are available on the following Mt. Gox bankruptcy trustee’s website:

https://www.mtgox.com/img/pdf/20180307_report.pdf

1. Report from the bankruptcy trustee

Details are posted on the above website. Especially noteworthy is that the bankruptcy trustee sold approximately 35,000 BTC and 35,000 BCH, and therefore obtained more than 40 billion yen (400 million dollars) from December 2017 through February 2018.

2. Q&A session

Some creditors have said that they hope that these bankruptcy proceedings will be converted to civil rehabilitation proceedings.

A summary of the Q&A session is as follows:

Q1.     What is the meaning of the following terms stated in the examination report submitted by the examiner on February 28, 2018?

–   “the bankruptcy creditors (especially those having monetary claims corresponding to bankruptcy claims) who filed proofs of claims in the bankruptcy proceedings of Mt. Gox”;

–   “the benefits already expected to be obtained in terms of the bankruptcy proceedings”; and

–   “measures taken to ensure the benefits of the bankruptcy creditors”.

A1.     It is the examiner that wrote the examination report.  Therefore, we [the bankruptcy trustee] cannot answer regarding its contents.  We will discuss and consider the future direction with the bankruptcy court.

Q2.     Have you made a specific plan about the “measures taken to ensure the benefits of the bankruptcy creditors” stated in the examination report?  Do you intend to make any effort for the commencement of civil rehabilitation proceedings as the bankruptcy trustee?

A2.     We will discuss and consider the “measures taken to ensure the benefits of the bankruptcy creditors” with the bankruptcy court.  We understand the examiner’s concerns regarding the issue.  Therefore, we are ready to hear suggestions from creditors.

Q3.     When the content of the “measures taken to ensure the benefits of the bankruptcy creditors” has been decided, will we have the opportunity to receive an explanation beforehand as creditors?  Will I have a chance to state my opinion as a major creditor?

A3.     We will notify the creditors of our plan once it is determined.  We will hear the creditors’ opinions, and we would appreciate it if you could send us your written opinion.

Q4.     When and how did you sell BTC and BCH?  What was the difference between the sales figures for BTC and BCH?  Have you obtained any information from the U.S. Department of Justice on the disappearance of BTC?

A4.     We sold them at the market price through the cryptocurrency exchange service provider from December 2017 through February 2018.  The difference between the sales figures for BTC and BCH was just the timing of suspending sales; therefore, we did not have any particular intention.  We have not obtained any information from the U.S. Department of Justice.

Q5.     Please explain the current situation concerning the bankruptcy claims assessment procedure applied for by CoinLab, Inc.  Do you have any plans to pursue the liability of officers?

A5.     We do not have any specific ideas on settling the case for the time being, but we may consider that depending on the future situation.  We did consider suing Mr. Karpelès, but now it does not seem to be productive because he has gone bankrupt.

Q6.     Why don’t you distribute funds to the creditors even though there is enough cash in the bankruptcy estate?

A6      We obtained the cash recently by selling BTC and BCH.  With respect to distribution, there is an issue concerning assessing the amount of BTC creditors’ claims; therefore, it is difficult to determine whether proceeding with the distribution process would be desirable for the creditors.

Q7.     I think it is unjust to distribute the remaining assets to the shareholders of Mt. Gox.  Why don’t you proceed with the civil rehabilitation proceedings as Mt. Gox’s bankruptcy trustee?

A7.     We apologize if we have previously provided a misleading explanation, but we do not oppose transferring these bankruptcy proceedings to civil rehabilitation proceedings.  We understand the examiner’s concerns on the issue; however, it is the Tokyo District Court that has to decide whether to commence civil rehabilitation proceedings.

Q8.     I think it has taken far too long to proceed with the bankruptcy proceedings.  Is this due to the bankruptcy trustee neglecting its duties?

A8.     We recently obtained more than 40 billion yen (400 million dollars ) by selling BTC and BCH.  With respect to distribution, there is an issue concerning assessing the amount of BTC creditors’ claims; therefore, it is difficult to determine whether proceeding with the distribution process would be desirable for the creditors.

Q9.     I have never heard about the sale of BTC and BCH.  Why did you sell them when the market price of BTC crashed?  Why did you sell them in such a hurry?  Is selling BTC and other assets part of the “measures taken to ensure the benefits of the bankruptcy creditors” as pointed out by the examiner?

A9.     From the outset of the bankruptcy proceedings, we informed all relevant parties that we were going to sell BTC and BCH at the appropriate time.  We discussed this with the Tokyo District Court and decided when we should sell them.  Some creditors were of the opinion that we should sell BTC and BCH soon.  We believe that obtaining a lot of funds made it possible for us to take the “measures taken to ensure the benefits of the bankruptcy creditors”.

The Examiner has submitted The Examiner’s Report as of February 28, 2018, but there are some conditions to fulfilling the CR requirements. Although the specific content of these conditions is not clear, as it is necessary to satisfy these conditions, it will require some more time to reach a decision to commence the CR.

As MTGOX’s creditors meeting is scheduled to be held on March 7, 2018, we will attend the creditors meeting, and confirm the current status of the bankruptcy proceedings.  We plan to inform you, by posting an article reporting on the contents of the meeting.

The Examiner has submitted The Examiner’s Report to the Tokyo District Court, as of February 28, 2018. The conclusion of the report is as follows.

The Examiner considers that MTGOX does not fall under Article 25, Items 2 to 4 of the Civil Rehabilitation Act. However, this conclusion assumes that the following measures are taken before the decision to commence the rehabilitation proceedings (in other words, the discontinuation of the bankruptcy proceedings), that ensure the benefits of the bankruptcy creditors (especially those having monetary claims corresponding to bankruptcy claims) who filed proofs of claims in the bankruptcy proceedings of MTGOX.  Those benefits are the benefits already expected to be obtained in terms of the bankruptcy proceedings, considering the size of the bankruptcy estate formed up to the present time.

The court has not decided whether or not CR shall commence; however, pursuant to the report, we expect that the court will issue an order to commence CR, with the condition that Mt. Gox will take measures to ensure the benefits of the bankruptcy creditors. We do not have any information concerning the details of such measures, but we will inform you of it when we have received it.