MtGox customers may be able to receive bankruptcy distributions in Bitcoin via Kraken

Over a year has passed since the collapse of Japanese Bitcoin exchange MtGox, taking with it 744,408 Bitcoins, which had been irretrievable henceforth.

Today, MtGox has issued a notice to its customers which details the procedure for filing bankruptcy claims to the trustee, Attorney-at-Law Nobuaki Kobayashi.

The notice, which is specifically for users of the exchange rather than bankruptcy creditors which had not been customers, states that in consideration of various factors, including the extremely large number of MTGOX Bitcoin exchange users located around the world, the bankruptcy trustee consulted with the Tokyo District Court with regard to the method of filing bankruptcy claims.

With the support of Payward Japan K.K. and its group companies, which operates the San Francisco-based Kraken Bitcoin exchange, a virtual currency venue which also has users around the world, the bankruptcy trustee created a system that will enable users to file, through a website, bankruptcy claims against MtGox regarding Bitcoin and cash (“Exchange-Related Bankruptcy Claims”).

Back in November last year, Jesse Powell, CEO of Kraken stated that “The outcome of the MtGox bankruptcy proceedings will deeply affect the Bitcoin community as a whole.”

At that time, the firm stated that it had “decided to volunteer resources and expertise in an attempt to minimize damage to creditors, restore faith in the Bitcoin community, and demonstrate trusted leadership in the industry.”

Duties that Kraken was expected to be asked to carry out included assisting in the investigation of possible lost or stolen Bitcoin, taking an active part in the creation of a system to file and investigate claims, helping to distribute Bitcoin and/or fiat assets to creditors and exchanging Bitcoin to fiat currency when needed.

By using this newly proposed system, users throughout the world will be able to file Exchange-Related Bankruptcy Claims in accordance with Japanese Bankruptcy Law and other laws and regulations, and participate in MtGox’s bankruptcy proceedings, easily without having to spend a considerable amount of time and expense.


The smooth filing of Exchange-Related Bankruptcy Claims by Users throughout the world using this online method is intended to ensure the proper and smooth implementation of bankruptcy proceedings and is in the interests of all concerned parties to the bankruptcy proceedings, including Users, and therefore, the bankruptcy trustee requests you to cooperate by filing your Exchange-Related Bankruptcy Claim using the Online Method.

The period for filing bankruptcy claims, which was set by the Tokyo District Court, is until May 29, 2015 (Japan time).

A User who wishes to select option must open an account with Kraken and become a Kraken user.

By becoming a Kraken user, it may be possible for the MtGox customer to enjoy certain benefits such as the ability to receive bankruptcy distributions in Bitcoin (it has not been determined with regard to whether distributions in Bitcoin will be possible, as the bankruptcy trustee is still investigating the matter).

Therefore, Users who wish to enjoy these potential benefits are requested to consider becoming Kraken users. The bankruptcy trustee advises users to refrain from giving to any person any details of user names, e-mail addresses or passwords which were originally registered with the MtGox Bitcoin exchange, making it clear that in no event will MtGox or the bankruptcy trustee be liable or responsible for any loss that may be incurred by a user, or take any measures, if the user gives such information to a third party.

For security reasons, the bankruptcy trustee recommends that a user’s password for the e-mail account relating to the e-mail address which was originally registered with the MtGox Bitcoin exchange is set to be different from the password to log in to the MtGox Bitcoin exchange which was originally registered with the MtGox Bitcoin exchange, and that all passwords for the e-mail accounts relating to the e-mail address which was originally registered with the MtGox Bitcoin exchange and the e-mail address which is chosen, using the new system contains at least 12 characters, and consists of a combination of at least one upper case letter, one lower case letter, one number and one special symbol; and, to any extent possible, users should use a two-step authentication process.

Bankruptcy Distributions

In the case where the bankruptcy trustee decides to make bankruptcy distributions in Bitcoin, it is planned that the bankruptcy trustee will make Bitcoin bankruptcy distributions via Kraken’s system, and therefore it is anticipated that bankruptcy creditors who are not Kraken users will not be able to receive Bitcoin Distributions.

Therefore, users who wish to receive Bitcoin distributions would have to become Kraken users in order to receive Bitcoin Distributions. The bankruptcy trustee is currently investigating whether Bitcoin Distributions will be possible and the matter has not yet been determined. Consequently, becoming a Kraken user does not guarantee that Bitcoin distributions will be made.

For the official document from MtGox, including full terms, conditions and instructions, click here.

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