Mt. Gox Creditors Finally Receiving Compensation after Decade-Long Wait

Mt. Gox Creditors Finally Receiving Compensation after Decade-Long Wait

UTC by Benjamin Godfrey · 3 min read
Mt. Gox Creditors Finally Receiving Compensation after Decade-Long Wait
Photo: Shutterstock

The extended wait for repayment has been a source of frustration for Mt. Gox creditors, and the delay has led to speculation about its potential impact on the crypto market.

After a decade of uncertainty and numerous delays, creditors of the now-defunct crypto exchange Mt. Gox are finally starting to receive compensation for their blocked Bitcoin deposits. The process, initiated by the trustee overseeing Mt. Gox’s estate has kicked off with repayments sent in Japanese Yen through PayPal, as reported by users on various social media platforms.

Delayed Compensation to Mt. Gox Creditors

Reports from the Reddit page r/mtgoxinsolvency and other platforms indicate that users have begun to confirm receiving payments. A Reddit user, Free-end254, shared a screenshot of the PayPal receipt confirming the payment, with the email stating that repayments would continue into 2024 due to the large number of rehabilitation creditors and the complexity of the repayment process.

The first payment confirmation emerged on December 21, with a user claiming to have received funds via bank transfer in Japanese Yen. Some users expressed initial skepticism, believing the emails to be phishing attempts, but later confirmed the legitimacy of the payments.

According to reports, creditor repayments will be made in various tranches, including the basic repayment, the early lump-sum repayment, and the intermediate repayment. The procedure is projected to last until 2024, compensating creditors patiently waiting for their monies to be returned.

Notably, this development comes only shortly after Nobuaki Kobayashi, the trustee overseeing Mt. Gox’s estate communicated with rehabilitation creditors via email on November 21, announcing the commencement of repayments. The trustee did not specify the timing of repayments for individual creditors but emphasized that the process would extend into the following year.

Earlier in September, the court allowed Mt. Gox to extend the repayment deadline from October 31, 2023, to the same date in 2024. Kobayashi clarified that some repayments could be initiated as early as the end of the year for creditors who had provided the necessary information.

Meanwhile, earlier in February, two top creditors accounting for one-fifth of all Mt Gox claims had chosen a Bitcoin (BTC)-based payout. At the time, reports suggested that the defunct New Zealand-registered exchange Bitcoinica and MtGox Investment Funds (MGIF) had reached an agreement on a crypto settlement.

Impact on Bitcoin Price

The extended wait for repayment has been a source of frustration for Mt. Gox creditors, and the delay has led to speculation about its potential impact on the crypto market. As creditors start receiving their assets, there is concern that the Bitcoin price may be affected as some creditors may choose to sell or exchange their received crypto assets.

Mt. Gox, once the largest Bitcoin exchange globally, collapsed in 2014 after a devastating hack that resulted in the loss of a notable amount of Bitcoin. The rehabilitation process has been prolonged, with several delays and complications along the way. Notably, the former CEO of Mt. Gox.

Bitcoin News, Cryptocurrency News, News
Related Articles