The leading crypto exchange lost its status in February 2014 and turned into a bankrupt because of the 744,000 Bitcoin theft. The creditors do not lose hope to get their money back. The petition to reclaim the lost funds was started in November 2017, but the first repayments are expected in summer 2019.
Mt. Gox was the top crypto exchange back in 2014: over 70% of all Bitcoin transactions were handled via this Japan-based crypto giant. Everything changed in February 2014. First the exchange halted Bitcoin withdrawals, than on the 24th of February 2014 it suspended all the trading and shut down the website.
Mt. Gox declared bankruptcy and admitted the fact of massive theft. 744,000 BTC were stolen – at that moment this amount was the equivalent of about $350 million. The investigation was long and complicated. It took three years to determine the chief suspect: BTC-e Operator Alexander Vinnik. The influence of the Mt. Gox’s bankruptcy was huge. The events of the February 2015 led to the 35% decline in Bitcoin price. Today the lost amount of 744,000 BTC would be over $5.5 million. The rise of the dominant cryptocurrency led to the development in the case of Mt. Gox.
A group of creditors of Mt. Gox started fighting for the lost funds. The petition for retrieving the lost Bitcoins was started in November 2017. It took almost 8 month to get to the release of the initial basic policy for the rehabilitation – but the creditors should be satisfied with this document. According to it, the trapped funds will be repaid in the same cryptocurrency. A brief note: the price of Bitcoin on the 25th of February 2014 was $539.
The latest news on the case arrived on the 2nd of August. The lawyers working on the side of Mt. Gox published the revised basic policy for preparing a rehabilitation plan. The most notable aspect of the new version of this document is the terms of repayments: creditors will not get their money till summer 2019.
The story of Mt. Gox’s fall is not clear. The exchange declared itself a bankrupt – but later Mt. Gox stash was revealed. During the 3 month $400 million in Bitcoin and Bitcoin Cash were sold. That event is claimed to trigger the market downturn. Nobuaki Kobayashi, the rehabilitation trustee also known as Mt. Gox ‘Bitcoin Whale’, said: “As in sales from December 2017 to February 2018, upon consultation with cryptocurrency 6 transaction experts, Bitcoin and Bitcoin Cash were sold in a manner that had no effect on market price and not by ordinary sale on an exchange, while ensuring the security of the transaction to the extent possible.”
At the moment the Mt. Gox stash is 166K BTC that is almost $1.3 billion. This money is expected to be distributed among the ex-creditors of the Japanese exchange. The creditors believe that the most simple, convenient and effective way of repaying is using the cryptocurrencies, not the fiat equivalent. But the process will take some time.
According to the commencement order, the rehabilitation plan will get fully approved in May of June of 2019. Till then the creditors will not get a single Bitcoin. The document also states that “We are of the opinion that most of the assets, including approximately 166,000 BTC and 168,000 of BCH and other derivatives currently held by Mt. Gox, should be paid to creditors at the time of the first payment.”
The story of creditors and Mt. Gox confrontation will continue on the 26th of September: the creditors of Mt. Gox will meet to update the status of the civil rehabilitation process.