By
Temitope Olatunji
April 26th, 2024
The accidental double payment of settlement funds to Mt. Gox creditors adds a new chapter to the saga of one of the crypto industry’s earliest and most remarkable failures.
In a recent development, multiple reports on Reddit indicate that some creditors of the infamous Mt. Gox crypto exchange have received settlement funds twice due to a system glitch. The revelations have led to discussions, debates, and even humor within the crypto community.
Mt. Gox Creditors Email Admission
The issue came to light when Reddit user u/rlycreativename shared the contents of an email, claimed to have been received from the Mt. Gox Rehabilitation Trustee.
The email detailed the unintended double transfer of settlement funds via PayPal, stating:
“The Rehabilitation Trustee has transferred money to you… as the first repayment in the civil rehabilitation proceedings of MtGox Co., Ltd. However, due to a system issue, the money transfer to you was inadvertently made twice.”
The Rehabilitation Trustee requested affected users to verify their PayPal accounts and return the duplicated amounts promptly, emphasizing that the second transfer was an error and not authorized for recipients.
Following the revelation, Reddit was abuzz with discussions among creditors. One user, u/PPvotersPostingLs, claimed to have promptly returned the excess payment, displaying a sense of understanding for the trustee’s predicament:
“I sent it back. We all make mistakes, don’t be too hard on Mister Kobayashi.”
However, not all creditors were willing to comply. Some argued that the Mt. Gox Trust should undergo a Know Your Customer (KYC) process and wait a decade before expecting the return of the erroneously transferred funds. User u/JALEW expressed a willingness to return the money but added conditions highlighting the lingering distrust among Mt. Gox creditors.
Despite the jestful comments and reluctance from some Mt. Gox creditors, legal consequences could follow for those who decide to keep the duplicated funds. In a similar incident in 2022, two sisters in Melbourne were accidentally sent over $10 million instead of $100 by Crypto.com. One of the sisters faced arrest for not returning the funds, highlighting the serious repercussions of withholding mistakenly transferred money.
A Decade-Long Saga
The Mt. Gox exchange, once a prominent player in the crypto market, fell victim to one of the earliest crypto exchange hacks in history. Over 740,000 Bitcoin (BTC) were stolen, with the loss initially valued at approximately $460 million. However, with the surge in Bitcoin’s price over the years, the current estimate surpasses $31 billion.
After declaring bankruptcy in the aftermath of the hack, many Mt. Gox creditors have endured a protracted legal battle lasting nearly a decade to secure a settlement. The recent distribution of settlement payments through PayPal on Tuesday marked a long-awaited milestone for these creditors.
The accidental double payment of settlement funds to Mt. Gox creditors adds a new chapter to the saga of one of the crypto industry’s earliest and most remarkable failures. The incident raises questions about the complexities of managing restitution in the crypto space and highlights the challenges faced by both creditors and trustees in the aftermath of such catastrophic events.
As the Mt. Gox story unfolds, the crypto community will be closely watching to see how creditors navigate this unexpected twist in their pursuit of justice.