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Mt. Gox Reportedly Nears Repayment Scheme for Former Users

UTC by Tolu Ajiboye · 3 min read
Mt. Gox Reportedly Nears Repayment Scheme for Former Users
Photo: Shutterstock

On Wednesday, defunct exchange Mt. Gox once again revealed a repayment agenda for users who lost funds in its 2014 crash.

Mt. Gox recently announced that its repayment plan would start in “due course” to compensate former users who lost funds when the exchange shut down eight years ago.

Mt. Gox trustee Nobuaki Kobayashi revealed this in a creditors’ note issued on Wednesday. According to Kobayashi, former customers of the Tokyo-based exchange have until September 15th to issue claims. The document further added that creditors who make claims after the September 15th deadline might not be processed.

Although Mt. Gox intends to begin repaying its former customers soon, the crypto exchange has not yet set a definite date. The notice read:

“The Base Repayment Deadline is set by the Rehabilitation Trustee with the permission of the court as the date deemed appropriate for repayment and will be set in due course.”

What Mt. Gox Repayment Plan Bodes for Bitcoin

Amid the imminent disbursement of Mt. Gox funds, speculations suggest that this repayment scheme could adversely impact the price of Bitcoin (BTC). However, Mt. Gox seems prepared to avert any likely BTC market price shock by disbursing the funds in pre-designated portions.

As of press time, BTC was changing hands at $20,097. The leading digital currency had been trading for $19,795, representing a 1.7% drawdown in 24 hours at the time.

Rumors regarding a possible Mt Gox repayment this week first began on Twitter. However, this notion was dismissed online by former users of the defunct exchange, including former Arcane Assets Chief Investment Officer Eric Wall.

The 2014 Crash

Founded in 2010, Mt. Gox was once the biggest crypto exchange in the world. The company was handling more than 70% of all global BTC transactions by early 2014, the same year it shut down. The reason for the shutdown was a massive hack that saw Mt. Gox lose 850,000 Bitcoins, worth $16.8 billion today. In the aftermath of the hack, the Tokyo-based crypto exchange suspended trading and discontinued its website and exchange service. In addition, Mt.Gox also had to file for bankruptcy protection. Furthermore, in April 2014, the company began liquidation proceedings.

Numerous former Mt. Gox users saw their funds go under with Mt Gox when the exchange shut down in 2014. However, these aggrieved users have also been waiting to receive compensation from the defunct crypto exchange. This has played out in a lengthy legal battle between both parties and seen Mt Gox’s compensation scheme delayed several times. In fact, amid the company-client faceoff, former Mt. Gox CEO Mark Karpeles also faced a lawsuit for fraud and negligence. However, Karpeles moved to have the lawsuit dismissed. At the time, his lawyers stated that the court had no personal jurisdiction over Mr. Karpeles. The lawyers maintained:

“Because this Court lacks personal jurisdiction over Mr. Karpeles, this proceeding against him must be dismissed with no further actions taken, including but not limited to the entry of any default.”

Eventually, the case got tossed out last year.

Cryptocurrency news, News
Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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