Defunct Mt Gox to start repaying creditors After a Decade

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Key Takeaways

  • The repayment schedule will start in early July 2024.
  • Mt Gox announced that the repayments will be made in bitcoin and bitcoin cash.

Mt. Gox, the defunct Bitcoin exchange that collapsed in 2014, announced on Monday it will begin distributing assets stolen from clients during a major hack in the first week of July 2024.

In a statement on the Mt. Gox website, trustee Nobuaki Kobayashi detailed the preparations for the repayments. โ€œThe Rehabilitation Trustee has been preparing to make repayments in Bitcoin and Bitcoin Cash under the Rehabilitation Plan.

The repayments will be made from the beginning of July 2024,โ€ Kobayashi explained. He emphasized that due diligence and specific safety measures need to be completed before the payments can proceed, asking for continued patience from creditors.

Mt. Gox was once the leading Bitcoin exchange globally, managing over 70% of all Bitcoin transactions. However, a series of unnoticed hacks between 2011 and 2014 led to the loss of 850,000 Bitcoin, causing the exchange to shut down in 2014. At todayโ€™s prices, the lost Bitcoin is valued at over $51.9 billion, with Bitcoin trading above $61,100.

The collapse left approximately 127,000 creditors in financial limbo, with more than $9.4 billion worth of Bitcoin owed to them. Kobayashi reiterated the need for patience, stating, โ€œWe will commence the repayments in the order of the cryptocurrency exchanges with which the Rehabilitation Trustee will complete the exchange and confirmation of the required information. Please wait for a while until the repayments are made.โ€

A significant step in the repayment process occurred on May 28, when Mt. Gox transferred 141,686 BTC, valued at $9.62 billion, into a new wallet. This marked the first on-chain movement of funds from the exchange in over five years.

Despite the latest development, there is skepticism about whether the current deadline will be met. The repayment schedule has faced multiple delays, with a previous deadline set for October 31, 2023.

The new target is now July 2024. The exchange faced multiple hacks between 2011 and 2014, resulting in the loss of a staggering 850,000 BTC. Following the shutdown, Bitcoinโ€™s price dropped to a local low of $420 in February 2014.

As the repayments approach, there is considerable anticipation and concern within the cryptocurrency community. Many crypto enthusiasts opine that the potential influx of BTC into the market could create selling pressure, as early investors may choose to liquidate their assets, which have significantly appreciated in value.

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Saniya Raahath
Saniya Raahath

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