Key takeaways:
- Nobuaki Kobayashi has formally extended the deadline for repaying the exchange’s creditors from October 31, 2023, to October 31, 2024.
- For rehabilitation creditors who have submitted the relevant information, repayments will also be made in sequence as early as the end of this year.
Nobuaki Kobayashi, the trustee for Mt. Gox, has formally extended the deadline for repaying the exchange’s creditors from October 31, 2023, to October 31, 2024.
Kobayashi stated in a letter dated September 21 that he had extended the due dates for the base repayment, the early lump-sum repayment, and the intermediate payback with the Tokyo District Court’s approval.
The Base Repayment, Early Lump-Sum Repayment, and Intermediate Repayment deadlines, previously set for October 31, 2023, have been postponed by one year, with repayments now anticipated to be finished by October 31, 2024.
For rehabilitation creditors who have submitted the relevant information, repayments will also be made in sequence as early as the end of this year, according to Kobayashi. Kobayashi asserted:
“Please note that the schedule is subject to change depending on the circumstances, and the specific timing of repayments to each rehabilitation creditor has not yet been determined,”
The Mt. Gox trustee is prepared to reimburse 141,686 Bitcoin (BTC), 143,000 Bitcoin Cash (BCH), and a sizeable 69 billion yen under the rehabilitation plan. However, this compensation could not have a linear market impact despite its size.
Firstly, not all the reimbursed BTC would be released into the market immediately, even though creditors could accept payments in crypto or fiat until the April deadline. The first “200,000 yen (about $1,520) of each creditor’s claim will be paid in yen,” according to the agreement.
After that, creditors can choose to receive 71% of claims over this amount in cryptocurrency or the remaining 29% in cash, depending on their preference. This spread-out and mixed-format payout reduces the likelihood of a significant, one-time entry of bitcoins into the market.
It’s also crucial to take significant creditors’ judgments into account. Two of the largest debtors, Bitcoinica and the Mt. Gox Investment Funds, account for 20% of all claims.
As highlighted by a Bloomberg report, Mt. Gox Investment Fund has previously stated that it intends to keep its BTC rather than immediately liquidate it. Such actions by significant creditors lessen the market’s immediate selling pressure.
Although market speculation and interest have always focused on Mt. Gox repayments, several factors, such as the staggered repayment process, actions made by important stakeholders, and current market conditions, are likely to lessen the likelihood of a sharp increase in market volatility.
