Mt. Gox creditors report successful receipt of payments, marking a noteworthy development in the long-awaited resolution for the Mt. Gox community. The updates are spreading across various social media platforms. Reddit accounts suggest that Mt. Gox is remitting fiat currency [Japanese yen] to people who suffered losses of Bitcoin in the 2014 incident.
Payments have been noted by way of PayPal transactions as well as bank transfers. The development marks a significant growth in one of the largest cryptocurrency exchange collapses, where about 950,000 Bitcoins valued at $450 million vanished in 2014, leaving creditors hanging for years.
A decade-long wait
On December 25, users on the mtgoxinsolvency Reddit page posted about receiving Japanese Yen-denominated refunds via PayPal. In a screenshot, User Free-end254 displayed an email from PayPal stating that funds had been credited to his account. Another user, who initially doubted the authenticity of the payment, later discovered it was genuine upon checking his PayPal account.
This comes after Mt. Gox trustee Nobuaki Kobayashi announced late last month that he plans to start repayments in cash in 2023, with expectations of ongoing payments into 2024. While he has not officially confirmed it, user reports indicate a significant step forward in compensating affected creditors. This suggests a positive development in addressing the issues surrounding the compensation process.
Mt. Gox: Losses & Legal Battles
The biggest disaster of this kind hit Mt. Gox, the former largest Bitcoin exchange. It lost about 950,000 Bitcoins, approximating $450 million in February 2014. The claim that another 100,000 Bitcoins were misspent only helped to aggravate the crisis. The reasons behind the theft were unclear due to poor security measures and the possible involvement of insiders.
The incident left creditors who had deposited their Bitcoins hoping for easy withdrawal deeply dented with the loss. In addition, the exchange cessation has locked away their funds for nearly a decade. Creditors resorted to legal actions against Mt. Gox and its former CEO, Mark Karpeles, to recover their losses.
Mt. Gox repayment process
In late November, The creditors received an email from trustee Nobuaki Kobayashi outlining the plan to initiate repayments. Asset sales and Bitcoin will contribute to the distribution process by providing recovered funds. The repayment timeline extends into 2024 due to varying processing times. This marks a significant stride towards closing the chapter on a complex and protracted legal battle.
The extended payback period may impact the Bitcoin market as the creditors, finally accessing their assets, might give them out in sale or trade. The court has approved an extension until October 31, 2024. This means that the creditors of Mt. Gox will finally be able to start recovering some of what they lost.
Related Reading | Ethereum ETFs Delayed, Bitcoin Sees Approval Hope