Mt Gox to Begin 9 Billion Bitcoin Repayment in July of 2024
After a decade of waiting, Mt. Gox, once the world’s largest bitcoin exchange, is finally preparing to start repaying its creditors. The defunct exchange’s rehabilitation trustee, Nobuaki Kobayashi, announced on Monday that the distribution of bitcoin and bitcoin cash repayments will begin in early July 2024. This marks a significant milestone in one of the most infamous incidents in cryptocurrency history.
Mt. Gox, founded in 2010, was responsible for over 70% of all bitcoin transactions globally before it suffered a major security breach in 2014. This hack led to the loss of 850,000 bitcoin, valued at over $51.9 billion at current prices. The exchange’s collapse sent shockwaves through the nascent crypto industry, causing bitcoin prices to plummet to a local low of $420 in February 2014.
According to the latest announcement, approximately 142,000 bitcoin and 143,000 bitcoin cash will be returned to creditors, along with 69 billion Japanese yen ($432 million) in fiat currency. These assets, worth around $9 billion at current market rates, are owed to about 127,000 creditors who have been patiently waiting for over a decade to recover their funds.
Kobayashi emphasized that due diligence and certain safety steps will be required before the payments go through. The repayments will be made “in the order of the cryptocurrency exchanges with which the Rehabilitation Trustee will complete the exchange and confirmation of the required information,” suggesting a phased approach to the distribution.
This announcement follows a significant on-chain movement of funds in May 2024, when Mt. Gox transferred 141,686 BTC (worth $9.62 billion at the time) to a new wallet. This transfer, the first of its kind in over five years, was later confirmed by Kobayashi to be part of the preparations for creditor repayments.
The imminent distribution of such a large amount of bitcoin has raised concerns about potential market impacts. Traders and analysts suggest that these repayments could add selling pressure to the bitcoin market. Many early investors will be receiving assets at a much higher value than their initial investments before 2013, which may incentivize them to sell at least a portion of their holdings.
Following the release of Mt. Gox’s statement, bitcoin prices experienced a slight dip, dropping from over $62,300 to under $62,100 in the minutes after the announcement.
Despite these concerns, the commencement of repayments represents a long-awaited resolution for Mt. Gox creditors. The rehabilitation process has faced numerous delays and setbacks over the years. Initially scheduled for October 31, 2023, the repayment deadline was extended to October 2024 by a Tokyo court last year.
While the commencement of repayments is undoubtedly positive news for creditors, it’s worth noting that the process may still face challenges. The trustee has asked for continued patience, indicating that the repayments will be made in phases and may take some time to complete.
