Saha Swatilakha
In a long-anticipated development, the trustee of the defunct cryptocurrency exchange Mt. Gox announced today that repayments to creditors will finally commence in early July 2024. This move comes nearly a decade after the Tokyo-based exchange’s abrupt collapse in early 2014, following a massive hack that resulted in the loss of approximately 850,000 BTC.
Nobuaki Kobayashi, the Rehabilitation Trustee, confirmed in the notice that the repayments will be made in Bitcoin and Bitcoin Cash (BCH). “We have taken time to ensure safe and reliable repayment to creditors, including technical remedies for safe repayments, compliance with financial regulations in each country, and discussion of repayment arrangements with the cryptocurrency exchanges,” Kobayashi stated.
Mt. Gox, a former leading exchange for Bitcoin, controlled a majority share of over 70% of transactions at one point. However, its success was short-lived. In early 2014, the platform halted trading, shut down its website, and filed for bankruptcy protection, revealing the loss of a significant portion of its Bitcoin holdings, which were stolen over several years from its hot wallets.
The impending repayments will distribute 142,000 BTC, 143,000 BCH, and ¥69 billion (approximately $432 million) to creditors. This process has been fraught with delays, with deadlines continually pushed back since the first repayment plans were proposed in 2017. The Tokyo court finally set a deadline of October 2024 for the repayment plan last year.
The repayments are expected to have a significant impact on the cryptocurrency market. The release of such a substantial amount of Bitcoin and Bitcoin Cash could add selling pressure, as many early investors might look to cash in their assets at the current high market values. Bitcoin fell by around 5% in the week through to Sunday, with Bitcoin dropping below $61,000 at the time of writing.
According to Yuga Cohler, senior engineering manager at Coinbase, on X, though Bloomberg Newsletter says the crypto sell-off is due to interest rates and the Bitcoin ETFs, media “doesn’t mention the most obvious cause: that Mt. Gox will begin in-kind repayments to creditors in July.”
The Shib Daily has reached out to Yuga for more insights and is awaiting a response.
As reported earlier, over 140,000 BTC, valued at around $9 billion, was moved from Mt. Gox’s cold wallets to an unknown address in May, the first on-chain wallet movements in five years. This event has been closely watched by the crypto community, speculating on the impact of these movements on market stability.
The trustee has assured that all necessary precautions have been taken to ensure the safety and compliance of the repayment process. “The repayments will be made from the beginning of July 2024,” Kobayashi reiterated, highlighting that due diligence and certain safety steps will be required before the payments go through. The repayments will be processed in the order of the cryptocurrency exchanges that have completed the required exchange and confirmation of information with the Rehabilitation Trustee.
While skepticism remains among some creditors and crypto enthusiasts, given the numerous postponements in the past, the announcement marks a significant step toward resolution for those affected by one of the biggest hacks in cryptocurrency history. The long-awaited repayments are not just a financial settlement but a crucial chapter in the restoration of faith in the cryptocurrency ecosystem.
