Two of the most important creditors of the now-defunct Japanese cryptocurrency exchange Mt. Gox have chosen to be repaid primarily in Bitcoin (BTC). The now-defunct New Zealand-registered cryptocurrency exchange Bitcoinica and the MtGox Investment Funds (MGIF) have reportedly agreed on a cryptocurrency settlement.
The two individuals are responsible for one-fifth of all claims against Mt. Gox and will be paid 90 percent of the cash due to them as receivables. Calculating about 21% of the total amount that Bitcoinica and MGIF had locked on Mt. Gox before the attack will determine the amount that will be refunded.
The main creditors of Mt. Gox, a great development in the cryptocurrency sector, have settled upon a Bitcoin payout. This is because a payment made in fiat currency might have put downward pressure on the price of the most popular coin and caused a selloff.
Mt. Gox's Most Notable Creditors Demand Payment in Bitcoin
The current plan calls for Bitcoinica and MGIF to issue payouts in September, which is very soon compared to the other options. Waiting until all Mt. Gox litigations are resolved felt like a less desirable option.
Therefore the decision (1) was made to take the early lump sum payout in September instead. It may take another five to nine years before all of the Mt. Gox lawsuits are resolved, even though this could result in bigger payments.
Bitcoin owners had previously been concerned that a series of simultaneous liquidations sparked by the Mt. Gox bankruptcy recovery may bring the price of Bitcoin down.
This is because the trustee of the bankrupt exchange's estate would have liquidated a significant percentage of the Bitcoin assets to satisfy requests for fiat currency. However, because the creditors have decided to accept cryptocurrency payments rather than fiat currency, the people who have BTC can now relax.
Mt. Gox's creditors have till March 10th to alter their minds about receiving payment in Bitcoin, even though the company has decided to make a Bitcoin repayment.
In addition to cash and Bitcoin Cash coins, the trustee overseeing Mt. Gox's bankruptcy possessed 141,686 Bitcoin as of September 2019, according to recent data. The value of this Bitcoin hoard is estimated to be around $3.4 billion.
One of the First Crypto Hacks
Launched in 2010, the Tokyo-based cryptocurrency exchange Mt. Gox was compromised by hackers, which led to the exchange's final demise in 2014. The hackers were able to steal 850,000 Bitcoin, which had a value of approximately $460 million at the time of the attack.
After the cyberattack, Mt. Gox still possessed around 142,000 Bitcoin Core (BTC), 143,000 Bitcoin Cash (BCH), and 69 billion Japanese yen.
The cryptocurrency exchange was responsible for more than 70 percent of all Bitcoin transactions that took place throughout the globe at the time of its collapse.
As a direct result of the cyber attack, Mt. Gox ceased all trading activities, shut down its website and exchange business, and applied for protection under bankruptcy laws. The Japanese exchange initiated the liquidation process in April 2014 to satisfy its significant number of unsecured creditors.
Creditors of Mt. Gox have continued fighting for their lost assets since the company filed for bankruptcy in 2014, despite the protracted nature of the procedures.
In December 2018, it was reported that the former CEO of the exchange, Mark Karpeles, could be sentenced to jail time. Karpeles has insisted that he is innocent and remains steadfast in this stance.
In 2019, a court in Tokyo's District found him guilty of fewer serious crimes, including falsifying data and placed him on probation with a suspended sentence.
However, the troubled former CEO of Mt. Gox was not found guilty of additional accusations brought against him by the court, and these charges included theft and severe breach of trust.