Mt. Gox Creditors Start Receiving Payments After Years of Waiting

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Creditors of Mt. Gox, the defunct bitcoin exchange that collapsed in 2014, have reported receiving compensation payments via PayPal in Japanese yen, according to posts on Reddit.

Mt. Gox was once the world’s largest bitcoin exchange, handling over 70% of all transactions. However, it abruptly ceased operations in February 2014, after revealing that it had lost about 850,000 bitcoins, worth about $450 million at the time, due to hacking and theft.

Bankrupty and Creditor Claims

The exchange filed for bankruptcy protection in Japan and the US, and entered a long and complex legal process to repay its creditors, who had filed claims for their trapped bitcoins and fiat currencies.

In December 2021, the Tokyo District Court approved a civil rehabilitation plan that would distribute the remaining assets of Mt. Gox, which include about 200,000 bitcoins and 15.5 billion yen ($137 million), to its creditors.

Trustee’s Repayment Plan

According to the plan, creditors can choose between three repayment methods: base repayment, early lump-sum repayment, and intermediate repayment. The base repayment is the default option, which will pay creditors in proportion to their approved claims at the end of the civil rehabilitation proceedings.

The early lump-sum repayment is a voluntary option, which will pay creditors 90% of their approved claims as soon as possible, but with a cap of 200,000 yen ($1,770) per creditor. The intermediate repayment is another voluntary option, which will pay creditors 50% of their approved claims in the first half of 2022, but with a cap of 200 million yen ($1.77 million) per creditor.

Payments in Bitcoin or Fiat

The plan also allows creditors to receive their payments in either bitcoin or fiat currency, depending on their preference. However, the exchange rate for bitcoin will be fixed at the time of the approval of the plan, which was 3,226,900 yen ($28,560) per bitcoin.

Some creditors have opted for the early lump-sum repayment option, and have posted screenshots of their PayPal receipts on Reddit, showing that they have received payments in Japanese yen from Mt. Gox. The payments range from a few hundred to a few thousand yen, depending on the size of their claims.

Saga Coming to an End

One creditor, who goes by the username u/BitBurst, wrote: “I just received my early lump sum payment from MtGox. It’s not much, but it’s something. I’m glad this saga is finally coming to an end.”

Another creditor, u/mtgoxthrowaway, commented:

“I got mine too. It’s a small fraction of what I lost, but better than nothing. I hope the rest of the creditors get their payments soon.”

The payments mark a milestone in the long-awaited resolution of the Mt. Gox case, which has been one of the biggest scandals and setbacks in the history of bitcoin. However, not all creditors are satisfied with the plan, as some have argued that it is unfair and does not reflect the current value of bitcoin, which has surged to over $50,000 per coin.

The Quest for Compensation

Some creditors have also filed lawsuits against Mt. Gox and its former CEO, Mark Karpeles, seeking higher compensation and damages. Karpeles, who is currently living in Japan, was acquitted of embezzlement charges in 2019, but was found guilty of manipulating electronic data and received a suspended sentence.

The civil rehabilitation trustee, Nobuaki Kobayashi, has said that he will continue to work on the distribution of the remaining assets of Mt. Gox, and will announce the progress and schedule of the repayments on the official website of the exchange.

Author: Jinka

Jinka is a self-trained crypto journalist, passionate about happenings in the industry.