According to a statement issued by the trustee in Mt. Gox’s bankruptcy case, criminal bankruptcy proceedings have temporarily been paused and civil rehabilitation will commence. Customers will eventually be repaid some of the bitcoins they lost, and bitcoins that are still being held by Mt. Gox won’t be liquidated any further.
The collapse of Mt. Gox in 2014 is perhaps the most infamous cryptocurrency exchange hacking incident in history, since it was the first major Bitcoin exchange to collapse and involved the disappearance of 850,000 bitcoins worth USD 473 million at the time. In the present day, this amount of bitcoins is worth over USD 5 billion. 200,000 bitcoins were later ‘found’ in an early Mt. Gox wallet that was used before 2011, providing some funds for compensating customers. These funds have been controlled by a trustee appointed by the court, and none of it has been given to customers yet.
Mt. Gox’ customers have until 22 October 2018 to submit their claims; the old claims submitted during bankruptcy court are not valid for the civil rehabilitation process. Repayments won’t begin until after February 2019 when the proposed rehabilitation plan is submitted, and there is no set date for repayments as of yet. The Mt. Gox nightmare has been dragging on for over 4 years now, most customers probably have accepted that their bitcoins are gone. There might be some good news after all though; since this is a civil rehabilitation the remaining 137,891 bitcoins held by the trustee will eventually be refunded to customers instead of being converted to cash. These bitcoins are worth USD 848 million currently.
The news that bitcoins won’t be liquidated any further is also positive news for the Bitcoin market. The trustee Nobuaki Kobayashi sold USD 400 million of Bitcoin and Bitcoin Cash from December 2017 through February 2018, giving him the title ‘Mt. Gox Bitcoin Whale’. Some blame him for the end of the Bitcoin rally and the beginning of a steep decline, but he is adamant that his selling did not affect cryptocurrency market prices. Even though mathematically his dumping of bitcoins shouldn’t have impacted market prices much, the speculation caused by the selling possibly had an impact since people are monitoring Mt. Gox’ balance.
At the current value of Bitcoin, there is roughly USD 1.25 billion available for repayments, which is more than double the USD value of the 850,000 bitcoins Mt. Gox announced were missing in 2014. This is enough money to repay all customers and creditors in terms of USD with interest. Of course in terms of bitcoin repayments will be far short. Regardless, the final outcome of the Mt. Gox bankruptcy looks to be far better than expected thanks to the massive rise in Bitcoin’s price.
Follow BitcoinNews.com on Twitter at @BitcoinNewsCom
Telegram Alerts from BitcoinNews.com at https://t.me/bconews
Image Source: Pixabay