Mt. Gox disburses $9 billion worth of Bitcoin claims to creditors

During its highest point, Mt. Gox was responsible for more than 70% of all Bitcoin transactions. The Tokyo-based cryptocurrency exchange was established in 2010 and operated until 2014.

Due to its prominent position in the crypto industry, Mt. Gox was a prime target for hackers and experienced multiple security breaches throughout its existence. In 2011, hackers used stolen credentials to transfer Bitcoin.

The next year, network protocol problems resulted in the disappearance of thousands of Bitcoins. Ultimately, Mt. Gox declared bankruptcy in 2014. The exchange faced lawsuits and speculation for several years.

After its downfall in 2014, the debtors have been anticipating the repayment of their lost funds. Recent reports reveal that Mt.Gox has officially initiated the procedure of reimbursing creditors for their US$9 billion worth of Bitcoin.

Debt repayed?

On Monday, April 22, multiple creditors of Mt.Gox shared that they have started to receive updates regarding their claims. Creditors of Mt. Gox have also been provided with progress updates regarding the return of their BTCs and the timeline for the return.

Brian Dixon, CEO of Off the Chain Capital, confirms that the creditors have been informed of the repayment status of Mt. Gox, which is a promising development and a significant step in the recovery journey. This level of communication and transparency in sharing these updates is unprecedented.

According to observations, Brian Dixon has not revealed the repayment date despite having received it. The CEO of 'Blockstream' has been notified about the tokens meant for return, but is still awaiting confirmation of the exact repayment dates. This indicates the presence of uncertainty and a lack of trust surrounding the repayment process.

According to some, a considerable sum of assets remains within the now-collapsed platform, specifically, it is estimated that Mt. Gox still possesses approximately US137,892 worth of Bitcoins, which has a value of $9.2 billion.

This asset will be distributed to creditors as part of the rehabilitation procedure. Previous records indicate that Mt. Gox also held Bitcoin Cash and fiat currency, with a portion of the latter already returned.

In an announcement by Mt. Gox, creditors will now be able to receive base intermediary and lumpsum payments, with an expected timeline to receive them by the end of this year. This is a significant development as it marks progress in compensating those affected by the 2014 breach.

Since then, these individuals have been patiently waiting for their losses to be recovered. The trustee's statement provides a clear timeline for when they will receive at least partial reimbursement, which is positive news in a situation filled with uncertainty and prolonged legal proceedings.

The distribution of Bitcoin by Mt. Gox raises a new issue - the potential selling pressure on the Bitcoin (BTC) market. As the creditors of Mt. Gox are expected to sell their Bitcoin as part of their claim, this could result in an increase in the available supply of Bitcoin for sale.

If the supply exceeds the demand, it could lead to a decrease in the price of Bitcoin.

For now, Mt. Gox creditors can take comfort in the fact that they are one step closer to finally seeing their lost funds returned. The repayment process is a significant milestone in the ongoing story of Mt. Gox and the crypto industry as a whole.

It remains to be seen what impact this development will have on the wider crypto market, but one thing is certain - it is an exciting time for crypto investors.

As the repayment process unfolds, we can only hope that it brings closure and a sense of resolution for Mt. Gox creditors and contributes to the continued growth and stability of the crypto market.