Mt. Gox Payouts: Date, Details of Creditor Payments by Bankrupt Exchange

• A Mt. Gox cold wallet has transferred nearly 142,000 BTC worth around $9.4 billion.
• The bankrupt exchange could start making crypto payouts imminently.
• Some of the platform’s biggest creditors will be among the recipients.

A cold wallet associated with the Mt. Gox crypto exchange has transferred Bitcoin for the first time in five years.

After the first cash repayments were distributed last year, the movement of nearly 142,000 BTC worth around $9.4 billion indicates that crypto payments could be made shortly. But the decade-long saga isn’t over just yet and it could still be years before the final repayments are made.

Mt. Gox $9.4 Billion Bitcoin Transfer Shakes Crypto Markets

More than a decade after Mt. Gox collapsed, the exchange’s cold wallets have become some of the largest sleeping whales out there. And the latest movement of Bitcoin was enough to unsettle the entire market.

After the transfers were registered, the price of Bitcoin traced back by more than 1% before stabilizing at around $68,000.

The good news for crypto markets is that Mt. Gox won’t be selling the Bitcoin it has recently transferred. That’s because most creditors have opted to receive their disbursement in BTC rather than cash.

Who Are The Biggest Creditors?

While some creditors have opted to contest Mt. Gox’s repayment plan, the two largest accepted the repayment plan offered last year, which will see the exchange dish out 90% of its assets.

The defunct New Zealand-based cryptocurrency exchange Bitcoinica and Mt. Gox Investment Funds (MGIF) both chose to receive their payouts in Bitcoin rather than cash.

Meanwhile, CoinLab has a  $16 billion lawsuit against the exchange still outstanding. While the figure exceeds all assets held by Mt. Gox’s bankruptcy trustee, it represents what CoinLab argues its equity in the firm would have been worth if it had been managed better.

Latest Details of Creditor Payments

A decade after the exchange’s bankruptcy, the first repayments were made in Japanese Yen last year. However, creditors who chose to receive crypto are still waiting.

Some users reported receiving updates on the status of their Bitcoin and Bitcoin Cash repayments in April.

Now that the exchange has started to move its massive hoard of Bitcoin, crypto payments could be imminent.

Repayment Timeline

After previous efforts to repay Mt. Gox creditors were derailed, the current rehabilitation plan was approved in November 2021.

Creditors were given the choice to receive an “early lump sum” payment equivalent to around 21% of their crypto held on the platform. Alternatively, they could opt to wait until after the conclusion of various lawsuits for a chance to receive a higher amount. 

Although waiting could result in a greater payout, there is no guarantee it will do so. Ongoing litigation could also hold up final payments for years.

Initially, early lump sum repayments were scheduled to occur by October 2023. However, that deadline was pushed back at the last minute, giving the exchange an extra year to distribute assets. The final deadline is now October 31, 2024.

Users who received cash repayments reported receiving money in their bank accounts one to two months after their claims accounts were updated. If a similar timeline plays out for crypto payouts, creditors could receive their funds within a month.

What Happened with Mt. Gox?

At the time of its collapse, Mt. Gox was the largest Bitcoin exchange in the world, handling over 70% of all Bitcoin transactions at its peak.

The story of its downfall begins with a series of security breaches. While the exact details remain murky, evidence suggests hackers exploited vulnerabilities in Mt. Gox’s system to siphon off Bitcoins over several years.

[mtgox.com] Notice regarding Cryptocurrency held by the Rehabilitation Trustee
byu/jangrewe inmtgoxinsolvency

The true scale of the disaster became evident in February 2014 when Mt. Gox halted withdrawals , citing technical problems. Shortly after, they revealed a staggering loss – nearly 850,000 Bitcoins, amounting to around 7% of the cryptocurrency’s total circulation at the time. 

The Tokyo-based exchange then filed for bankruptcy in Japan and the US.

Since then, disagreements among creditors and a string of lawsuits have slowed efforts to repay customers, with multiple plans attempted before finally settling on the current model