When the Mt. Gox cryptocurrency exchange went bust in 2014, users found themselves hundreds of millions of dollars out of pocket. Nearly a decade later, the firm’s creditors were due to get their payday on October 31 finally.
But just as the long-awaited date was within reach, on Thursday, September 21, Mt. Gox trustees announced that they would push back the repayment deadline by a year.
In a document announcing the forestallment, blamed delays in collecting, approving and communicating the necessary information from creditors.
The announcement stated that Mt. Gox would have been unable to meet the original deadline, “given the time required for [creditors] to provide the necessary information, [and to] share information with banks, fund transfer service providers, and Designated Cryptocurrency Exchanges.”
The one-year deadline extension marks just the latest delay to the Mt. Gox repayment schedule.
Over the years, drawn-out legal battles and repeated overhauls of the exchange’s bankruptcy plan have stalled repayments on numerous occasions.
In 2023, it appeared as if the rehabilitation trustees were finally ready to release funds on September 30. However, in March, they postponed repayments by a month in order to give creditors more time to complete their applications.
Despite the eleven-year wait to recover their funds, Mt. Gox creditors have at least one reason to celebrate.
Rather than fully liquidating the defunct exchange’s crypto assets, Mt. Gox’s trustees have only sold a portion of its cryptocurrency stockpile.
As a result, creditors will receive a mixture of Bitcoin, Bitcoin Cash and Japanese Yen.
Some analysts have speculated that the sudden liquidation of approximately $4B worth of cryptocurrency could create sufficient sell pressure to destabilize markets.
For now, the question of whether it will has been kicked down the road for another year.
Given the explosion in the value of cryptocurrency since 2014, Mt. Gox’s strategy of holding, rather than immediately liquidating its crypto assets means creditors will ultimately receive a larger sum.
In contrast, when users of the collapsed exchange Quadriga eventually cash in their claims, the value of their crypto will be decided according to its price when the firm went under in April 2019.