Mt. Gox's Two Largest Creditors Opt for Bitcoin Compensation
According to CoinDesk, the two largest creditors of Mt. Gox, the infamous Bitcoin exchange that was hacked nine years ago, have chosen to receive their compensation in Bitcoin (BTC).
Mt. Gox's Largest Creditors Choose BTC Compensation
The two creditors in question are the New Zealand-based crypto exchange Bitcoinica (which is now defunct) and the MtGox Investment Fund (MGIF), collectively accounting for about 20% of the claims against Mt. Gox. These entities will receive 90% of their claimed assets in Bitcoin, amounting to roughly 21% of the value of their assets at the time of the hack in 2014.
Given that Bitcoin was valued between $300 and $500 at the time of the hack, the repayment to investors has long been seen as a "ticking time bomb" for the cryptocurrency market, with the current value of BTC now being several times higher. It’s likely that the creditors won’t hold onto the BTC received, given that their legal battle with the exchange has spanned nearly a decade.
If these creditors had chosen to be paid in fiat, the bankruptcy trustee would likely have had to sell a significant portion of the recovered BTC to convert it into cash. However, Bitcoinica and MGIF’s choice to receive compensation in BTC does not guarantee they will retain the Bitcoin they receive.
For other creditors who do not wish to accept the early repayment of 90% of their outstanding claims, the only alternative is to wait until the Mt. Gox bankruptcy proceedings conclude.
Theoretically, waiting could result in a slightly higher recovery, but there is no guarantee that it will exceed 90%.
Creditors have until March 10, 2023, to decide whether to accept early compensation or continue waiting for potentially higher payments in the future.
In late August 2022, rumors circulated that Mt. Gox was about to begin repaying recovered funds. However, this was inaccurate, as it was merely the deadline for creditors to transfer their claims to other parties and register to receive their funds.
In January, Mt. Gox agreed to extend the asset repayment schedule by two more months due to unforeseen issues affecting the creditor registration process.
The Mt. Gox trustee currently holds 142,000 BTC, 143,000 BCH, and 69 billion Japanese yen, compared to the 850,000 BTC lost in the 2014 hack.
Following the announcement that Mt. Gox’s two largest creditors had opted to receive their assets in BTC, Bitcoin's price surged to $25,000 on the evening of February 16, 2023, marking its highest level since June 2022.
