The deadline for Mt. Gox creditors to file claims has been pushed back yet again, extending the wait for compensation after a devastating exchange hack in 2014. The official announcement cited progress by rehabilitation creditors in respect of selection and registration as one reason for the delay. Creditors now have an additional month, until April 6, 2023, to file claims, while the distribution of assets to creditors will start on October 31, 2023, instead of the original deadline of September 30, 2023.
Mt. Gox was a Tokyo-based cryptocurrency exchange that once accounted for more than 70% of Bitcoin transactions. In 2014, it suffered a catastrophic hack in which thousands of Bitcoins were stolen, leading to the bankruptcy of the exchange. The creditors have been waiting to be paid since then, and the Mt. Gox creditor payout has been in focus for quite some time now, especially considering the value of BTC has increased multifold since the exchange went bust.
The creditors faced a critical decision earlier this year when the largest creditor of the defunct crypto exchange – MT. Gox Investment Fund – opted for an early payout in bitcoin rather than wait longer for an even larger payment after a legal battle. The early payout meant creditors would receive approximately 90% of what was due. The bankruptcy trustee doesn’t have to sell tokens to acquire fiat funds for payment since the creditor also chose to be paid in bitcoin.
The extension in deadlines means the remaining creditors will have another month to decide whether to take the lower amount now or wait another nine years to get the full amount. They have the option of a lump-sum payment, bank remittance, fund transfer service provider, or going through a cryptocurrency exchange or custodian.
The impact of Mt. Gox creditors on the market has been a topic of speculation. However, a Bloomberg report has noted that the largest Mt. Gox creditors have no plans to sell their BTC holdings. They may be hoping for higher payouts at a later date or do not want to sell and gamble on the Coin’s future value.
The delay in compensation has been frustrating for Mt. Gox creditors, but some progress has been made in legal proceedings. In June 2018, the Tokyo District Court recognized that Bitcoin is property, which would facilitate claims for repayment. In March 2019, the court appointed a rehabilitation trustee to facilitate the claims process and to oversee the liquidation of Mt. Gox’s remaining assets.
While the rehabilitation trustee has attempted to compensate creditors, the distribution has been an arduous process. The Japanese legal system does not have the same speed as other countries, which has caused some problems in the process. This has contributed to the delay in compensation, causing creditors who lost their life savings to wait longer for their chance to get some of their money back.
Despite the delay in compensation, some have remained optimistic about the future of crypto exchange. They argue that the creation of futures contracts for bitcoin by large exchanges such as CME has helped stabilize the market, and institutional investment by companies like Tesla and MicroStrategy signifies that the Bitcoin’s future value remains high. These developments may provide creditors with some hope that they might see any outstanding amounts straightened out.
In conclusion, the delay in the deadline for Mt. Gox creditors to file a claim may cause additional frustration. However, progress has been made, and some creditors received partial payouts. The biggest creditors do not intend to sell their holdings, which could avoid market volatility. The MT. Gox’s case highlights the need for strengthened security measures in the cryptocurrency world and a fair process to compensate those who lost their money in such an event.