Mt.Gox, the infamous cryptocurrency exchange that collapsed in 2014, is set to begin repaying its customers $9 billion. The funds will be paid in Bitcoin (BTC) and Bitcoin Cash (BCH) starting this July. This significant development comes after years of legal and financial entanglements following the exchange’s downfall. Its implosion left many investors in financial limbo.
There Is Hope for Mt.Gox Creditors
According to an announcement by Rehabilitation Trustee Nobuaki Kobayashi, comprehensive preparations have been made to ensure the repayment process is safe and reliable. Notably, the process is designed to comply with all necessary regulations, providing security and finality for the affected parties.
The repayments commencement marks a significant milestone in the long-running Mt.Gox saga. It provides a glimmer of hope for creditors awaiting compensation for their losses. As the process unfolds, the cryptocurrency community watches closely to see how effectively the plan is executed and whether it can set a precedent for handling similar cases.
$9.8B BTC Moved Out of Mt.Gox
Recall that in May, $9.8 billion worth of Bitcoin was consolidated into a single wallet from multiple wallets linked to the defunct Japanese Bitcoin exchange. Mark Karpeles, the former CEO of Mt.Gox has addressed the situation. He stated that the consolidation of Bitcoin is part of the preparation for the upcoming distribution to creditors.
Karpeles reassured that this movement is a step towards fulfilling the repayment obligations. He also noted that there is no cause for alarm. Likewise, the Mt.Gox Trustee released a statement confirming that the preparation of the repayment of the Bitcoin to creditors is indeed underway. Depending on the creditor’s choice, the trustee confirmed that the Bitcoin and Bitcoin cash will be distributed as cryptocurrency or sold for fiat money.
Mt.Gox was Once the Largest Bitcoin Exchange
Before its collapse, Mt.Gox was the largest Bitcoin exchange, processing about 70% of the world’s transactions. In 2014, the company halted trading, shut down its website and exchange operations, and filed for bankruptcy protection against its creditors after failing to recover from its hack’s impact.
Recall that the trustee reached out to the U.S. Department of Justice, seeking information on Alexander Vinnik. Prosecutors had alleged that Vinnik was involved in the laundering of stolen funds from the defunct exchange. The exchange transitioned from bankruptcy proceedings to civil rehabilitation, a debtor-friendly form of corporate restructuring, in 2018. This means that its creditors will receive BTC instead of a fiat sum.
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