🔥🔥🔥 Mt. Gox Bitcoin Billions Are Being Repaid—How We Got Here

Mt. Gox's Bitcoin Refunds: A Summary

Background:

Mt. Gox, once the largest Bitcoin exchange, is now repaying creditors more than a decade after its bankruptcy. The return of billions in Bitcoin has raised concerns about potential market impact.

What Was Mt. Gox?

- Origin: Launched in 2010 as a Magic: The Gathering card marketplace, Mt. Gox became a major Bitcoin exchange, handling 70% of Bitcoin trades in 2013.

- CEO: Mark Karpeles reported daily transfers of $5 to $20 million.

How Did Mt. Gox Go Bankrupt?

- Regulatory Issues: In 2013, the U.S. Department of Homeland Security seized $5 million for not registering as a money transmitter.

- Hack: By February 2014, Mt. Gox revealed it lost 850,000 Bitcoin (then worth $475 million, now over $49 billion) due to a hack exploiting "transaction malleability."

- Bankruptcy: The exchange had $64 million in liabilities and $38 million in assets, leading to bankruptcy. Only 1,000 of its 127,000 creditors were Japanese.

Creditor Refunds Explained:

- Legal Action: In 2023, two Russians were charged with laundering 647,000 Bitcoin from the Mt. Gox hack; 140,000 Bitcoin were recovered.

- Refunds: Creditors will receive refunds in Bitcoin and Bitcoin Cash, starting July 5, 2024. The process is ongoing and will take time to complete.

- Current Status: Mt. Gox holds over $8 billion in Bitcoin, with refunds beginning after extensive preparations.

Conclusion:

The return of funds from Mt. Gox is a significant event for creditors but raises concerns about potential market selling pressure. This situation underscores the importance of security and regulatory compliance in cryptocurrency exchanges.

Source - decrypt.co

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