• Mt. Gox’s top two creditors have chosen an early payment option that would prevent the sell-off of their Bitcoin holding.

  • The 90% recoverable holding of both creditors accounts for 21% of all 141,686 BTC to be reimbursed by the exchange.

  • Other investors who decline this method can wait until the court case is concluded to receive their reimbursement in fiat.

The top two creditors of Mt. Gox, the now-defunct crypto exchange that fell to an 850,000 bitcoin (BTC) hack in 2014, has opted for the early lump sum payment option to prevent the sell-off of their BTC holding.

Why Does the Mt. Gox Refund Matter?

Since 2021 when Mt. Gox announced a rehabilitation plan that would see 141,686 Bitcoin (BTC), 142,846 Bitcoin Cash (BCH), and 69 billion Japanese yen returned to creditors and investors in the crypto exchange. 

The concerns about the refund centered around a potential dump should 141,686 BTC (approximately $3.4 billion at $24,000 per BTC) be thrown back into the market. 

As with most markets, an influx of that amount of Bitcoin would almost certainly force the price of BTC lower.

Mt. Gox Creditors Pick Early Lump Option

Quelling the concerns surrounding the return of Mt. Gox funds, the two largest creditors, Bitcoinica, a now-defunct New Zealand-based crypto exchange, and MtGox Investment Funds (MGIF), have chosen the early lump payment option.

These two creditors are significant because collectively they account for about one-fifth (21%) of all Mt. Gox claims. 

Choosing this option will mean that their claims of 90% of their recoverable holding will be made in mostly bitcoin (BTC). This option will not require a selloff of their Bitcoin holdings for the refund to be made.

Other Available Refund Options 

There is also another option for creditors who decline the early lump sum payout. However, they would need to wait for the conclusion of civil rehabilitation litigation, including a lawsuit by CoinLab against Mt. Gox’s estate. 

This option involves receiving fiat and may yield a slightly higher recovery. However, a legal analysis by a Japanese law firm indicated that holdouts could wait many years for their money to be returned.

Creditors must decide by March 10, 2023, whether to accept the offered early lump sum or continue to wait for a potentially larger payout at an unspecified time in the future.

On the Flipside

  • Despite the relief, analysts have expressed their worries that the expected reimbursement will likely lead to a major sell-off of Bitcoin in the coming months.

Why You Should Care

Choosing this option by the top two creditors of Mt. Gox. reduces the concerns that there could be a potential market impact resulting from a large-scale Bitcoin sell-off when the funds are refunded.

Get info on other repayment options below: Mt. Gox Allows Creditors to Select Repayment Options – Bitstamp to Support Returns

Read about the concerns of the Mt. Gox refund below: Chainalysis: FTX Crisis Comparatively Smaller Than Mt. Gox’s