Mt. Gox Confirms Starting Repayments In Bitcoin And Bitcoin Cash Amid Market Rout

05.07.2024 / Payment system news

The Mt. Gox bankruptcy estate announced on July 5 that it had officially started repaying creditors in Bitcoin (BTC) and Bitcoin Cash (BCH), marking the end of a decade-long wait.

Trustee Nobuaki Kobayashi indicated that the repayments are made via a part of the designated crypto exchanges based on the rehabilitation plan. Repayments to eligible customers will be “promptly made” if they satisfy certain conditions, including confirmation of the validity of registered accounts, acceptance of the intent to subscribe to the Agency Receipt Agreement by designated crypto exchanges, and completion of discussions with the Rehabilitation Trustee.

Exchanges approved by the trustee of the defunct exchange to process repayments include Bitbank, BitGo, Bistamp, Kraken, and SBI VC trade, a Japanese exchange. Notably, some customers may have to wait up to three months to receive their payouts, depending on which exchanges they made the claims with.

The announcement further exacerbated concerns about declining crypto prices after Mt. Gox announced last month its intention to begin the repayment process in July. Earlier today, a cold storage wallet belonging to Mt. Gox transferred 47,228 BTC, worth roughly $2.7 billion. 

The price of Bitcoin plummeted to $53,898 at one point today, and the alpha crypto is trading for $55,496 at the time of writing, CoinGecko data shows. Crypto commentators are contemplating where prices could be headed next, with some forecasting a relief in bearish conditions only when selling pressure from Mt. Gox and the German government abates.

The Spectacular Rise And Fall Of Mt. Gox

Tokyo-based Mt. Gox was founded in 2010 by programmer Jed McCaleb and was one of the biggest Bitcoin exchanges. In its early days, it facilitated over 70% of global BTC trading volumes. McCaleb sold it to French developer Mark Karpelès in 2011.

Despite its market dominance, the exchange was forced to shut down in 2014 after several hacks. Of the 950,000 Bitcoins lost, roughly 140,000 were recovered after Mt. Gox declared bankruptcy, leaving thousands of creditors worldwide rekt.

Authorities arrested the hackers years later, and the U.S. Department of Justice charged two Russian nationals with conspiring to launder around 647,000 BTC from the collapsed exchange.

Before kicking off payments today, Mt. Gox encountered numerous delays over the years in repaying clients.