Mt. Gox, the cryptocurrency exchange that lost 850,000 Bitcoin in investor funds in 2014, is set to begin repaying its defunct users.
Starting July 2024, Mt. Gox’s rehabilitation trustee will initiate repayments in Bitcoin (BTC) and Bitcoin Cash (BCH), as announced in a note issued by the exchange on June 24.
“The Rehabilitation Trustee will begin processing repayments in Bitcoin and Bitcoin Cash to the cryptocurrency exchanges where the necessary exchange and confirmation of information have been completed.”
The trustee emphasized the need for patience from users, noting that the sequence of payments will depend on each cryptocurrency exchange’s readiness:
“We will commence repayments in the order of completion of exchange and confirmation of required information by the cryptocurrency exchanges. Please await further updates.”
Creditors of Mt. Gox, totaling approximately 127,000, are owed over $9.4 billion worth of Bitcoin, having awaited recovery since the exchange’s collapse due to multiple unnoticed hacks in 2014.
Mt. Gox’s $9.6 billion Bitcoin transfer in May marked a significant step in its repayment process.
The long-awaited repayment plans by Mt. Gox have been closely monitored in the industry, with users anticipating reimbursement for their lost BTC over the span of more than a decade.
On May 28, Mt. Gox executed its first on-chain movement of funds from the collapsed exchange in over five years, transferring 141,686 BTC valued at $9.62 billion to a new wallet named “1Jbez.” This significant transaction consolidates funds previously held in several other cold wallets associated with Mt. Gox.
Shortly after the reports surfaced, Mt. Gox rehabilitation trustee Nobuaki Kobayashi confirmed that the consolidation is part of the exchange’s strategy to begin repaying creditors. However, he did not specify the timeline for when these repayments will commence. In a May 28 announcement, Kobayashi stated:
“The Rehabilitation trustee is preparing to make repayments for the portion of cryptocurrency rehabilitation claims allocated to cryptocurrency… As the Rehabilitation trustee continues to prepare for these repayments, we ask for your patience until they are executed.”
In 2014, Mt. Gox, once a dominant force in cryptocurrency exchanges handling over 70% of trades, collapsed following a devastating security breach. This breach led to the loss of more than 850,000 BTC, valued then at over $51.9 billion. At that time, Bitcoin’s price plummeted to a low of $420, sharply contrasting with today’s price above $61,100.
Mt. Gox endured multiple hacking incidents from 2011 to 2014, culminating in its closure. Despite efforts by Mt. Gox’s rehabilitation trustee to initiate repayments by a set deadline in September 2023, delays are likely given the ongoing complexities. Initially, repayments were expected by October 31, 2023.
