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A Decade After Mt. Gox Collapse, Debtors Begin Receiving Fiat Repayments
- Mt. Gox victims are finally seeing refunds after a decade-long bankruptcy process, with initial fiat repayments coming via PayPal.
- A system error has led to accidental bonus refunds to certain creditors.
- Mt. Gox has delayed repayments multiple times, resulting in frustration among the community.
- UBS has rubbished claims that the release of recovered BTC into the circulating supply may destabilise the market.
It’s nearly been a decade, but after what feels like forever, those affected by the devastating Mt. Gox hack in 2014 are finally receiving their much-anticipated repayments. In what’s been a lengthy legal process, the average retailer has waited patiently in line to start seeing compensation. But according to users on a Reddit dedicated to those impacted by the hack – MtGoxInsolvency – the wait is over.
One user posted: “I just got my initial payment via Paypal!!! I was sure it was a phishing attempt on my email, but nope legit money in JPY”.
The payments are initially being made in fiat currency via the popular payment gateway, with in-kind crypto payments set to be released sometime in late 2024. Most users are not yet being paid the full amount they are owed, but it is a start.
Delicious Irony for Some Creditors
After years of wondering whether they’d ever see their money again, some creditors have accidentally received double payments from the trustee in charge of distributing the compensation.
An official email from the trustee read:
The Rehabiliation Trustee has transferred money to you via PyaPal as the first repayment in the civil rehabilitation proceedings of MtGox Co., Ltd. However, due to a system issue, the transfer of money to you was inadvertently made twice.
MtGox Co., Ltd. Rehabilitation Trustee
The statement goes on to request the creditors pay back the extra amount. Naturally, after a decade of angst, those who have been double-paid are having a bit of fun with it.
Another Reddit user joked that they’d pay back the Rehabilitation Trustee, but only once they were provided with KYC information, bank details, PayPal details, and the board leader (Kobayashi) posing for a picture with a piece of paper signed by him with today’s date.
What Happened to Mt. Gox?
Picture this. It’s 2014, and BTC is finally starting to gain some traction. But just as the coin is becoming a legitimate trading option, the world’s biggest crypto exchange at the time – Mt. Gox – is hacked. A significant amount of Bitcoin’s supply was lost. About 850,000 BTC were stolen and only 20% was recovered over time. Cryptocurrency was flung into a bear market, and a global regulatory response quickly ensued. It was the OG FTX collapse, if you will, except Mt. Gox had an even larger control of BTC supply.
Some in the media believe the pending repayments – once the Trustee starts distributing BTC – may have an impact on Bitcoin’s price due to the release of new coins into circulation.
However, this has been ridiculed by an in-depth report from UBS, which states the repayments will have minimal impact on the crypto market.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
