October 10, 2022

Creditors of the bankrupt Japanese crypto exchange Mt. Gox may have reason to be optimistic about reclaiming a portion of their funds lost in the 2014 hack.

Photo by regularguy.eth on Unsplash

In an announcement on Oct. 6, Mt. Gox’s rehabilitation Trustee Nobuaki Kobayashi revealed details of an online claim filing system that would let users select a repayment method and register payee information related to the claim.

As per the document, users can opt for an early lump-sum repayment, repayment in the form of crypto (based on the dollar value lost at the time), repayment by bank remittance or through a fund transfer service provider. The guidelines also noted that if users do not complete the necessary steps to register their mode of repayment, the funds will be deposited with the Legal Affairs Bureau.

The deadline to register and select a repayment method has been set for Jan. 10, 2023.

The Mt. Gox hack is remembered as one of the largest disasters in the early days of the crypto market. The exchange lost 850,000 Bitcoin which was worth around $460 million at the time.

In October 2021, around 99% of creditors impacted by the exchange’s collapse approved a draft rehabilitation plan to compensate them for a portion of their lost crypto. As per data from Glassnode, the exchange reportedly has 137,890 Bitcoin in hand that it intends to distribute to creditors.  

Some market participants have speculated that when these funds are released, it could trigger a large-scale selloff and further destabilize Bitcoin’s price.

According to on-chain analyst Miles Deutscher, however, it is unlikely that all these coins will hit the market at the same time.

“A pragmatic seller would be wise to DCA out of a position, just as you wouldn’t ape fully into a position,” said Deutscher in a tweet.

“So, although there will be some impact from creditors selling, it is unlikely that it causes the doomsday-esque crash many people are calling for.”