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Mt. Gox exchange postpones repayment deadline for a year

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On September 21, Mt. Gox trustee Nobuaki Kobayashi said that the repayment deadline for creditors has been postponed by one year, shifting from October 31, 2023, to October 31, 2024. According to The Block, the repayment amount is about 142,000 Bitcoins, plus 143,000 Bitcoin Cash, and 69 billion Japanese yen. Let's break down what the point of Mt. Gox case is and what this announcement means.
 

Why Mt. Gox is making a repayment

Mt. Gox was an exchange that operated from 2010 to 2014. Back then, it dominated the Bitcoin trading market, accounting for up to 70% of the total trading volume. However, as it turned out, the exchange suffered a severe security breach that spanned several years, resulting in theft of approximately 850,000 Bitcoins from its holdings. At the time of the exchange's complete shutdown on February 25, 2014, each Bitcoin was worth about $420, so in total losses amounted $357 million.

Later, it was revealed that some of the stolen funds (almost 20%) were still under the exchange's control, and it had to return them to the 20,000 affected customers. However, the payments have been postponed over nearly 10 years. According to Dune, Mt.Gox has 137,891 Bitcoins in its possession now.

Read more about this story here.
 

Details of the Mt. Gox letter to creditors

In a letter to creditors, Nobuaki Kobayashi explained that the repayment deadline has been extended with approval from the Tokyo District Court. Nevertheless,the letter hints that some of the exchange's customers may start receiving payments by the end of this year.

Either way, the letter notes that the schedule of repayments may still change: "Please note that the schedule is subject to change depending on the circumstances, and the specific timing of repayments to each rehabilitation creditor has not yet been determined".
 

Possible market impact

The Mt.Gox repayment issue has long been discussed in the crypto market. Since the exchange’s closure, Bitcoin’s price has increased multiple times. After receiving the payouts, some users may surely want to sell their cryptocurrency.

However, a report by UBS, a major Swiss bank, at the beginning of the year suggested that this event is unlikely to have a strong impact on the first cryptocurrency’s rate, especially given the fact that the payments are likely to be gradual rather than a one-time flux of funds into the market.

➡️ Also read: What is BTC and how to buy it

Maria Kachura
Maria Kachura

Visit her on Facebook or hit her up via Email.

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