Nobuaki Kobayashi, Mt. Gox Rehabilitation Trustee, has extended the repayment window for 2024. The news broke after Mt. Gox’s creditors reported the company’s “Notice Concerning Change of Repayment Deadlines.”
A number of creditors face further wait as the repayment deadline shifts to 2024.
According to the original plan, Mt. Gox was expected to reimburse its former customers on October 31, 2023. However, the company has rescheduled the repayment to October 31, 2024.
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Repayment Deadline Postponed Until 2024
The exchange will attempt to pay back customers who provided all the required information within 2023, as noted. However, the repayment period can still be extended to the next year. Other customers may not receive their funds until the end of October 2024.
Mt. Gox trustee holds 42,000 BTC, 143,000 BCH, and 69 billion Japanese yen (equivalent to $510 million). The initial payments will be distributed in a combination of BTC, BCH, and fiat. Creditors can choose to receive repayment in crypto after the first 200,000 yen is distributed. The repayment process will cover 71% of cryptocurrencies and 21$ of fiat.
As reported by CoinDesk, Mt. Gox’s two largest creditors, New Zealand-based crypto exchange Bitcoinica (now defunct) and investment fund MtGox Investment Fund (MGIF), have chosen to receive their money in bitcoin.
These two entities account for one-fifth of Mt. Gox’s claims. They will get 90% of their assets back as part of the plan. The repayment will cover 21% of their asset value stuck on the exchange during the 2014 hack.
Extended Delays Raise Frustration
It’s not the first time Mt. Gox has extended the repayment deadline. The defunct exchange previously changed the repayment deadline from September 30, 2023, to October 31, 2023.
The prolonged repayment process has raised concerns within the crypto community, as Mt. Gox has repeatedly moved deadlines from month to year, leaving creditors in a state of uncertainty.
Some former customers have doubted that they may be unable to get their money back after the long-overdue reimbursements. Mt. Gox filed for bankruptcy in February 2014, when Bitcoin traded at around $500. At the time of writing, the flagship cryptocurrency is trading at around $27,000. The value of Bitcoin the trustee holds has increased by over 3,900%.
As a result of the surge in Bitcoin’s price in 9 years, creditors are expected to receive a larger percentage of their claims than they would have if the price of Bitcoin had remained the same.
However, it is important to note that the repayment process is still ongoing, and it is unclear when creditors will receive their full payments. The trustee has said that he is committed to repaying all creditors in full, but he has also warned that the process may take several years.
Adding to the mounting frustration, many warn of a massive sell-off following the repayment, which possibly has a significant impact on the market. If a large number of creditors choose to sell their Bitcoin at the same time, it could create downward pressure on the price.
The size of the impact would depend on several factors, including the amount of Bitcoin that is sold, the speed at which it is sold, and the overall market conditions.
While the scenario has left creditors anxious, other members believe that Mt. Gox creditors will unlikely sell their Bitcoin immediately. Some creditors may choose to hold their Bitcoin, hoping that the price will continue to rise.
This belief was strengthened by the recent wave of spot Bitcoin ETF filings from Wall Street giants, including 21Shares & ARK, BlackRock, Bitwise, VanEck, Wisdomtree, Invesco, Fidelity, and Valkyrie.
Many people worry about using centralized exchanges, and Mt. Gox is a good example of why people think there are major risks associated with using them. It may be a decade before anyone gets their money out of the exchange.