Mt. Gox biggest creditors to receive 90% of their payout in Bitcoin
The two largest creditors of infamous defunct crypto exchange Mt. Gox, Bitcoinica and MtGox Investment Funds (MGIF), have chosen to get their bankruptcy recovery funds paid out in bitcoin.
Alongside other claimants, who have been waiting for a payout since Mt. Gox shuttered a decade ago, will receive 90% of what they are owed under a proposal by the trust managing the exchange’s liabilities.
Rather than waiting another 3 to 5 years, the Early Lum-Sum Repayment will enable creditors to recover somewhere between 15%-25% of what they actually held on to the exchange. The liquidity option also allows them to choose which assets would like to be paid back in BTC and/or BCH or cash.
MtGox Investment Funds (MGIF) and Bitcoinica, a New Zealand-based crypto exchange, collectively represent about 20 percent of all Mt. Gox claims, which are estimated at $3.4 billion.
Almost a decade after an attack forced the platform to shut down, Mt. Gox creditors were given the option to choose between bitcoin, cash or Bitcoin Cash to receive repayment. The process could make the frozen crypto assets liquid again, depending on the entitled users’ choices.
Those who chose to receive their repayment in bitcoin are reportedly posing a new selling threat to an already battered market. Even those who opt to get paid in fiat money are risking pressuring the market further as the trustee would supposedly liquidate an equivalent amount of bitcoin to pay out those interested in receiving cash.
However, Eric Wall, a Mt. Gox creditor, dismissed the rumors that all of the roughly 150,000 BTC sent to creditors would soon be offloaded into an already stressed bear market.
Interestingly, crypto exchange Bitstamp was appointed by Mt. Gox trustee as one of the designated crypto exchanges to assist in the repayment procedures to creditors. Bitstamp has released a complete description of how those affected can register to reclaim their digital assets through the exchange.
Bitstamp was approved, along with three other cryptocurrency exchanges, to assist creditors in receiving their assets. A creditor of Mt. Gox can choose their preferred cryptocurrency exchange and register as a user for the receipt of the relevant assets according to the repayment procedures under the rehabilitation plan.