Mt. Gox error pays creditors two-fold, now they must return excess

abdelaziz Fathi

Some creditors of the defunct cryptocurrency exchange Mt. Gox have reportedly received double payments. While some users have already sent the extra money back, others are hesitant or making conditions for returning it.

Mt. Gox

This incident adds another layer of complexity to the long-standing saga of Mt. Gox, which was once a dominant force in the Bitcoin trading space before its collapse in 2014.

Nearly a decade after the exchange’s downfall, creditors have begun receiving their repayments, primarily in Japanese yen via PayPal. But according to posts on the Mt. Gox creditor subreddit and a dedicated Telegram channel, several users said they received double the amount they were owed.

One Reddit user, u/rlycreativename, shared the contents of an email they claimed to have received from the Mt. Gox Rehabilitation Trustee. The email acknowledged the error, stating that the transfer was “inadvertently made twice” due to a system issue, and requested the return of the second payment.

Other users, like u/lukhaz and u/CaptainValor, also reported similar incidents of receiving double payments or being contacted by the Trustee regarding the error. While some users, like u/PPvotersPostingLs, have complied and returned the additional funds, others were reluctant to do so.

Some view the mistake as understandable, while others, frustrated by the long wait and the difficulty in recovering their funds, indicated they might not return the excess payment without certain conditions being met.

Repayments to creditors are being carried out in various tranches, including the base repayment, the early lump-sum repayment, and the intermediate repayment. However, Nobuaki Kobayashi, the trustee responsible for managing Mt. Gox assets, cautioned that the repayment schedule is still subject to changes depending on the prevailing circumstances, and the exact timing of repayments to individual rehabilitation creditors has not been finalized.

Kobayashi disclosed that Mt. Gox’s liquidators redeemed 7 billion yen ($46.9 million) from trust assets to facilitate these repayments. After this redemption, a balance of 8.8 billion yen remains in the trust assets.

Bitstamp and BitGo were appointed by Mt. Gox trustee as some of the designated crypto exchanges to assist in the repayment procedures to creditors. A creditor can choose his preferred cryptocurrency exchange and register as a user for the receipt of the relevant assets according to the repayment procedures under the rehabilitation plan.

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