The biggest creditors of bankrupt cryptocurrency exchange Mt. Gox have chosen a payment option that will allow them to receive a lump sum of their recovery payment in bitcoin rather than fiat.
Creditors, the now-defunct Bitcoinica and the Mt Gox Investment Fund (MGIF), collectively account for about a fifth of the bankruptcy filings.
Gox’s Biggest Creditors Choose Bitcoin Payment
The two entities have elected to receive up to 90% of their claims in BTC in the early payment expected in September 2023, Bloomberg reported Friday, citing people familiar with the matter.
An early payment means creditors don’t have to wait another nine years for Mt. Gox to resolve all of its disputes, although waiting would offer higher payments.
Bitcoinica and MGIF’s decision to receive an early payment in BTC facilitates concerns about a bitcoin selloff in the coming months, as Nobuaki Kobayashi, the bankruptcy trustee, won’t have to liquidate the assets in the open market for repayment.
Over $3.5 billion worth of Bitcoin with Mt. Gox Trustee
Mt. Gox became insolvent nine years ago after a devastating hack that led to the theft of 850,000 BTC, valued at $460 million at the time of the incident. Since its bankruptcy, the company has immersed itself in paperwork, planning how best to compensate creditors.
As of September 2019, the trustee’s holdings contained 141,686 BTC, 143,000 bitcoin cash (BCH), and 69 billion Japanese yen, currently valued at $3.4 billion, $18 million, and $512 million, respectively.
Creditors have until March 10
In July 2022, Kobayashi announcement that creditors could claim up to 90% of the assets in prepayments via BTC, BCH or fiat instead of waiting another five to nine years for the company to conclude its civil rehabilitation litigation.
According to a January report, creditors now have until March 10 to accept an early lump sum payment offer. Those who accept must also register and select a payment option before the deadline.