The Japanese Bitcoin exchange platform Mt. Gox has prolonged the deadline for repaying the creditors to next year. A letter penned by Nobuaki Kobayashi, the head of trustee, illustrated that the repayment period has been moved to October 31, 2024.
The trustee stated that a proposal to extend the repayment deadline was presented before the Tokyo District Court. Under this rehabilitation plan, the Mt. Gox team pledges to refund the hack victims at a considerable compensation rate of 90%.
Mt. Gox Extends Deadline to 2024
In 2014, Mt.Gox was renamed the granddaddy of hacks after attackers compromised the exchange and drained 850000 Bitcoin worth $350 million. A few weeks after the hack, the exchange was declared insolvent and filed for bankruptcy protection.
Following the closure of Mt. Gox operation, approximately 24000 customers were affected by the hack. The affected customers engage in lengthy battles to be compensated for their losses.
After an uphill struggle to restore operation and refund the customers, legislators at the Tokyo district court and the creditors pursued ways to repay the hack victims. In response to the court decision, the exchange formulated a rehabilitation plan outlining the procedure to reimburse the creditor.
The rehabilitation plan was approved by the district court of Tokyo, instructing the exchange to refund creditors approximately $9 billion. Reportedly, the court ordered the Mt. Gox team to make the refund before October 2023.
Overview of Mt.Gox Rehabilitation Plan
Afterward, the troubled exchange requested the court for a repayment deadline extension. In a September 21 letter, the exchange stated that the new timelines would apply to the customers expecting base payment, intermediate repayment, and early lump sum repayment.
Subsequently, the deadline extension will allow the affected customers to submit required documents for compensation purposes. The creditors must provide critical information, including bank details and other personal information.
Guided by the rehabilitation plan, the trustee will liaise with banks’ and crypto exchanges in repaying the creditors. The trustee projects that the creditor would have provided the required information between now and January next year.
The trustee added that the Mt Gox team anticipates to begin repaying the creditors in Q4 of 2023. However, Kobayashi regretted that there might be changes in the rehabilitation plans due to the unprecedented crypto market.
Mt. Gox to Compensate Creditors
The trustee added that the exchange plans to announce the official timelines for the expected repayment. Commenting on Kobayashi’s announcement, the community expressed their disappointment.
They blamed the Mt. Gox team for postponing the repayment deadline twice this year. A scrutiny of the exchange’s financial capabilities demonstrated that Mt.Gox owns substantial assets that could support the repayment plans.
The exchange currently holds 138000 Bitcoin, equating to around $3.7 billion. Also, it owns Bitcoin Cash (BCH), amounting to approximately $29 million. Analyzing the financial report of the defunct exchange, some market critics argued that the compensation of 150000 BTC could create a “black swan” event that could negatively affect the Bitcoin ecosystem.
Editorial credit: 360b / Shutterstock.com
