- Bitcoin exchange platform, Mt. Gox could soon distribute 200k BTC among its creditors
- It is yet to be confirmed whether the user’s fund will be paid out in Bitcoins
- The decision depends upon a civil rehabilitation plan of the Japanese Court
- If the funds were distributed as per 2014’s fiat value, then Mt. Gox’s shareholders and executives will suddenly become rich
Bitcoin space has grown tremendously over the recent years. The industry has shown that it has tremendous potential. However, there are also scammers and hackers finding ways for them. Recently, it was announced that Japan seeks to conclude a bankruptcy case. It is known that the case included a massive laundering of more than $6 billion worth of Bitcoins. Hence, it is estimated that as the case comes near to conclusion, the amount will be distributed among the creditors waiting almost a decade for reimbursement. Notably, some of the creditors have claimed a payout of more than hundreds and thousands of Bitcoin.
Mt. Gox cryptocurrency laundering case
Based in Japan, Mt. Gox was once a major BTC exchange offering services to its services globally. At a time, the exchange platform was handling more than 70% of the global BTC transactions. However, after a tremendous performance, the firm filed for bankruptcy after losing a massive loss of more than 8,50,000 BTC coins. Notably, the figure is about 2% of the exact amount.
However, it is found that about 200k Bitcoins have since been recovered and will be returned to the creditors. It is yet to be cleared whether the amount will be returned by the 2014 fiat value or current value. Indeed, the distribution is dependent on whether a civil rehabilitation plan is passed.
Warning for a possible Bitcoin market shock
Since, 2014, we have witnessed that the price of BTC has surged by more than 100 times. Following the price spike, creditors are favoring payouts in Bitcoins. Indeed, the creditors are voting yes for such a rehabilitation plan, which will be filed by the Japanese court with an online deadline of October 8, 2021. Such magnitude of a possible $6 billion worth BTC payouts can lead to a market shock where recipients dump their newly acquired BTC en masse.
According to Konstantin Anissimov, the executive director at CEX.IO, thousands of BTC and BCH billed to enter into the market through Mt. Gox, there remains a fear. As the holders of the exchange platform start to liquidate their positions, the overall impact on price is going to be brutal.
What if the Japanese court’s plan doesn’t pass?
It is expected that after October 20, 2021, there will be an announcement on the timeline for paying creditors, if the civil rehabilitation plan works. However, if the plan fails to pass, then soon the senior executives and shareholders of Mt. Gox will become rich. Moreover, an alternative to the rehabilitation plan is to settle each creditors’ claims using the price of BTC at the time of bankruptcy. Moreover, it is also noteworthy, that, when the hack was observed, the price of 1 BTC was about $450 only.