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The deadline for entering repayment information for the now-defunct cryptocurrency exchange Mt. Gox has finally passed, thereby opening the window for repayments to its creditors. The Tokyo-based crypto firm filed for bankruptcy nearly a decade ago in February of 2014, making it one of the first crypto exchanges to go bust.
Mt. Gox To Start Repayment
Over 10,000 crypto creditors from all over the world have been required — over the course of the last six months — to choose whether they want to be paid in cryptocurrency or in fiat, as well as to which cryptocurrency exchange, address, bank account, or even their PayPal account. However, with the deadline of April 6 now over, the repayments will now be paid out till Oct. 31 (Japan Time), according to the Mt Gox Trustee.
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In an April 7 letter, the Trustee stated that he would coordinate with a number of financial institutions, that includes the likes of crypto exchanges and digital asset custodians in order to prepare for the repayments. The procedure will include transferring the payments to such platforms, which will then be disseminated to the appropriate creditors.
Citing the complexity & involvement of multiple entities in the overall process, the Trustee was quoted as saying:
In light of this, it is expected to take some time before the repayment is commenced. Please also note that, in consideration of various circumstances, the above deadline might be extended with the permission of the Tokyo District Court.
Bitcoin Price In Trouble?
Despite the fact that the exchange reported losing 850,000 Bitcoins in 2014, the firm has recovered around 142,000 BTC, 143,000 in Bitcoin Cash (BCH) and 69 billion Japanese Yen ($510 million), which accounts for around 20% of the total attack. Payments will be done using a combination of fiat currency and cryptocurrencies, specifically Bitcoin and Bitcoin Cash. The initial 200,000 yen ($1520) of each creditor’s claim will be settled in Yen. However, if the claim exceeds the initial amount and the creditor has opted to be paid in both crypto and cash, the user will receive a payout in 71% crypto and 29% cash.
This has led many to believe that the pressure on Bitcoin would be adverted as customers choose alternative modes of payment such as fiat or BCH over BTC. Nonetheless, the repayment process might result in a marginal increase in the supply of new Bitcoin which could inadvertently affect the price of the flagship digital asset. While it’s reasonable to anticipate some volatility in Bitcoin’s price, the likelihood of something truly catastrophic is much less.
As things stand, the price of Bitcoin is currently exchanging hands at $27,926, which represents a gain of 0.26% over the past 24 hours in contrast to an increase of 0.24% recorded over the last seven days.
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