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Mt. Gox bankruptcy saga inches closer to creditor repayment

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After almost a decade since its collapse, the Mt. Gox cryptocurrency exchange seems to be moving closer to a resolution.

According to a report by The Block on November 22, Nobuaki Kobayashi, the Mt. Gox bankruptcy trustee, sent an email to creditors stating that efforts are being made to start cash repayments in 2024.

In its prime in 2013, Mt. Gox handled more than 70% of all Bitcoin trading globally. But in February 2014, the exchange halted processing withdrawal requests and later shut down following the unexplained loss of 850,000 BTC valued at $450 million at the time. The company subsequently filed for bankruptcy protection in Japan.

More than 24,000 former Mt. Gox customers, now creditors, have been waiting years to be repaid.

The recent email marks the first definite timeline communicated for repayment. However, the message cautioned that the exact timing for each creditor remains uncertain.

An accompanying notice revealed that the Mt. Gox bankruptcy trustee has recently converted around $47 million from held assets into cash for funding creditor repayments. But with liabilities likely exceeding $6 billion at current Bitcoin valuations, payouts are expected to continue into 2024 as per Kobayashi’s own admission.

Frustrations have been high among creditors due to the lengthy rehabilitation process. Nonetheless, the concrete progress towards settling outstanding accounts brings hope that Mt. Gox’s issues can ultimately be resolved. However, lengthy legal processes are not much comfort for customers who found their exchange accounts emptied of their hard-earned savings.

The crypto industry has evolved since Mt. Gox, with improved custodial protections, reducing the fear of hacks for clients — although this is still not entirely a thing of the past. Similar to the concept of “if you don’t hold it, you don’t own it” for gold in the past, now the motto is “not your keys, not your coins.”

Featured Image Credit: Photo by worldspectrum; Pexels; Thank you!

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