Since its bankruptcy filing in 2014, creditors of the now-defunct Bitcoin exchange Mt. Gox have been waiting for repayments after losing over 850,000 Bitcoin (BTC) due to significant security breaches. Initially, the repayment deadline was set for October 31, 2025, but it has now been extended to October 31, 2026.
Mt. Gox Trustee Updates
Nobuaki Kobayashi, the rehabilitation trustee, provided an update indicating that, with a few exceptions, the Base Repayment, Early Lump-Sum Repayment, and Intermediate Repayment processes for rehabilitation creditors have largely been completed.
These repayments have been made to those creditors who have fulfilled the necessary procedures and encountered no issues during the repayment process.
However, many creditors have yet to receive their payments due to “incomplete procedures or various complications” – not disclosed in the statement –that arose during the repayment process.
To facilitate these repayments, the Mt. Gox rehabilitation trustee has, with court approval, shifted the repayment deadline to October 31, 2026.
The Rise And Fall
At its peak, Mt. Gox was the world’s largest Bitcoin exchange, responsible for handling 70% to 80% of Bitcoin trading volume. Its prominence in the cryptocurrency industry, however, made it a target for hackers, resulting in repeated security issues.
In 2011, hackers exploited stolen credentials to transfer Bitcoin, and network protocol deficiencies led to the loss of several thousand Bitcoin that same year.
By early 2014, customer frustrations grew as they faced difficulties withdrawing funds. Technical bugs created uncertainty about transaction details, particularly regarding whether Bitcoin had been successfully transferred to customers’ wallets.
This problem was attributed to a bug in the Bitcoin software that allowed users to alter transaction IDs, known as “transaction malleability.” While this claim has been disputed within the community, an agreement was reached in late 2021 to address these issues.
Creditors Face Delays And Uncertainty
The situation escalated in February 2014 when Mt. Gox suspended withdrawals after discovering suspicious activity in its digital wallets, ultimately revealing that it had “lost” hundreds of thousands of Bitcoin. Estimates of the total lost ranged from 650,000 to 850,000.
Between October 2019 and October 2020, trustee Nobuaki Kobayashi extended the deadline for submitting claims five times. In November 2021, Kobayashi announced a rehabilitation plan that was agreed upon by Japanese courts and creditors.
Despite these developments, Mt. Gox has faced criticism for its lack of communication regarding the reasons for the extended deadlines. Creditors will now have to wait an additional year for potential repayments, which may be received at a significant discount compared to current market prices.
At the time of writing, Bitcoin is trading at $114,813, with gains of 2% and 3.5% in the 24-hour and seven-day time frames, respectively. This puts the leading cryptocurrency in the market only 8.8% below its all-time high of $126,000.
Featured image from DALL-E, chart from TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
#Defunct #Bitcoin #Exchange #Gox #Extends #Repayment #Deadline #October