Here’s Why Mt Gox’s Largest Creditors Want to Get Paid in Bitcoin: Report

The largest creditors of bankrupt cryptocurrency exchange Mt. Gox have chosen a payment option that will allow them to receive a lump sum of their recovery payout in bitcoins rather than fiat.

The creditors, now-defunct crypto exchange Bitcoinica and Mt Gox Investment Fund (MGIF), collectively represent about one-fifth of the bankruptcy claims.

Gox Biggest Creditors Choose Bitcoin Payment

Both entities have opted to receive up to 90% of their claims in BTC during the early payout scheduled for September 2023, Bloomberg reported Friday, citing people familiar with the matter.

An early payout means creditors don’t have to wait another nine years for Mt. Gox to resolve all of its litigation, although waiting would offer higher payouts.

Bitcoinica and MGIF’s decision to receive an early payout in BTC eases concerns about a massive bitcoin sell-off in the coming months as Nobuaki Kobayashi, the bankruptcy trustee, won’t have to liquidate the assets in the open market for the repayment.

Over $3.5B Worth of Bitcoin with Mt. Gox Trustee

Mt. Gox became insolvent nine years ago after a devastating hack that led to the theft of 850,000 BTC, valued at $460 million at the time of the incident. Since its bankruptcy, the company has been deep in paperwork, planning how best to compensate creditors.

As of September 2019, the trustee’s holdings contained 141,686 BTC, 143,000 bitcoin cash (BCH), and 69 billion Japanese yen, currently valued at $3.4 billion, $18 million, and $512 million, respectively.

Creditors Have Until March 10

In July 2022, Kobayashi announced that creditors could claim up to 90% of assets in early payouts via BTC, BCH, or fiat instead of waiting for another five to nine years for the firm to conclude its civil rehabilitation litigation.

According to a January report, creditors now have up to March 10 to accept an early lump sum payment offer. Those who agree must also register and select a payment option before the deadline.