Bitcoin ensured one of its darkest and most enduring days five years ago today when Mt. Gox, at the time the biggest Bitcoin exchange in the world, confirmed that they had suspended all trading and taken themselves offline following reports that they were insolvent. This was the first public chapter in a story that still rumbles on all these years later. Five years after the exchange closed its doors, how far away are the victims from getting their stolen funds back?
— Ryan Selkis (@twobitidiot) February 24, 2014
Mt. Gox Customers’ Five Year Fight
The Mt. Gox hack involved the theft of 850,000 Bitcoin over a three-year period, leaving a swarm of shocked and angry investors and shareholders. The collapse of Mt. Gox left thousands facing a legal fight to get their hands on their share of the hundreds of thousands of BTC and BCH that were left in Mt. Gox’s coffers as a bankruptcy case opened in Japan. As with any bankruptcy case, the Japanese court ruling over it stated that any remaining Mt. Gox assets needed to be liquidated in order to make restitution to the victims. This understandably upset those who had lost Bitcoin and wanted it back, not the dollar value at the time of the hack, which was a lowly $454.
Slow Progress for Victims
In 2016 the Japanese court appointed a trustee, Nobuaki Kobayashi, to liquidate the BTC and BCH on behalf of the investors, which he has been doing, with some accusing his sales of crashing the Bitcoin market. Two more years passed before any meaningful progress was made, when Kobayashi announced in March 2018 that he had sold enough BTC and BCH to cover the claims made, stating that 2019 could be the year that Mt. Gox victims finally started to receive what they are owed. In August last year a resolution was proposed where former investors would be paid back in BTC and BCH rather than having more funds liquidated, a move that satisfied both those owed money and those who were worried by the impact on the market of Kobayashi’s hoard of 160,000 BTC and 168,000 BCH that would otherwise need to be liquidated.
Countdown to Payouts
The current sentiment among Mt. Gox creditors is generally one of cautious optimism. The next creditor meeting is due to take place in Tokyo on March 20, where the request to pay investors back in BTC and BCH should be approved. With creditor numbers and details now confirmed, there shouldn’t be more than a bit of red tape barring the first payouts, which, should everything go as expected, are slated for mid-2019. All eyes therefore will be on the meeting in March which could, finally, set the rubber stamp on a process that has been over five years in the making and that many investors assumed might never happen.