- Some are claiming that MtGox payments are coming this week, but that’s not true
- March 10 is the deadline by which creditors can register their payout preference
- Actual payouts are coming between July and September, with further delays on receipt expected
It’s being perceived as a kind of grey swan that will temporarily kill the Bitcoin market, but Bitcoin holders can breathe a sigh of relief – 142,000 coins are not making their way to MtGox creditors this week as some in the media have been reporting. The confusion has come about because of a March 10 deadline which some have taken as the time when the early lump sum payouts will be processed, but this is not the case, and the actual payouts can be expected much later this year, and may not even be as high as that.
CoinLab Delayed Payouts
MtGox creditors have been trying to get their deposits back ever since the exchange went under in February 2014 following a devastating series of hacks dating back to early 2011. The process has been massively delayed due to the actions of one company, CoinLab, which is holding out for $16 billion it says it is owed by MtGox. It has already started to try and claim this staggering amount through legal action in Japan, which would have delayed payouts by years more.
However, in January 2021 CoinLab was essentially bribed into making an offer – creditors could either get 21% of the value of their claim paid out up front or they could hold out for a potentially higher payout if CoinLab lost its case. Of course, if CoinLab won then this would be a much lower amount. Creditors voted to accept the deal last year, and the payout process was started, with some 142,000 bitcoins prepared to be sent out to exchanges or liquidated into cash, based on user preference.
March 10 Deadline Isn’t for Payouts
The reason why the case is back in the news this month is because of a March 10 deadline, which is on Friday. This is not the day on which the payouts will be sent, this is the deadline by which creditors can register their preferred method of payout; coins, cash, or a combination of both. Once these requests have been gathered then appropriate action will be taken (i.e. the sale of BTC and BCH for those who wish to receive cash), with the payouts actually set to start in July this year and continuing until September.
The coins will be sent to one of a number of exchanges with which creditors have had to register (Kraken pulled out last year after it exited Japan, which delayed things slightly), and indeed some of these exchanges have said that they will need months to process the coins once they do arrive, further diluting the process. And let’s not forget that many of these holders aren’t waiting to get hold of their coins so they can immediately sell them. They were the earliest adopters, and they’re getting their coins in a bear market – many, if not all, are going to be holding, not selling.
All this means that anything you read about a flood of MtGox bitcoins just waiting to crash the Bitcoin market, think twice.