Mt. Gox Extends Repayment Deadlines: A Closer Look at the Latest Developments


Trustee Extends Repayment Timelines

In a significant development, Nobuaki Kobayashi, the Rehabilitation Trustee overseeing the affairs of the once-prominent Bitcoin exchange, Mt. Gox, has announced an extension of the repayment deadlines for Mt. Gox’s creditors. Originally slated for completion by October 31, 2023, these repayments are now anticipated to be finalized by October 31, 2024.

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Commencement of Repayments for Eligible Creditors

Kobayashi mentioned that for rehabilitation creditors who have provided all the necessary details, the initiation of the repayment process could potentially occur by the end of the current year. However, he has cautioned that this schedule remains subject to change due to various factors, and the precise timing for each creditor remains uncertain.

A Glimpse into Mt. Gox’s History”

Once a dominant player in the early days of cryptocurrency trading, Mt. Gox handled over 70% of all blockchain trades at its peak. However, the exchange suffered a devastating hack in 2014, resulting in the loss of 850,000 Bitcoins (BTC), valued at nearly $23 billion based on current prices. Since then, the exchange has managed to recover approximately 20% of the stolen tokens.

Market Implications of Repayments”

Under the current rehabilitation plan, Mt. Gox is set to reimburse 141,686 Bitcoins, 143,000 Bitcoin Cash (BCH), and a substantial sum of 69 billion yen. The potential impact of these repayments on the cryptocurrency market is a matter of significant interest.

Options for Creditors: Cryptocurrency or Fiat?

Creditors were given the choice to receive their repayments in either cryptocurrency or fiat currency until the April deadline. The first 200,000 yen (approximately $1,520) of each claim will be paid in yen. For amounts exceeding this, creditors can opt to receive 71% of their repayment in crypto and the remaining 29% in fiat. This mixed-format approach is designed to mitigate the risk of a sudden influx of BTC into the market.

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Significant creditors such as Bitcoinica and the Mt. Gox Investment Funds, accounting for an estimated 20% of all claims, are expected to influence the market impact. The Mt. Gox Investment Fund has already expressed its intention to hold onto their BTC holdings rather than selling them immediately, which could reduce immediate selling pressure in the market.