Mt. Gox’s Creditors Choose Smart Payout Option to Keep Bitcoin Prices Stable – What Can We Learn from Them

The early lump sum payment they picked is set to be paid out in September. The option to wait until all Mt. Gox litigations settle could net higher payouts but may take another five to nine years, sources said. However, they are still considering waiting for a potentially larger payout.

The two creditors, Mizuho Bank and Mitsubishi UFJ Financial Group, will receive about $1.9 billion in bitcoin, the people said.
The two creditors, Mizuho Bank and Mitsubishi UFJ Financial Group, have elected to receive their bankruptcy recovery in bitcoin, according to people familiar with the matter. This will give them about 1,000 bitcoin each.

The defunct New Zealand-based crypto exchange Bitcoinica and MtGox Investment Funds (MGIF) are set to receive 90% of their collectable funds. The funds, which represent about a fifth of all Mt. Gox claims, are calculated at approximately 21% of what they had locked on the platform at the time of the hack in 2014.

Their decision to pick the former option could soothe longstanding fears among bitcoin holders that a wave of simultaneous liquidations tied to Mt. Gox bankruptcy recoveries could drive down the price of bitcoin. Had these two creditors opted to take the payout in fiat, the trustee overseeing the bankruptcy estate would likely have been compelled to sell off a significant portion of Mt. Gox’s recovered bitcoin holdings to fulfill all the fiat requests.

The payouts, part of the early lump sum option offered to creditors, are now expected on Sept. 30. However, the Japanese trustee overseeing the repayment process has a history of kicking the can on past deadlines.

Creditors of Mt. Gox, one of the first and largest crypto exchanges in the world, have been waiting nearly a decade to get a portion of their money back. In 2014, hackers made off with 850,000 BTC, a sum valued at $460 million at the time. Mt. Gox was left with approximately 142,000 BTC, 143,000 bitcoin cash (BCH), and 69 billion Japanese yen.

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