Major Mt. Gox Creditor Opts for Early Payout, Signaling Potential Shift in Progress

Next Cryptocurrency to Explode, 27 November — Telcoin, Memefi, EigenLayer

Top Trending Cryptos on TRON Chain Today – JUST, HTX DAO, WINkLink

Join Our Telegram channel to stay up to date on breaking news coverage

What – Mt. Gox, a popular crypto exchange, went bankrupt due to a hack that crippled its financial standing.
Why – The exchange and many of its investors lost their BTCs.
What Next – A recent update on the bankruptcy proceeding is that one of its top creditors has opted to receive an early payout option.

Mt. Gox crypto exchange and many of its investors lost their BTC. The lost amount was $473 million but is now $20 billion at the current market rate.

Bankruptcy is not a new occurrence in the crypto industry. Last year, 2022, saw many crypto exchanges, such as Celsius, Voyager Digital, FTX, and Three Arrow Capital, go out of service due to mismanagement of funds and loss of revenue.

Top Creditor Chose to Lose Now

According to a Bloomberg report, Mt. Gox Investment Fund is the top creditor of the crypto exchange opting for early payout. This choice means it is willing to accept losses from its total assets. Also, the payment will be paid this year instead of when the bankruptcy proceedings end in some years.

So, instead of getting the full amount the exchange owes, Mt. Gox Investment Fund will take 90%, forfeiting the rest. Moreover, the creditor will receive its payments in crypto in this early payout option, making the process faster. The bankruptcy trustees won’t have to sell tokens for fiat to make the payment.

In Bloomberg’s report, paying the creditor in BTC protects the number one coin and general crypto market. If the trustees sell a large amount of Bitcoin to generate fiat, panic will set in as investors may think that whales are dumping their BTC holdings. By that, BTC price might plummet, spreading to other cryptocurrencies.

Most importantly, the other creditors have until March 10, 2023, to choose between receiving 90% of their funds in September or waiting for more after the court proceedings.

Notably, the Mt. Gox trustee Nobuaki Kobayashi has notified the remaining creditors to complete all the steps before the deadline. According to Kobayashi, failure to do that will result in visiting the Japanese head office with their documents and receiving payments in yen.

A brief on Mt. Gox Exchange Crash

Mt. Gox exchange collapsed in 2014, leaving investors angry and confused. It started a gradual capitulation until finally filing for bankruptcy. According to the exchange, in 2014, hackers stole 100,000 BTC from its assets and 750,000 BTC from its customers’ assets.

Before the infamous hack that destroyed it, the exchange was also hacked in 2011. According to the details, hackers compromised a computer and altered the nominal BTC value to 1 cent. The incident led to the loss of 2000 Bitcoin.

After the first hack, the exchange rose again in 2013 and became the largest BTC transaction handler, amounting to 80% of all. Then on February 7, 2014, the second hack that pushed it out of the industry occurred due to a bug. From that day, the exchange spiraled downwards until it finally filed for bankruptcy on February 28, 2014.

Fight Out (FGHT) – Newest Move to Earn Project