Mt. Gox Creditors Up For A Billion Payout In Bitcoins (BTC)

Creditors who lost their Bitcoin (BTC) holdings when Mt. Gox was hacked are to be compensated in Bitcoin (BTC) and not fiat currency, a court has ruled.  The ruling means customers of the once infamous cryptocurrency exchange will walk away with huge paychecks as Bitcoin price had increased by more than ten-fold from $485 at the time when the exchange was hacked.

Tokyo based Mt. Gox was forced to file for bankruptcy after its system was hacked in 2014 resulting in the loss of $850,000 bitcoins valued at $414 million at the time. The hack incidence became the biggest bitcoin theft at the time.

However, it later emerged that the hackers did not walk away with everything as initially feared. The cryptocurrency exchange CEO, Mark Karpeles, had reportedly misplaced 200,000 Bitcoins which the hackers did not get hold of. The remaining Bitcoin holdings were frozen as part of the bankruptcy proceedings.

Mr. Kerpel was arrested in 2015 and stayed’ in Jail for almost a year, accused of embezzlement and manipulation of electronic data, as well as a breach of trust. He is currently on Trial in Japan as the cryptocurrency exchange continues to battle bankruptcy as well as lawsuits lodged by creditors.

Tokyo District Court has since ruled that creditors affected by the hack incidence will have to be paid with the remaining Bitcoin.  Taking into consideration the current Bitcoin price, the creditors are set to share among themselves about $1.2 billion which is the value of 166,344 bitcoins and 168,177 Bitcoin Cash (BCH), up for distribution.

While it might seem like a hefty payout, it is still a shadow of a payout of $4 billion, which the creditors could have walked away with in December, when Bitcoin was trading near all tie highs.  The final payout will depend on how Bitcoin will trade in the coming months. The cryptocurrency has come under pressure in recent months, amidst concerns that the slid could persist below the $6,000 mark.

Creditors affected by the Mt. Gox incidence will have to make official claims before October, to stand any chance of being part of a payout. Those who sold their claims to third parties won’t be lucky. Creditors who have forgotten their passwords or deleted necessary credentials could also struggle to make a claim as part of the rehabilitation process.