The infamous Mt Gox hack of 2014 resulted in the loss of approximately 850,000 Bitcoin, with a combined value of over $450 million. Today, those same Bitcoin would be worth a cool $5 billion, with the leading cryptocurrency having appreciated a little over 10x since the date of the hack. Rendered insolvent, Mt Gox entered into criminal bankruptcy, with former owner Mark Karpeles subsequently imprisoned for embezzlement.
Fast forward four years and the impacts of the hack are still being felt. Mt Gox estate Trustee Nobuaki Kobayashi sold off around $400 million in BTC and BCH between December and February to reimburse creditors and cover the exchange’s liabilities, and many blamed this sell-off for the subsequent collapse in crypto prices.
Until today it had appeared that the best creditors could hope for was for their accounts to be settled in fiat currency, at the earlier exchange rate of around $480. But a landmark petition approved by Tokyo District Court has enabled the Mt Gox estate to move into civil rehabilitation, meaning creditors are now likely to be compensated in crypto, at some point in early-mid 2019. The decision means that assets will be reimbursed to creditors themselves rather than distributed amongst shareholders.
Creditors have four months to file “proof of claim” forms, but there’s no guarantee claims will be paid in full, as any settlement will be dependent upon the specifics of the rehabilitation plan developed over the forthcoming legal process. The timeline of this process would seem to represent more bullish news for the markets, as proceedings commence in February, guaranteeing there will be no further sell-offs in the interim. Markets continued to dump today, however, with combined market cap dipping under $260 billion.
