Categories: Icecat

MtGox Rehabilitation Payouts Postponed till March 2020

The Tokyo District Court issued an order to extend the deadline for MtGox rehabilitation to March 31, 2020. The rehabilitation trustee, Nobuaki Kobayashi, who oversees the bankruptcy and now rehabilitation of MtGox needed more time to handle a large amount of claims that the trustee (partially) disapproved, but may become subject to procedures and appeals. Some creditors have objected against so-called self-approved claims without preceding bankruptcy claims.

202K bitcoin dangling above the market

The MtGox estate contains, despite most bitcoin having been stolen, still 202,106 bitcoin, a similar amount of bitcoin cash, or equivalents in Japanese yen, as the trustee has converted over time some of the bitcoins into fiat currency. One such transaction is seen as a trigger event for the bitcoin crash of January 2017.

The postponement of the distribution of bitcoins and equivalents to the creditors, given the huge amounts involved, is often seen as a reason for price hikes. Reversely, the sudden release of this huge lake of bitcoins, with a market value of around 1.6 billion USD, might on itself lead to a new bitcoin crash as the creditors who are waiting already for six years might not be the HODLer type.

Effects of the demise of MtGox

When MtGox went down, it was the largest bitcoin exchange on the planet, and the price of bitcoin crashed dramatically afterwards. It was a kind of single point of failure in the crypto ecosystem. Since then, it took a number of years for the crypto market to recover. Today, there is more diversification than ever in terms of: DLT or blockchain platforms, the number and quality of exchanges, secure wallet solutions, and security derivatives. Still, on a weekly basis, crypto exchanges run into trouble, but it is less of a threat as the industry seems to be learning from it. For example, by subjecting itself to crypto regulation.

NOTE: the author has an interest as he has a relatively small approved MtGox rehabilitation claim.

Martijn Hoogeveen

Founder and CEO of Icecat NV. Investor. Ph.D.

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