Mt. Gox Creditors Receive First Batch of Payments via PayPal

A Long-Awaited Compensation for Bitcoin Losses

After nearly a decade of waiting, some creditors of the defunct crypto exchange Mt. Gox have reported receiving fiat repayments for their trapped Bitcoin via PayPal. The payments are part of the rehabilitation plan approved by the Tokyo District Court in February 2021, which aims to distribute about 141,686 BTC and 143,000 BCH from the Mt. Gox estate to the eligible claimants.

Mt. Gox was once the largest Bitcoin exchange in the world, handling over 70% of all transactions. However, in 2014, it collapsed after losing about 850,000 BTC in a hack, leaving thousands of customers in limbo. The exchange filed for bankruptcy protection in Japan and initiated a lengthy legal process to recover and distribute the remaining assets.

A Complex and Controversial Rehabilitation Plan

The rehabilitation plan, overseen by the trustee Nobuaki Kobayashi, has faced several challenges and delays over the years. Some creditors have objected to the plan, arguing that it is unfair and does not reflect the current value of Bitcoin. Others have opted for an early payout option, accepting a lower amount of cash in exchange for giving up their rights to the remaining assets.

According to the plan, creditors will receive 90% of their approved claims in Bitcoin or Bitcoin Cash, and 10% in cash. The cash payments will be made in Japanese yen, regardless of the currency of the original claim. The plan also states that the trustee will use the exchange rate of $483 per BTC and $50 per BCH, which are the prices at the time of the commencement of the civil rehabilitation proceedings in 2018.

A Mixed Reaction from the Creditors

Some creditors have expressed their satisfaction and relief on social media platforms, such as Reddit and Twitter, after receiving their cash payments via PayPal. One Reddit user posted a screenshot of their PayPal account, showing a payment of 1,337,272 yen (about $11,800) from the trustee. Another user commented that they received 2,674,544 yen (about $23,600) for their claim of 5.5 BTC.

However, not all creditors have received their payments yet, and some have reported issues with the online claims filing system. Some creditors have also complained about the low exchange rate and the conversion fees charged by PayPal. One Reddit user calculated that they lost about 20% of their claim value due to the exchange rate and fees.

The trustee has not announced the exact date for the distribution of the cryptocurrency payments, but has stated that he is making efforts to commence them shortly. The trustee has also advised the creditors to check their status and information on the online system and to complete the required details for receiving their funds.