Many people may have forgotten Mt. Gox by now. It was a cryptocurrency exchange operating out of Tokyo, Japan, before it got hacked and the exchange collapsed.
But now it’s back in the news since there are reports of a movement of 16,000 Bitcoins (BTC) valued at around $140 million from different wallets leaving zero balance in their accounts.
Hundreds of people lost their deposits four years ago and the case is still ongoing in Tokyo courts.
A court-appointed trustee and lawyer, Nobuaki Kobayashi, has taken it upon himself to return funds to the creditors whose cryptocurrency assets have been blocked since 2014.
This happened when the exchange shut down and Mt. Gox’s founder, Mark Karpeles, declared bankruptcy announcing that the hackers had stolen a huge amount of Bitcoin and other currencies from the exchange. The legal battle is to bring him to book since the investors suspect he had embezzled the funds.
It appears Kobayashi may be preparing to refund the creditors and report back to the court.
Are These Moves Affecting the Price of Bitcoin?
The price of Bitcoin is a subject of interest worldwide.
Those who have already invested their life’s savings and many more, who are keen to making an investment in the cryptocurrencies, follow the price movements closely.
The last time when there was a crash in the BTC prices, it was later partially attributed to the Mt. Gox selloff.
Even this time, there are those who swear that there is a connection between the dip in Bitcoin price in late-April to the large amount of Bitcoins and Bitcoin Cash that have been moved out of the account. But there was no sale effected; it has only been moved from one wallet to another.
Creditors Still Unhappy
The larger question facing Kobayashi is the method of settling the dues to the creditors. He is undertaking the exercise under bankruptcy proceedings, whereas the creditors want it to be changed to civil rehabilitation. If Kobayashi goes ahead and liquidates these assets, he will reimburse the creditors at the rate of $480 held by them (because that was the ruling price in 2014 when Mt. Gox went under).
If the case is dealt with as a civil rehabilitation process, they can be returned the actual amounts of Bitcoins held by them on that date. That would mean a windfall for these creditors as the BTC price is at least 20 times more today.
The worst part of the bankruptcy proceedings being pursued now is that once the creditors’ dues have been settled at $480 per Bitcoin (held by them in 2014), the remaining Bitcoins will be transferred back to the original shareholders of Mt. Gox including Mark Karpeles, and he would stand to gain billions of dollars.
That would be an irony, since he is the one the investors blamed in the first place for the disaster that happened to the exchange, which was once handling over 80 percent of all cryptocurrency transactions worldwide in 2010.