$3 Billion of Lost Bitcoin Are Finally Being Returned By Mt Gox

On July 6 the users of the Mt Gox company received mail which was a result of their long battle with the company of losing 850,000 Bitcoin in the year 2014. The planning of this rehabilitation was already ordered by the Tokyo District Court on 16 November 2021 but the official mail to all the creditors was sent in July. In this mail, the creditors were informed that they will receive the repayments in August in a total of 137,000 BTC or a value of $ 3 billion. 

The creditors are given the option where they can choose the form in which they want to be compensated for their lost BTC. If they want the compensation now they can choose between Bitcoin and Bitcoin Cash, and if they want to be compensated with more funds they will have to wait for that. According to the 2019 Trustee report, the company is holding 141,686 Bitcoin, 142,846 Bitcoin cash, and 69,776,002,441 Japanese yen. 

This took 8 years to get a clear answer on getting back the crypto so it is an exciting investment for the people but the rest, it is a little concerning that this liquidity might endup becoming a fall in the prices of Bitcoin, especially when the crypto market is already struggling and the prices are in dip already. 

Bitcoin

The amount that will be distributed is worth $ 3 Billion which sounds like a high price but it is only 8% of the total Bitcoin circulating supply value, so the chances of causing a big impact on the price are comparatively low. 

The procedure of the rehabilitation is provided to all the creditors, and the documents contain information on the whole process depending on whether they want the Lump sum repayment or not. 

How have things led to the current situation?

Let’s talk about the history of Mt. Gox and what led to this situation because at a time the company was known as the biggest Bitcoin exchange carrying almost 70% of the total Bitcoins circulating supply. 

Mt Gox was established in the year 2006 by Jed McCaleb, and initially, it was an exchange for the online card game known as Magic: The Gathering online cards. This is where the company got its name. After 4 years 2010, the company decided to shift to the Bitcoin Exchange company. Just after a few months, the CEO decided to sell the company to Mark Carpeles and the company started making a good profit.

The company was facing complications from the start as in June of 2011, the company reported that around 25,000 BTC was robbed through a compromised computer. Next, another 2,000 BTC were stolen when the hacker temporarily plummeted the price of the Bitcoin from $17 to $0.1 with the help of the artificial trading activity.

There were many other issues in between like the Accidental transaction log fork which happened in 2013 and led to a 23% cash. Next was the 50% crash which happened in April because of the suspended trading. Next, the company faced a $75 Million lawsuit and an arrest warrant in May.  

In the year 2013, the company reached its all-time high profit as Bitcoin reached the price of $1k but this only lasted short as by the start of February 2014, the users started complaining about the big delay in the Bitcoin Withdrawal. And by 10 February,  the company announced that they found a bug in their system which was altering the transaction details. 

By the 20th Feb, the CEO of the company Mark resigned from the board of the BTC Foundation and by the 24th the company revealed that they lost 850,000 BTC (750,000BTC of the clients and 100,000 BTC of their own). Within the next 4 days, the company also declared Bankruptcy. 

Some of these lost BTC were recovered on the 20th of March 2014, the total number that got recovered was 200,000 which was only 4% of the lost Bitcoin. But in August 2015, the CEO of the company was arrested for Fraud. Mark manipulated the computers of the company to show the incorrect balances and stole $2.3 million of the user fund. He was charged with fraud and given a Jail time of 30 months. 

So the history of the company was full of ups and down, well more of downs. The users are supposed to be rehabilitated in the ongoing month of August, so we need to see what kind of impact it will create on the Bitcoin price.

For crypto-related information, news and updates stay connected with the Suncrypto Academy.  

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. All content provided is for informational purposes only, and shall not be relied upon as financial/investment advice. Opinions shared, if any, are only shared for information and education purposes. Although the best efforts have been made to ensure all information is accurate and up to date, occasionally unintended errors or misprints may occur. We recommend you to please do your own research or consult an expert before making any investment decision. You may write to us at [email protected].

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