After more than 10 years, creditors of Mt. Gox, once the world’s leading cryptocurrency exchange platform, are finally beginning to see the light at the end of the tunnel with the start of repayments of their funds frozen since the company’s bankruptcy. Curiously, some of them received their funds in duplicate.
Mt. Gox begins refunding customers
The former cryptocurrency exchange platform, Mt. Gox, began repaying its creditors on Boxing Day
In 2013, over 10 years ago, Mt. Gox declared itself insolvent following a hack of the platform, resulting in the blocking of 140,000 Bitcoins, equivalent to $6 billion at today’s exchange rate, as well as a loss of 80,000 Bitcoins, now equivalent to $3.44 billion. At the time, Mt. Gox accounted for around 70% of the world’s cryptocurrency trading volume.
On November 23, 2023, Mt. Gox announced that cash repayments to creditors would soon begin, and would be spread over the year 2024.
It was on the Reddit channel “r/mtgoxinsolvency” that several Internet users first announced that they had received their refunds from the platform:
Reddit post by an Internet user announcing that he has received his funds
As Mt. Gox, the first to be reimbursed will be customers who opted to pay in fiat currencies via PayPal, while those who prefer to receive Bitcoins will have to wait a few more months, if the announced deadlines are met.
Some creditors received duplicate payment
Strangely and worryingly, some creditors received the refund confirmation email twice, as well as 2 payments on PayPal.
A poll on the same Reddit channel as mentioned above reveals that out of 35 people who said they had received their refund, 25 claim to have received a duplicate payment.
Reddit poll results
Although this figure is too low to be a reliable statistic, if more than 50% of creditors receive a double refund, this could lead to significant accounting problems, potentially impacting other creditors awaiting repayment.
While the Mt. Gox affair, seems to be coming to a close after more than a decade, attention is now redirecting to another affair affecting cryptocurrency exchange platforms: the FTX affair. One year after the bankruptcy of this platform, its customers find themselves in a situation of uncertainty similar to that experienced by Mt. Gox users for several years.
Recently, Sam Bankman-Fried, FTX’s former CEO, was convicted on 7 counts, facing up to 110 years in prison. The platform, meanwhile, still has $1.42 billion to raise if it is to repay its customers, in addition to a $24 billion tax debt to the US government.
FTX has already drawn up a restitution plan, designed to compensate customers affected by the platform’s bankruptcy. This plan proposes to reimburse customers up to the dollar value of their assets at the time of bankruptcy. Before being implemented, the plan will need to receive approval from the U.S. Bankruptcy Judge in 2024.
