Mt. Gox Payouts: Two Opposing Views on Market Outcome

Mt. Gox Payouts: Two Opposing Views on Market Outcome

A five year mess, the result of a 2014 cybertheft by Russian hackers, is nearing the payout stage for the victims.

On the 28th of February 2014, Mt. Gox filed for bankruptcy protection in Tokyo. In the following month the exchange filed for bankruptcy protection in the US. Since then the bankruptcy case was shifted to a Civil Rehabilitation one. The defunct exchange is expected to pay the claimants in BTC instead of exchange rate equivalent (2014) fiat money. Mt. Gox will be paying 160,000 BTC, correspondingly $1 billion in today’s market worth.

Nobuaki Kobayashi, Mt. Gox’s bankruptcy trustee, has released a rehabilitation filing system which will allow corporate users to file proofs of their claim online. Investors can file by the 22nd of October 2018. As for individual traders, they were allowed to file their claims earlier. The deadline for the filing, for individual and corporate investors, will be in the 14th of February 2019.

Kim Nilsson of WizSec, who was a Mt. Gox client and who began an investigation on Mt. Gox’s bankruptcy, claims that the dark cloud of a price crash looms over the $1 billion payouts. This could worsen if there would be an inadequate demand for the Mt. Gox six-figure BTC.

But an opposing viewpoint has come to light. It deduces there is no indication that a number of claimants are intending to sell-off the reimbursed BTC. Another reasoning put forth is that BTC will go through a series of system upgrades: atomic swaps and the Lightning Network which will enhance system performance.

The $1 billion worth of BTC is just 1 percent of BTC’s total market value. It is further argued that BTC is not synonymous with Mt. Gox. Once the claims have been paid back, BTC will continue to be, and Mt. Gox will just be a small glitch in its much bigger history.

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