The Bitcoin exchange platform, Mt.Gox, may soon be required to distribute 200K to its creditors upon a lingering lawsuit.
The Japan-based exchange was at one time a significant BTC offering exchange handling over 70% of the global BTC transactions. Somewhere along the lane, the company filed for bankruptcy after suffering a massive loss that saw them short of 850,000 BTC coins after a hack.
Recently, the exchange announced that Japan would seek to close the bankruptcy case. Surfacing evidence during the lawsuit also pointed out massive laundering of approximately $6 billion worth of Bitcoins. So far, the exchange has recovered about 200k Bitcoins. It is expected that the court will order Mt.Gox exchange to distribute these funds among its long due creditors after having waited almost a decade for reimbursement.
It is yet to be decided whether the exchange will reimburse the assets in the 2014 fiat value or the current one. The distribution go-ahead is entirely dependant on whether the Japanese court passes a civil rehabilitation plan.
Should the funds be distributed as per the 2014 fiat value, several Mt.Gox investors will wake up crypto millionaires. Mind you, some of the exchange’s investors have already demanded their payout in more than hundreds and thousands of Bitcoin.
A Possible Bitcoin Market Shock Awaits
The prices of Bitcoin have constantly spiked and dipped more than 100 times between 2014 and now. It is no surprise that the creditors are favouring reimbursement in Bitcoins. Most of these creditors are voting yes on a rehabilitation plan to be filed in the Japanese court by 8th October.
Suppose the motion passes, a massive payout of over $6 billion worth BTC can cause a market shock if recipients dump them en masse. As the holders of Mt.Gox start to liquidate their assets, the overall impact of the bitcoin price is going to be brutal.
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