Mt. Gox, bankrupt 10 years ago, has once again become one of the most talked-about topics in the cryptocurrency field.
At 4:00 am on the night of July 4th to 5th, the Mt. Gox wallet transferred over $2 billion, signaling the beginning of the plan to compensate investors. However, fear of massive sell-offs has overtaken the market, leading to a significant drop in the price of Bitcoin. The $9 billion to be distributed by the failed crypto exchange is one of the main factors causing the current panic. But are these fears justified? And, more importantly, how much will Mt. Gox investors be compensated?
Should investors fear a market crash?
Investors will have to choose between fiat and crypto payments. All cash balances of investors will be paid out in full. Those who wanted to sell may have already done so, as fiat currency payments began in April. Therefore, those receiving BTC are likely people who won’t sell them beforehand, as they would have chosen to receive fiat if they wanted to.
In addition, not all payments will be made at once, as there are two types of payments: ELSP (receive everything now) and FP (receive a small percentage now, and the rest after several months/years). ELSP payments will also not be distributed all at once; they are likely to be made over a few months (between July and October). Therefore, even if many people decide to sell, there won’t be enormous selling pressure.
How much money will Mt. Gox investors receive?
The affected individuals do not have as large a profit as many believe. Unofficial information suggests that those receiving restored BTC tokens will only get about 15% of their losses, meaning 1 goxBTC = 0.15 BTC -> 1 BTC = 6.67 goxBTC. Therefore, the effective price at which their assets were locked is around $8,300.
In conclusion
This is not confirmed information, and these percentages may change. However, it is certain that if an investor had 10 BTC at the time of the bankruptcy, they will not receive the equivalent amount (~$553,000) based on current prices. While some may consider this compensation unfair given the current cryptocurrency prices, Mt. Gox’s liquidators have devised the best possible plan for the benefit of all parties. The investors’ money is there, and anyone who has filed a claim for compensation will be reimbursed.
The CryptoDnes team contacted the law firm “Mori Hamada & Matsumoto,” representing some Mt. Gox investors, but they declined to comment due to a conflict of interest. Attempts were made to reach lawyer Nobuaki Kobayashi, representing the exchange, but at the time of writing this article, he had not commented on the compensation plan.