MCS | Mt. Gox Repayment Plan Gains Final Approval

MCS | Mt. Gox Repayment Plan Gains Final Approval


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The Japanese cryptocurrency exchange Mt Gox, which is now declared bankrupt, was established in July 2010 as the world's largest cryptocurrency exchange. As the name of MTGOX (Magic The Gathering Online eXchange) suggests, it started as an online card exchange for "Magic The Gathering," a famous trading card game (TCG). It has since then developed into the world's largest cryptocurrency exchange.

Mt Gox continued to grow in influence in the market, and in 2013 it became a very influential exchange, accounting for half of the world's bitcoin trading volume. However, a severe and massive drawback of being very vulnerable to security eventually led to the case hacking of 850,000 bitcoins in 2014. The need for security improvements was already well known through the small-scale Bitcoin thefts that occurred several times before the incident, but the failure to improve it drew criticism from then-Mt Gox CEO Mark Karpelès.

The hacking incident of Mt Gox, which had a global presence, had a significant impact on the market. The price of Bitcoin had fallen by more than 90% in 2015, and it took another three years for the price to rise again.

Meanwhile, in 2017, Alexander Vinnik, the culprit of the Mount Gox hack, was finally arrested.

Source: Bloomberg

Kim Nilsson moved from Sweden to Japan to track down the hackers and established a blockchain security company called WizSec to start tracking stolen bitcoins in earnest. After tracking about 2 million Bitcoin addresses, he found that 630,000 of the hacked coins were deposited into the same wallet, and the owner of the wallet was Alexander Vinnik, one of the operators of the Bulgarian-based cryptocurrency exchange BTC-e.

In 2014, the price of bitcoin, which was less than $1000 at the time of Mt Gox's bankruptcy, soared nearly 100 times in seven years. The creditors' compensation plan for 150,000 bitcoins that suffered damage obtained final approval from the Japanese bankruptcy trustee. It will be distributed to them in the near future.

Although the exact timing and specific amount related to Mt Gox compensation for hacking damage have not been announced, it seems very likely that the Bitcoin price and the overall cryptocurrency market will be affected depending on the timing and compensation plan.

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