Trustee publishes next steps over $263M for Mt. Gox creditors

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The trustee of the failed Mt. Gox cryptocurrency exchange has published fresh documents, spelling out decisions taken at a recent meeting of creditors.

Trustee Nobuaki Kobayashi announced the amount secured for creditors stands at $623 million, slightly down from the figures discussed at the first creditors’ meeting. This amount will now be transferred to a ring fenced trust, to the benefit of creditors of the exchange.

When Mt. Gox collapsed in 2014, it was the world’s largest crypto exchange, handling some 70% of all Bitcoin transactions at the time. However, after a massive hack exploited gaps in the platform and its technology, the exchange was left facing insurmountable losses.

The hack cost $450 million in client funds, of which some 850,000 were subsequently valued in the billions at the height of the Bitcoin Core (BTC) bubble in December 2017. As a result, a large number of customers found they were unable to access their funds—a position that remains unchanged five years later.

Kobayashi was appointed to administer the remains of the exchange, on behalf of those still owed money from Mt. Gox, after former CEO Mark Karpeles was ruled unsuitable to manage their exchange through its bankruptcy proceedings.

Karpeles has been accused of several crimes in connection with the collapse, including fraud and embezzlement. The disgraced CEO has already spent 12 months behind bars, but has been cleared on charges of stealing Mt. Gox money recently.

The Mt. Gox case was subsequently linked to the high profile case of Alexander Vinnik, a Russian citizen formerly responsible for the now-defunct BTC-e crypto exchange platform. Vinnik was reported to have received some of the money stolen from Mt. Gox, and was flagged over suspicions fraudulent activity in money laundering in the order of $4 billion.

Today’s news will be comfort for those Mt. Gox creditors still waiting to get at least some of their money back from the exchange.

While lessons have been learned from Mt. Gox, it is far from the only exchange to have suffered a devastating hack. Even in recent months, several other exchanges have run into difficulties after hacks and thefts, underlining the need for effective planning.