Mt. Gox Creditors Begin Receiving Reimbursements From Bitstamp After Decade-Long Wait

Bitstamp, one of the five exchanges chosen by Mt. Gox's bankruptcy estate to effect reimbursements to its creditors, began the process on Thursday.

Bitstamp, a cryptocurrency exchange, has begun sending funds to creditors of bankrupt exchange Mt. Gox. Creditors that were assigned to Bitstamp will receive bitcoin (BTC), Bitcoin Cash (BCH), and Ether (ETH) from the exchange.

The exchange is expected to finish sending the funds to creditors within a week after putting in place adequate security protocols. Several other virtual asset service providers (VASPs) are also working with Mt. Gox to process the refunds, including Kraken, Bitbank, BitGo, and SBI VC Trade.

Out of these, only Kraken had completed its part in routing funds back to creditors on July 24. The others are yet to begin.

When the Mt. Gox’s trustee announced the repayment plan, the defunct exchange had $9.6 billion to work with. About 127,000 creditors were eligible for claims. Now, it holds $6 billion, which it has to redistribute. That amounts to 90,000 BTC, alongside considerable amounts of BCH.

These funds have been locked due to Mt. Gox’s bankruptcy filing, which was triggered by serial hacking incidents that lasted two years. Those receiving their funds must be delighted, considering the price increases of BTC from ten years ago.

As Bitstamp-allocated creditors receive their funds soon, expectedly, those in the UK may have to wait sometime. That period can add up to a few months. The exchange will inform UK creditors in due time.

While these repayments are expected to add selling pressure on the asset, BTC prices did not move as much as anticipated after the Kraken-directed reimbursements. Similarly, analysts now expect it to not drop by a lot with Bitstamp-directed reimbursements. Creditors have not dumped their repayments as once predicted.