After more than seven years, the victims of the legendary Mt.Gox hack are finally being compensated. Bankruptcy trustee Nobuaki Kobayashi said that the rehabilitation plan is now ‘final and binding’ and that he will soon pay out. Reportedly, there would be millions of dollars to distribute and about 140,000 BTC, worth about ??????? 7.5 billion euros.
In February 2014, the Japanese bitcoin exchange Mt.Gox closed its virtual doors and filed for bankruptcy. The largest bitcoin exchange in the world at the time turned out to be hacked and lost 850,000 BTC in customer funds. With a market cap of $460 million at the time, it was the biggest hack ever, and in bitcoin it still is.
Mt.Gox grew into the largest bitcoin exchange, but it started as an online trading place for Magic: The Gathering cards. The abbreviation Mt.Gox therefore stands for ‘Magic: The Gathering Online eXchange’ .
The impact at the time was huge. Mt.Gox was the largest and most popular exchange in the world and some 24,000 early bitcoiners were duped by the hack and lost their assets. Many a bitcoiner was left disillusioned and it turned out to be the beginning of a long and excruciating bear market .
Now, seven years later, it seems that the victims can finally look forward to compensation. Namely, the trustee of the Mt.Gox funds Nobuaki Kobayashi announced by letter that the rehabilitation plan to compensate the victims has been approved by the court in Tokyo and is now ‘final and binding’. It was the latest step in a process that has been going on since 2018.
Kobayashi writes that he will soon pay out according to the plan and that creditors can expect a letter with additional details.
140,000 BTC
Kobayashi reportedly has hundreds of millions of dollars to distribute and approximately 140,000 BTC, with a current market value of approximately $7.5 billion. It is not entirely clear whether the payout will be in bitcoin or in a fiat currency, although the letter does state that creditors must provide their bank details.
Some have feared for years about the possible consequences for the bitcoin market if such a large amount of bitcoins were released, because an increase in the supply of bitcoins on the free market could have a depressing effect on the price.
Not your keys, not your coins
Bitcoin is the most secure network in the world, but exchanges are businesses and they can be hacked just like any other business. Since exchanges centrally manage funds from thousands of clients, the potential loot is significant and therefore they are regularly targeted by hackers. The hack on Mt.Gox is best known, but over time many other exchanges – large and small – have also been hacked.
Experienced bitcoiners now know that exchanges and other service providers are not the safest places to store bitcoins. If the exchange or service provider gets hacked, you could lose everything and it could be years before you see any compensation.
Newcomers are therefore regularly urged by the bitcoin community: “Not your keys, not your coins” . If you do not have access to the private keys that give access to the bitcoin addresses where your bitcoins are stored, then you do not really control them yourself and you are dependent on a third party – with all the risks of serve.
Own Bitcoin? That is not difficult at all today. We explain the basics in our quick guide for beginners.
