Mt. Gox’s Biggest Creditors Save Bitcoin from Massive Sell-Off in Payout Decision

Sources say that the early lump sum payment that they picked is set to be paid out in September. The option to wait until all Mt. Gox litigations settle could net higher payouts, but it could take another five to nine years.

The two biggest creditors of Mt. Gox, the crypto exchange that failed due to a hack nine years ago, have elected to get their bankruptcy recovery paid out mostly in bitcoin (BTC), according to people familiar with the matter. They have also agreed to receive their payments in installments over the next few years, which will allow the creditors to benefit from any increase in the value of bitcoin.

Mt. Gox's Biggest Creditors Save Bitcoin from Massive Sell-Off in Payout Decision

Bitcoinica and MtGox Investment Funds, which together represent about a fifth of all Mt. Gox claims, will get paid 90% of their collectable funds.

Two creditors of bankrupt bitcoin exchange Mt. Gox have decided to take their payout in the form of the digital currency, rather than fiat currency. This decision could have a significant impact on the price of bitcoin, as it would avoid a wave of simultaneous liquidations that could drive the price down. If these two creditors had opted for fiat payouts, the trustee overseeing the Mt. Gox bankruptcy would have been forced to sell a significant portion of the recovered bitcoin holdings.

Creditors who choose to wait may have to hold tight for a while – the litigation surrounding the bankruptcy may take another five to nine years, documents reviewed by CoinDesk indicate. The move by Bitcoinica and MGIF removes a significant portion of the total claim from any future battle.

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