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After a decade of waiting and a 10,000% price increase, the collapsed Japanese Bitcoin exchange Mt. Gox's creditors are finally getting ready to collect what they are owed. The exchange, which filed for bankruptcy in 2014 following a major hacking attack, is ready to repay creditors who have been handsomely rewarded for their patience.
In 2011, some 950,000 Bitcoins were lost in a hack that saw BTC trading well below its current value. Approximately 140,000 of these coins have been recovered, and at today's prices, this means approximately $9 billion worth of BTC will be returned to its rightful owners.
Plaintiffs include Mt. Gregory Greene of Illinois also filed a class-action lawsuit against Gox and its former CEO. At that time, Greene had $25,000 worth of Bitcoin in her frozen account. With the value of Bitcoin rising from around $600 today to over $60,000, Greene's stash of losses would be worth about $2.5 million, a gain of 10,000%. However, the exact amount he will receive from the payments, which are expected to begin in July, remains unclear.
Cryptocurrency lending firm Ledn's Chief Investment Officer John Glover said creditors are about to receive a historic windfall. “Many of them will obviously withdraw their money and enjoy the fact that their assets trapped in the Mt. Gox bankruptcy were the best investment they ever made,” Glover said in a statement.
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Mt., whose acronym is derived from “Magic: The Gathering Online Exchange.” Gox closed its doors in February 2014 following a series of hacking incidents. The company blamed a bug in the structure of BTC for the disappearance of BTCs. Mt. According to Gox, coins may have been illegally moved from their accounts by hackers, while users received missing transaction messages when accessing the exchange.
The court-appointed trustee overseeing the exchange's bankruptcy proceedings announced Monday that distributions to the firm's approximately 20,000 creditors will begin next month. Payments will be in the form of a mix of Bitcoin and Bitcoin Cash, an early fork of BTC.
Luke Nolan, Ethereum researcher at digital asset management firm CoinShares, Mt. Gox said a key reason creditors prefer to be repaid with the same type of asset has to do with tax consequences. JPMorgan noted on Monday that people tend to accept their payments in crypto, either for tax reasons or because they believe liquidating now will negate potential price increases in the future.
Glover suggested that these are ways to avoid a huge capital gains tax while still benefiting from Bitcoin's massive appreciation. “Those who live in countries with a capital gains tax may choose to hedge their positions to avoid this large tax bill and instead use their BTC as collateral to borrow dollars so they can cash out their BTC without having to sell it,” Glover said.
*This is not investment advice.
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How Will the $9 Billion Mt Gox Earthquake in Bitcoin Affect the Market? Here Are Two Expert Opinions

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Alte articole publicate pe 30 iun. 2024

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