Kraken starts returning Bitcoin to Mt. Gox hack victims, a major step in resolving the decade-old case involving the theft of 850,000 Bitcoin from the former top crypto exchange.
TLDR:
- Kraken has begun distributing Bitcoin and Bitcoin Cash to customers affected by the Mt. Gox hack from 10 years ago.
- Mt. Gox was once the largest crypto exchange, handling 70% of all Bitcoin transactions globally before collapsing in 2014.
- Hackers stole 850,000 Bitcoin from Mt. Gox, worth $56 billion at current rates.
- Kraken received 48,641 BTC (valued at over $3 billion) from the Mt. Gox Rehabilitation Trustee to distribute to creditors.
- Other exchanges involved in returning funds to Mt. Gox creditors include Bitstamp, SBI VC Trade, Bitbank, and Coincheck.
A decade-long cryptocurrency saga is approaching its final chapter as Kraken, a major crypto exchange, has initiated the distribution of Bitcoin and Bitcoin Cash to customers affected by the infamous Mt. Gox hack.
This development marks a significant milestone in the resolution of one of the most notorious incidents in cryptocurrency history.
Mt. Gox, once the dominant player in the crypto space handling over 70% of all Bitcoin transactions globally, filed for bankruptcy in February 2014 following a devastating hack.
The breach resulted in the theft of 850,000 Bitcoin, valued at an astounding $56 billion based on current market rates. This event sent shockwaves through the nascent cryptocurrency industry and left thousands of investors in limbo.
In the years following the hack, efforts to compensate affected users have been ongoing. A rehabilitation proposal approved in 2021 promised to reimburse about 90% of the assets owed to affected customers.
As part of this process, Kraken was selected by the Mt. Gox Trustee to facilitate the investigation and return of client funds.
On July 16, 2024, Kraken received 48,641 BTC, valued at over $3 billion, from the Mt. Gox Rehabilitation Trustee. This transfer was intended to be distributed to creditors within one to two weeks.
True to this timeline, Kraken announced on July 24 that it had “successfully distributed” Bitcoin and Bitcoin Cash to Mt. Gox customers.
“It’s been nearly a decade since Kraken was selected by the Trustee to facilitate the investigation and return of client funds. It was our privilege and it was our duty.”
Dave Ripley, CEO of Kraken, stated,
While the exact amount distributed by Kraken has not been disclosed, this event represents a significant step forward in the reimbursement process. Creditors are reportedly awaiting more than $7 billion worth of Bitcoin, Bitcoin Cash, and cash distributions from various entities involved in mediating the process.
Kraken is not alone in this endeavor. Four other cryptocurrency exchanges – Bitstamp, SBI VC Trade, Bitbank, and Coincheck – have also been tasked with returning funds to some of the 127,000 creditors affected by the 2014 collapse. The timing of distributions from these other exchanges remains unclear.
Recent blockchain data has shown significant movement of Mt. Gox-related funds. Blockchain analytics firm Arkham Intelligence reported that Mt. Gox had begun moving a total of $2.85 billion worth of Bitcoin to new wallets, with $340 million of that heading to four separate addresses owned by Bitstamp.
Despite these positive developments, it’s worth noting that the recovery process has been far from complete. Local Japanese law enforcement managed to retrieve just 140,000 of the 850,000 digital assets stolen to repay creditors. The Mt. Gox estate still holds approximately 85,234 BTC valued at $5.7 billion, according to Arkham.
As this long-standing case inches towards resolution, it serves as a reminder of the early challenges faced by the cryptocurrency industry and the ongoing efforts to address them. The distribution of funds to Mt. Gox creditors represents a significant step towards closure for many long-waiting investors in the cryptocurrency space.
