Mt.Gox payouts: Redditors on what they are doing with their coins

How would those who waited nearly a decade treat their assets? Markets are still guessing how intense the selling pressure from potential Mt.Gox disposals will be. 

To probe the answer, ForkLog turned to one of the internet’s most muscular communities — Reddit. Creditor-redditors are sharing details of the process, recounting personal histories with the exchange and griping about repayment snags. 

Awaiting compensation 

Since July, the failed platform has begun distributing funds to creditors. Mt.Gox is expected to return a total of 142,000 BTC, 143,000 BCH and ¥69bn to clients by October 31, 2024.

According to Arkham, at the time of writing wallets linked to the exchange held 46,164 BTC worth $2.64bn. Over the past month, those addresses have executed series of transfers worth billions of dollars, including to Bitbank, Kraken, Bitstamp and SBI VC Trade.

In a statement on July 24, the exchange’s trustee said that payments had gone to more than 17,000 clients. So far, Mt.Gox has distributed about 41% of the funds.  

The scale of compensation has exceeded ETF inflows, miners’ issuance and sales by the German authorities. 

Analysts at JPMorgan suggested that the exchange’s asset sales could weigh on the market. Sam Callahan of Swan Bitcoin, however, considers such fears overstated. 

Glassnode noted that most Mt.Gox investors receiving payouts can be classed as HODLers. That could temper selling pressure in the coming weeks, the firm argues. 

The researchers declined to estimate what share of coins might be sold, noting that any such talk is mere speculation. But perhaps the clients themselves can offer a clearer answer. 

Surveys of creditors on Reddit

Users on the social platform in the Mt.Gox subreddit ran several polls, including on plans for returned BTC and BCH. 

Many Reddit creditors remain bullish and intend to hold. Based on data in a post by Avocados6881, most respondents plan to “HODL until they need to spend”. Fewer intend to sell a portion, liquidate everything or trade.  

Another poll by user northcasewhite showed similar results: most are “holding 100%”, while a minority are selling either partially or entirely. 

The bruising experience with a centralised platform pushed many creditors to self-custody. According to a post by Ed_5000, a significant share of users who received funds moved their assets to cold wallets.  

Community stories

Redditor Academic-Truck-6370 posted a screenshot of his 36 BTC (~$2.34m at the time of the post), which he received from Mt.Gox via Bitstamp. 

“I failed to get anything from Mt.Gox (roughly a few hundred thousand), but I’m glad it happened, because it taught me not to keep cryptocurrency on exchanges and just HODL,” another user said in the comments.

A community member going by Cytlan also shared a payout of 0.17 BTC (~$9,900) and 0.17 BCH (~$57).

3katinkires received 0.67 BTC and 0.67 BCH worth about $39,000. 

At the same time, some redditors complained about problems with verification, receiving funds and taxes. 

A Mt.Gox client from Germany with the handle No_Time_9111 said Kraken requires him to confirm his identity again, even though he did so “a long time ago”. 

“Since the beginning of June I have provided all the required documentation for manual verification, but now (after more than eight weeks) my account appears to be locked and, of course, last week I received a letter from the trustee stating that my account cannot receive a payout because it is not verified,” the user complained. 

In addition, creditors who use BitGo have still not received notifications about distribution timelines. At the same time, Mt.Gox has already notified them about transferring assets to the platform’s wallets. 

Redditor russian_concussion reported problems with confirmation on BitGo. In his case, support refers to the wrong corporate entity being selected.

“You selected BitGo Trust Company, Inc. in the settings, but you are a client of BitGo New York Trust Company LLC, not BitGo Trust Company, Inc. Therefore you need to select BitGo Trust Company, Inc again,” the email said. 

The user said he had changed the data repeatedly, but his verification still did not go through. 

Korbeille from France planned to consult a lawyer to learn about taxation of the compensation received. He wondered at what price to calculate the state’s share — at the rate at the time of the actual purchase or the current one.

“One argument in favour of the former: when someone steals €1000 from you and then returns it, you are not required to pay taxes on it, because it is not a real acquisition,” he reasons. 

User Dense_Spite3160 said he used to mine bitcoin on a laptop and had a Mt.Gox account with a small balance of the first cryptocurrency. He had not followed the industry since 2011–2013, but when he saw reports of payments, he tried to contact the trustee.  

He later found in an old email messages from people involved in litigation, but he was denied compensation:

“Mt.Gox claims that I waived my right by not responding [to the letter]. I find this insane, since a couple of messages mostly in Japanese do not seem like adequate notice.”  

The post drew a barrage of criticism in the comments. Many think the redditor should have responded in time. 

“No, this is not insane, and the rest of us handled [the reimbursement process] just fine. You screwed up and got nothing. Deal with it,” wrote one community member. 

Conclusion

More than 11,000 people subscribe to the Mt.Gox subreddit, and they discuss more than just compensation. Some are debating options to reinvest the coins they received, while others are discussing the possible return of Alexander Vinnik to Russia and a relaunch of BTC-e. 

Posts on Reddit do not fully reflect the mood of all creditors of the collapsed exchange, but it is clear many are long-time crypto users with an optimistic view of the industry. The market will not avoid selling, but these factors point to a possible easing of pressure.