Fortress Investment Offering an Early But Discounted Payout to Mt. Gox Creditors
Instead of waiting another year and a half, the SoftBank Group-owned company offers a liquidity option for creditors now.
Fortress Investment Group LLC is offering the creditor of the now-defunct cryptocurrency exchange Mt. Gox an earlier payout. Since 2017, Fortress has been owned by SoftBank Group.
However, this will be a discounted payout to what the creditors would get under a trustee-backed proposal set for a vote in October. According to Bloomberg, this is the highest value that a private equity and hedge fund firm has ever offered creditors.
The Civil Rehabilitation plan from Mt. Gox’s trustee set for an October vote would refund credits about 90% of their claim value while Fortress is offering about 80%. Fortress is using a calculator constructed by Mt. Gox creditor Kim Nilsson to determine the payout value of a claim.
However, the rehabilitation plan payments are not likely to occur until mid-2022, unlike Fortress, which offers liquidity now.
While there is no certainty that creditors will approve the plan, Fortress figures investors don’t want to wait and may choose to cash out now; as such, they have been now sending out thousands of letters to Mt. Gox creators.
“Rather than waiting another 1 to 1.5 years, we are offering a liquidity option for creditors who want to receive cash or BTC now,” said Michael Hourigan, managing director at Fortress.
For years, Fortress has been buying up Mt. Gox claims, offering as little as $600 per BTC and as much as $1,300 per BTC. Bitcoin price, meanwhile, has risen to a record nearly $62k.
Japan-based Mt. Gox that was launched in 2010, was once the world’s biggest Bitcoin exchange, handling more than 70% of all BTC transactions worldwide in 2013. That is until it lost thousands of customers’ bitcoin in a hack.
Some of the holdings were found, and the trustee is working to reimburse creditors for years now as the process gets delayed by lawsuits.