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Wednesday, May 6

Mt. Gox Creditors to Receive Bitcoin Repayments ‘Shortly’

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By on Crypto News
Mt. Gox Creditors to Receive Bitcoin Repayments ‘Shortly’

  • The Mt Gox trustee says that the exchange intends to start paying off its creditors before the year ends in what could be one of the biggest events in Bitcoin in recent years.
  • With billions of dollars in BTC set to flood the market, it could be yet another headwind for the top crypto as it battles the effect of the news about Binance’s SEC settlement.

It’s been almost a decade since Mt Gox was hacked and over 800,000 BTC stolen back in 2014. Its users have been waiting to get refunded for what feels like an eternity, but the long-awaited day might finally be here. The exchange’s trustee says they will start getting refunded before the year ends in a move that could deal a big blow to the price of Bitcoin.

In an email to creditors, trustee Nobuaki Kobayashi told creditors in an email earlier today that they would start to receive their cash repayments shortly, without specifying the dates.

In the email, Kobayashi revealed that he is making efforts “to commence repayments in cash within the 2023 calendar year.”

He added:

However, due to the large number of rehabilitation creditors who will receive repayment, the varying types of repayment, the different preparation and processing times required to make the repayment, repayments will continue into 2024.

All the complexities mean that the specific timing of repayment to individuals is undetermined at this point, the trustee added in his letter.

Creditors are not required to take any action. All they have to do is await the commencement of the process. However, in the future, Kobayashi might request additional details as he distributes the funds.

Will the Mt Gox Repayments Affect Bitcoin?

The significance of the Mt Gox repayments can’t be overstated. The exchange went down by over 800,000 BTC back in 2014. And while it hasn’t been able to recover all of it, it holds about 142,000 BTC and a similar number in other Bitcoin forks, including Bitcoin Cash. The BTC alone would be worth $5.2 billion, with the BCH worth $31 million.

Additionally, Kobayashi revealed that he had redeemed 7 billion yen ($47 million) from the trust assets for the repayment.

142,000 BTC flooding the market would be likely to saturate the supply and suppress the price. However, a lot of the concerns have been exaggerated. For one, Kobayashi won’t repay everyone at once. As indicated in previous communications, the creditors would receive their repayments over quite a few months and as such, the 142,000 BTC wouldn’t hit the market at the same time.

Moreover, not everyone who receives their BTC will seek to dump it immediately. Mt Gox users are people who believed in Bitcoin before it was mainstream and invested in the crypto when all mainstream sources labeled it a fad and a scam. They are most likely to continue holding their BTC as they await the mainstream adoption they envisioned a decade before most people.

And even if all else fails, the BTC market can handle $5.2 billion. In the past day alone, the top crypto recorded $28.6 billion in trading volume. In the last month, the daily trading volume has shot up to as high as $39 billion.

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