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No, Mt. Gox hasn’t begun repaying its creditors yet, and Bitcoin holders do not need to fear an imminent market dump. That’s according to the defunct exchange’s former CEO Mark Karpelès, who assured followers on Tuesday that “everything is fine with Mt. Gox.”
“The trustee is moving coins to a different wallet in preparation of the distribution that will likely happen this year,” he tweeted. “There is no imminent sale of bitcoins happening.”
Mt. Gox was a Japanese Bitcoin exchange said to have dominated 70% of Bitcoin trading volume in the digital currency’s early days. In February 2014, the exchange and company together lost 840,000 BTC in a fatal hack, worth $460 million at the time. Now, ten years later, the exchange is still working to pay back its customers who left money at the exchange.
And for what it’s worth, in 2019 a Tokyo District Court ruled that Karpeles was guilty of wrongfully making electronic records connected to Mt. Gox’s books. But it found he was not guilty of embezzlement and breach of trust and after having kept a clean record for the 4 years following his sentence, has managed to avoid going to prison.
While unable to reclaim all of the lost funds, the bankruptcy estate has gathered over 141,686 BTC to repay creditors, alongside 143,000 Bitcoin Cash tokens (BCH) and 69 billion Japanese Yen (JPY).
Since BTC has appreciated substantially since the time of the hack, creditors will receive a much higher payout in USD terms than what they initially had in their accounts.
While a boon for customers, BTC investors have long viewed the Mt. Gox estate as a ticking bomb for Bitcoin’s price. The going theory—and fear—is that many creditors will sell their coins once they get them back. That could flood the market with an oversupply of BTC and, nip the current Bitcoin bull market in the bud.
Blockchain sleuths sounded the alarm on Tuesday as a wallet belonging to Mt. Gox sent $9.6 billion worth of BTC to an unknown wallet, prompting rumors that creditor redistributions had begun. According to Arkham Intelligence, the estate’s BTC now sits in three separate blockchain wallets holding 47,229 BTC each.
Once redistributions actually begin, Bitcoin holders likely have little to worry about according to one researcher.
Glassnode lead analyst James Check said creditors are likely to view Bitcoin’s current price—north of $68,000 at the time of writing—as their new cost basis rather than the sub $1,000 price at which they acquired their coins one decade ago. As such, he predicts that very few investors will exhibit profit-taking behavior once they’re repaid.
“Whilst I have not completely established my view, my gut feel is it will have the same level of signal to tracking whales and exchange balances… not much,” tweeted Check on Tuesday.
Last year, Mt. Gox trustee Nobuaki Kobayashi published a letter establishing the exchange’s repayment deadline as October 31, 2024.
Edited by Stacy Elliott.
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