Highlights:
- Mt. Gox will start distributing $9 billion in Bitcoin and Bitcoin Cash from July 2024.
- Repayments follow a structured plan to ensure transparency and avoid complications.
- Bitcoin and Bitcoin Cash prices dropped following the announcement of the repayments.
Mt. Gox, the defunct Bitcoin exchange, will commence repayments to creditors in July 2024, marking the end of a decade-long wait. According to a notice from the Rehabilitation Trustee, Nobuaki Kobayashi, the repayments will be made in Bitcoin (BTC) and Bitcoin Cash (BCH) and sent to designated cryptocurrency exchanges.
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JUST IN: Bankrupt Mt. Gox will begin $9 billion #Bitcoin repayments in July 👀 pic.twitter.com/Rph2AupnTY
— Bitcoin Magazine (@BitcoinMagazine) June 24, 2024
Repayment Process and Trustee’s Assurance
The official announcement on June 24, 2024, stated that preparations for the repayments have been completed. Kobayashi assured creditors that he would diligently carry out the repayment process. Furthermore, he emphasized avoiding complications, including regulatory, technical, and security-related issues.
Kobayashi stated
We will commence the repayments in the order of the cryptocurrency exchanges, with which the Rehabilitation Trustee will complete the exchange and confirmation of the required information. Please wait for a while until the repayments are made
The structured repayment approach aims to ensure transparency and fairness. The process will depend on the cryptocurrency exchanges’ confirmation of the required information.
Mt Gox’s Background and Impact on the Market
Mt. Gox, once the largest bitcoin exchange globally, ceased operations on February 24, 2014, following a massive security breach that resulted in the loss of 850,000 bitcoins. In September 2023, the trustee announced that they would reimburse creditors with 142,000 bitcoin, 143,000 bitcoin cash, and fiat currency totaling 69 billion Japanese yen by October 2024.
In May 2024, Mt. Gox moved over 140,000 BTC, worth approximately $9 billion, from cold wallets. This was the first time in five years, likely in preparation for these repayments.
🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 14,057 #BTC (966,328,258 USD) transferred from #MtGox to unknown wallethttps://t.co/hOUcbOhbbg
— Whale Alert (@whale_alert) May 28, 2024
Anticipated Market Reactions
The repayments’ announcement has stirred the cryptocurrency community. The potential release of such a significant amount of BTC and BCH into the market has raised concerns about a possible supply shock. Creditors who have been waiting for over ten years might choose to sell their assets, which could temporarily depress the prices.
Despite these concerns, the crypto community is cautiously optimistic, awaiting further details of the repayment plans. Firstly, the upcoming payouts will occur through exchanges that partner with Mt. Gox. Moreover, this collaboration ensures a smooth and orderly distribution process.
As of this writing, the news has already impacted the market, with Bitcoin trading at $61,061, a 4% drop in the past 24 hours. Bitcoin Cash experienced a larger plunge of 9% within the same period, now priced at $350.
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