Bitcoin
Crypto markets roar as Mt. Gox multi-billion dollar payments begin
The first payments have begun according to onchain data, although the timeline for when the coins will be distributed to investors is still unclear.
Defunct Bitcoin exchange Mt. Gox has been making waves in the market as businesses and individuals prepare to receive refunds nearly ten years after the platform went bankrupt.
The administration overseeing Mt. Gox’s payment plans will distribute a large amount of its 142,000 Bitcoins and Bitcoin Cash for users who lost funds when the platform was last hacked in July 2014. The current payments are intended for creditors who agreed to forfeit 10% of their stake in exchange for an upfront payment before the conclusion of civil litigation proceedings, with Coinshares recently estimating 75,000 coins will enter circulation.
News that Mt. Gox paid out 2014-era coins that were lost on its exchange has caused the cryptocurrency prices bleed to death.
Bitcoin has lost 20% of its value in the past month, now trading at $55,248. Meanwhile, Ethereum fell below the $3,000 mark, trading at $2,950 and also losing 20% in the last thirty days.
2014 era coins
Most analysts agree that the market-wide sell-off was triggered by the Mt. Gox payouts and the likelihood of tens of thousands of coins entering the market.
When the platform went down in July 2014, the price of Bitcoin was $600, meaning that at its current value, investors are looking at a potential profit of 10,000%.
Still, some are happy that the cryptocurrency market will be rid of this increasingly imminent threat.
“The return of Mt Gox coin is causing a stir today and could result in short-term BTC weakness, but in the long term it will be positive – the fear of Mt Gox coins coming to market has been an issue for so long that it is just another risk being taken away from BTC’s long-term success,” said Rennick Palley, founding partner at early-stage venture capital firm Stratos.
Eligible companies
Five companies are eligible beneficiaries of the Mt. Gox-era coins and are tasked with redistributing payments to individuals who lost money in the original bankruptcy: Bitstamp, Bitgo, Kraken, Bitbank and SBI VC Trade.
However, despite a June 24 notice from the trustee responsible for paying out the Mt. Gox funds that funds will begin flowing in early July, details about which companies are receiving the tokens first remain unclear; as does how those companies will distribute the crypto they receive.
On July 4th, PeckShield warned that an address linked to Mt. Gox had made a whopping 47,000 BTC ($2.7 billion) transfer to a new address, along with 1,544 BTC worth $84 million to the aforementioned Bitbank. A day later, Mt. Gox sent another 1,200 BTC or $64 million to a new address.
While Bitbank has not confirmed the payments, the payment details Arkham Intelligence indicates that the company has begun moving these funds within its wallets. A wallet associated with the Japanese company shows a large number of Bitcoin transfers over the weekend, ranging from less than 1 BTC to 90 BTC.
While concerns that recipients of the funds will sell these coins are weighing on the market, some analysts say not everyone will sell.
“While a large portion of the tokens that are redeemed will absolutely be sold, I expect savvy whales to keep their skin in the game before the next bull run,” said Phillip Alexeev, chief growth officer at CrossFi. He told The Defiant that investors have been able to live without these funds for many years and “unless they are absolutely desperate,” they can continue to wait until their returns are maximized.