Mt. Gox, the once-dominant cryptocurrency exchange, has started repaying its customers, concluding nearly ten years of waiting. The company, which managed over 70% of all Bitcoin transactions in its early years, collapsed in 2014 after a hack led to the loss of an estimated 740,000 bitcoins. Last month, the defunct exchange announced it would begin repayments in July.
Impact on Bitcoin Market
The repayment announcement has added pressure on Bitcoin and the broader cryptocurrency market. After the news, Bitcoin’s price fell to $53,600, marking a five-month low. This decline resulted in the liquidation of over $580 million in bullish bets. Despite starting the week close to $63,000, Bitcoin remained under $55,000 by mid-morning in Europe.
Willy Chuang, COO of crypto exchange WOO X, commented on the situation: “Mt. Gox moved 47,228 BTC, signaling the start of their repayment process, which has caused some market fear due to the large potential sell-off. However, it’s worth noting that despite these concerns, the long-term impact may be less severe as the market gradually absorbs the selling pressure.”
Also Read: Bitcoin Dips Below $58,000 Amid Broader Crypto Market Sell-Off
Repayment Process and Timelines
While some customers may receive their payouts within 60 to 90 days, Mark Karpeles, the former CEO of Mt. Gox, indicated that these are worst-case scenarios. He explained on X, “Those are deadlines linked to the number of transfers to process. Each exchange might have a slightly different internal policy and decide to credit everyone later than sooner or sooner than later.”
Exchanges approved by the trustee to handle the repayments include Bitbank, BitGo, Bitstamp, Kraken, and SBI VC Trade, a Japanese exchange.
The long-awaited repayments mark a significant moment in cryptocurrency history, offering some closure to those affected by the 2014 hack. While the immediate market reaction has been volatile, experts like Chuang believe the market will eventually stabilize as it adjusts to the influx of repaid bitcoins.
The return of funds to Mt. Gox customers is a major event in the crypto world, but it may not have as severe a long-term impact as some fear. As the market absorbs the selling pressure, the overall stability of Bitcoin and other cryptocurrencies is expected to improve, offering a more optimistic outlook for the future.
