Collapsed cryptocurrency exchange Mt. Gox recently transferred $9.62 billion worth of Bitcoin into a new wallet, raising hopes among creditors who have been waiting for repayment since 2014.
Significant Movement After Years of Silence
This transfer marks the first significant on-chain movement from Mt. Gox-related wallets in over five years. The 141,686 Bitcoin were consolidated into wallet “1Jbez” from several other cold wallets associated with Mt. Gox. These actions suggest that users who have been unable to access their funds since Mt. Gox suspended trading and withdrawals might finally see repayment.
Aligning with Repayment Plans
The transfers seem to align with Mt. Gox’s plans to repay creditors by the end of October 2024. Anndy Lian, an intergovernmental blockchain expert and author of NFT: From Zero to Hero, commented on the movement, stating, “This is the first movement of assets from Mt. Gox’s cold wallets in over five years and is likely part of the plan to distribute the assets back to creditors before the promised deadline of Oct. 31, 2024.”
Shortly after reports of the transfer, Mt. Gox rehabilitation trustee Nobuaki Kobayashi confirmed that the consolidation is part of the exchange’s plans to start repaying creditors. However, he did not specify when the repayments would commence. In a May 28 announcement, Kobayashi stated:
“The Rehabilitation Trustee is preparing to make repayment for the portion of cryptocurrency rehabilitation claims to which cryptocurrency is allocated… As the Rehabilitation Trustee is proceeding with the preparation for the above repayments, please wait for a while until the repayments are made.”
Also Read: Mt. Gox Bitcoin Release: A Looming Threat to Market Stability?
Potential for Delays
Despite these movements, there is potential for further delays. The current deadline was set in September 2023, a month before Mt. Gox was initially scheduled to repay creditors by October 31, 2023. Over $9.4 billion worth of Bitcoin is owed to some of Mt. Gox’s 127,000 creditors who have waited over 10 years for repayment after the exchange collapsed in 2014 following multiple unnoticed hacks.
Impact on the Market
Mt. Gox was one of the earliest cryptocurrency exchanges, once facilitating more than 70% of all trades within the blockchain ecosystem. The exchange collapsed in 2014 after a major hack in 2011, affecting about 24,000 creditors and resulting in the loss of 850,000 BTC.
Following the first batch of Mt. Gox transfers, the price of Bitcoin dipped 2% on May 28, reaching a daily low below $67,500 before recovering to just above $68,000, according to CoinMarketCap. This dip could be a sign of markets pricing in a potential repayment by Mt. Gox. Anndy Lian noted, “The market has reacted to these movements with a slight bearish sentiment, as Bitcoin’s price dropped around 2.1% to as low as $67,505 after the transfer. This could be due to expectations of selling pressure from the creditors once they receive their repayments.”
Resolving Long-Standing Issues
Despite the slight price dip, a potential repayment would resolve one of the most pressing, long-standing issues in the crypto industry. Creditors who have been waiting for nearly a decade might finally see a resolution to their financial losses.
