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The trustee for Mt. Gox, the Japanese bitcoin exchange that collapsed into bankruptcy a decade ago, on Friday said the company has begun to make payments in bitcoin and in bitcoin cash to some of its creditors.
The announcement added that repayments to other users of the hacked exchange would be “promptly made” if they meet certain conditions, including undergoing account verification, as well as subscribing to one of the designated digital asset exchanges through which the bankruptcy estate is facilitating disbursements in digital tokens.
“We ask eligible rehabilitation creditors to wait for a while,” continues the statement.
The price of bitcoin has plunged nearly 6% in the past 24 hours.
Customers of the Tokyo-based exchange have been waiting 10 years to get their money back.
What is Mt. Gox?
Once the world’s largest crypto trading venues, Mt. Gox filed for bankruptcy in February 2014 after a series of heists that saw up to 950,000 bitcoin — worth upward of $58 billion at today’s prices — vanish.
Mt. Gox blamed the bitcoin disappearance on a bug in the cryptocurrency’s framework. While users were receiving incomplete transaction messages when accessing the exchange, coins may have actually been illicitly moved by hackers out of their accounts, Mt. Gox said.
After declaring bankruptcy, 140,000 of the missing bitcoin were recovered, which means roughly $9 billion worth of bitcoin will be returned to owners, in today’s prices. Bitcoin was trading at roughly $600 at the time of the bankruptcy. Today, it is worth more than $54,000 — an almost 9,000% increase.
According to data from Arkham Intelligence, on Thursday and Friday, Mt. Gox moved billions of dollars in bitcoin from its crypto wallets ahead of the repayment memo.
More than 47,000 bitcoins worth $2.7 billion were moved out of an offline cryptocurrency wallet associated with Mt. Gox, Arkham Intelligence said Friday.
A portion of the funds, worth $84.9 million, was sent to Japanese crypto exchange Bitbank, which is listed among the platforms supporting repayments to Mt. Gox users, according to Arkham Intelligence. A further $63.6 million of bitcoin was sent to an unknown counterparty, which Arkham Intelligence said was “likely a listed repayments exchange.”
Mt. Gox wallets continue to hold 138,985 bitcoins, worth around $7.5 billion at current prices, according to Arkham Intelligence, meaning billions of dollars worth of the cryptocurrency are yet to be paid out.
How will this affect bitcoin?
Analysts previously told CNBC they expect the Mt. Gox repayment plan to lead to some heavy selling in bitcoin, although this is likely to be short-lived and precede further price gains later this year and in early 2025.
John Glover, chief investment officer of crypto lending firm Ledn, told CNBC the windfall for Mt. Gox users would likely translate to huge sales in bitcoin as investors look to lock in gains.
“Many will clearly cash out and enjoy the fact that having…
Read More: Mt. Gox begins repaying bitcoin to creditors a decade on from collapse