Mt. Gox Repayment starting this quarter.
A popular crypto analyst is shining light on the possible impact of the upcoming Mt.Gox bankruptcy payments on the value of Bitcoin (BTC). The now-defunct Mt. Gox collapsed in 2014 after it was hit by an attacker who stole 850,000 Bitcoin worth about $500 million at the time.
“The Rehabilitation Trustee is currently preparing to make repayments in accordance with the approved rehabilitation plan of which confirmation order of the Tokyo District Court was made final and binding on November 16, 2021,” read the letter.
Creditors must register online and choose their preferred compensation method, including whether they would like to be compensated in USD, BTC, or BCH. Mr. Nobuaki Kobayashi, the court-appointed Rehabilitation Trustee also set out some rules, including the decision to set up a restriction reference period “from approximately the end of August this year until all or part of the repayments made as initial repayments is completed,” to ensure safe and secure repayments.
Following the latest correspondence, the repayments could begin in late August to enable full compensation before the year ends. Whereas this is a reprieve to Mt. Gox creditors, some crypto investors are now worried this could trigger a bloody sell-off for BTC worsening the already bleak situation. The Mt. Gox rehabilitation plan was approved in 2018 before being confirmed in October 2021. Out of the 850k BTC lost in the 2014 hack, the exchange stated that it had recovered 200k BTC. However, some BTC, including a 24,658 BTC stash in 2018, was sold, bringing the balance sheet stash to about 142,000 BTC ($3.3 billion).
Mt. Gox’s trustee announced in July that the defunct exchange was planning to soon make repayments to former customers in accordance with its bankruptcy rehabilitation plan, stoking fears that BTC could flood the crypto market. But the pseudonymous host of the YouTube show Coin Bureau says he doesn’t think the repayments will have a big impact on Bitcoin’s price.
“A lot of people are worrying that this could create a lot of sell pressure which would obviously drive crypto prices lower. Now, I personally don’t think this is too much of a problem, at least it’s certainly not anything that I’m particularly worried about.
And there a couple of reasons for this. Firstly, I’m pretty sure that a lot of that BTC was bought quite a while ago by institutions, whales, other high-net-worth investors, for probably pennies on the dollar from those Mt. Gox users. So, when that BTC does finally get unlocked, it will actually already have been bought by those other entities.” The analyst also believes the majority of the holders will choose to hold onto their BTC since Bitcoin is so far below its all-time high. He predicts the market will endure “a little bit of sell pressure,” but not a concerning amount.
