No, Mt. Gox has not yet started paying back its creditors and bitcoin holders need not fear an imminent market crash. That's according to Mark Karpeles, the former CEO of the closed exchange, who assured his followers on Tuesday that “everything is fine at Mt. Gox.”
“The Trustee is moving coins to a separate wallet in preparation for distribution later this year,” he tweeted. “No Bitcoin sales are imminent.”
Mt. Gox is a Japanese bitcoin exchange that reportedly accounted for 70% of bitcoin trading volume in the digital currency's early days. In February 2014, the exchange and company lost 840,000 BTC, worth $460 million at the time, in a devastating hack. Ten years later, the exchange is still working to repay customers who deposited their money with the exchange.
Incidentally, in 2019, the Tokyo District Court found Karpeles guilty of fraudulently creating electronic records related to Mt. Gox's books, but the court found him not guilty of embezzlement and breach of trust, and said he avoided prison time because he maintained his innocence for four years after the verdict.
While the bankruptcy estate was unable to recover all of the lost funds, it managed to raise over 141,686 BTC, 143,000 Bitcoin Cash tokens (BCH) and 69 billion yen (JPY) to repay creditors.
Because BTC has appreciated significantly in value since the time of the hack, creditors will receive payments in US dollars far greater than the amount originally in their accounts.
While a boon for customers, BTC investors have long viewed the Mt. Gox assets as a time bomb for the Bitcoin price. The current theory, and fear, is that many creditors will sell their Bitcoin once they get it back, which could flood the market with an excess supply of BTC and forestall the current Bitcoin bull run.
On Tuesday, blockchain investigators sounded the alarm after a Mt. Gox wallet transferred $9.6 billion worth of BTC to an unknown wallet, sparking rumors that a creditor redistribution had begun. According to Arkham Intelligence, the asset's BTC is currently stored in three separate blockchain wallets, each holding 47,229 BTC.
According to one researcher, once redistribution actually begins, bitcoin holders will have little to worry about.
Principal Analyst, Glassnode James Check He said creditors will likely consider bitcoin's current price of more than $68,000 as of writing to be their new cost, rather than the sub-$1,000 they bought it for a decade ago, so he predicted few investors would take profit-taking action after repayments.
“My view is still to be fully formed, but my intuition is that it will be the same level of signal as tracking whales or currency balances… maybe not so much.” Tweeted Check back on Tuesday.
Last year, Mt. Gox trustee Nobuaki Kobayashi published a letter setting the exchange’s repayment deadline as October 31, 2024.
Editor: Stacey Elliott.
