Mt. Gox Transfers $9B in Bitcoin Amid Repayment Plans; Market Sinks

May 28, 2024

Wallets associated with the defunct Bitcoin exchange Mt. Gox transferred over 140,000 BTC, valued at approximately $9 billion, to an unknown address early Tuesday. This development is believed to be part of the exchange’s long-awaited plan to repay creditors by October 31.

But the substantial transfer has triggered market anxiety, resulting in a 1.4% decline in Bitcoin’s value, which fell to as low as $67,680 after peaking at over $70,000 on Monday.

Mt. Gox, once the largest Bitcoin exchange globally, collapsed in 2014 following a massive hack that led to the loss of hundreds of thousands of BTC. Since then, creditors have been anticipating repayment, a process that has faced numerous delays and legal hurdles. The recent movements of Bitcoin from Mt. Gox wallets signal possible progress toward fulfilling these obligations.

In a press release, rehabilitation trustee Nobuaki Kobayashi said that no sale of bitcoin or bitcoin cash (BCH) had taken place yet and that the group was “managing bitcoin and bitcoin cash in a secure manner.” Creditors have the option to receive their repayments either through a designated cryptocurrency exchange or via the sale proceeds of Bitcoin and Bitcoin Cash.

Despite reassurances from Kobayashi, the market reacted negatively to the large-scale transfers. The prospect of creditors potentially selling their received Bitcoin once repayments commence has contributed to selling pressure, influencing Bitcoin’s recent price drop.

Adding to the market’s unease, the Mt. Gox BTC has now been moved to three new wallets in the past hour, all receiving their first test transaction approximately four hours ago. Crypto analyst Capo of Crypto, commenting on X, emphasized that these transfers to a new wallet are preparatory steps and do not indicate immediate repayments. “The full repayment process extends until October 2024. So nothing to worry about (yet),” he stated, urging calm among market participants.

This event marks a critical phase in the long-drawn saga of Mt. Gox’s collapse and the subsequent efforts to compensate affected users. While the exact timeline and method of repayment remain to be fully detailed, the recent movements indicate progress. Market watchers will closely monitor further announcements and actions from the Mt. Gox rehabilitation trustee to gauge the potential impact on the cryptocurrency market.

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