Mt Gox Releases Repayment Plan, Will Bulk Withdrawals Weaken Market?
Victims of the collapse of the Mt. Gox crypto exchange are closer to getting their funds back, according to the business’s bankruptcy trustee.
Creditors are being asked to register online and choose how they want to be repaid. Options include a cash payout, receiving bitcoin itself, or Bitcoin Cash.
If they opt for bitcoin, there is fear the price could dump further as an estimated 142,000 bitcoins hit the market.
“Some Mt. Gox creditors will get bitcoin. Some will sell them,” Aaron Brown, a crypto investor, told Bloomberg. “It won’t be a significant fraction of total bitcoin trading volume, but it might push prices down. The decline might spook some other people, and we might see a further drop.”
The Japanese exchange, once the world’s biggest, collapsed in 2014 after losing around 850,000 bitcoin.
Creditors received letter from Mt. Gox lawyer
Mt. Gox creditors were sent correspondence from attorney Nobuaki Kobayashi, the trustee in the rehabilitation process, who confirmed that he was “preparing to make repayments” to account holders.
“The deadline for the Choice and Registration will be set by the Rehabilitation Trustee with the permission of the Court,” the letter said.
It has been speculated that many creditors could choose to offload their bitcoin in the market for cash – directly or indirectly – because the trustee would supposedly liquidate an equivalent amount of bitcoin to pay out those wanting to receive fiat currency.
The missing bitcoin was valued at around $500 million in 2014, but the current market value at $21,400 per BTC for 850,000 coins comes to over $18 billion. Some of the lost holdings have been found over the years.
Mt. Gox was launched in 2009 by Ripple co-founder Jed McCaleb as an exchange platform for trading cryptocurrencies.
The platform quickly developed into the largest crypto exchange in the world, responsible for clearing 60% of the world’s bitcoin sales volume by 2013. But Mt. Gox went bust later in 2014.
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