Defunct cryptocurrency exchange Mt. Gox has announced that it will start distributing assets stolen from clients during a 2014 hack starting in the first week of July.
What Happened: Following the announcement of the repayments, Bitcoin prices dropped from over $62,300 to about $60,500 in early Asian trading hours, according to CoinGecko data. At the time of writing, Bitcoin BTC/USD is trading around $61,500.
This long-awaited repayment comes after years of postponements.
In a statement posted on the Mt. Gox website, trustee Nobuaki Kobayashi confirmed, “The Rehabilitation Trustee has been preparing to make repayments in Bitcoin and Bitcoin Cash under the Rehabilitation Plan. The repayments will be made from the beginning of July 2024.”
Kobayashi added that due diligence and specific safety measures are required before the payments are processed.
Market analysts believe these repayments could create selling pressure on Bitcoin.
Many early investors who receive their assets at significantly higher current values than their original investments before 2013 may be inclined to sell part of their holdings.
Mt. Gox was once the leading crypto exchange, managing over 70% of all Bitcoin transactions during its peak years. However, in early 2014, the exchange suffered a massive hack, losing approximately 740,000 Bitcoin (valued at $15 billion at today’s prices).
This incident was the largest among several attacks on the exchange between 2010 and 2013.
Trustees have been working on a repayment plan for several years, with a deadline set for October 2024 by a Tokyo court.
In May, Mt. Gox made headlines by moving over 140,000 BTC, valued at around $9 billion, from cold wallets to an unknown address in 13 transactions, marking the first on-chain wallet movements in five years.
Why It Matters: Twitter reactions to the news were swift.
Mechanism Capital‘s Andrew Kang said, “With Mt. Gox, German coins, ETF selling on the horizon, I do not believe that support levels and ranges will hold. These moves typically result in a multi-billion dollar cascade.”
He also noted the current market environment is reminiscent of May 2021, suggesting a potential for significant corrections.
Crypto trader DonAlt added, “Gonna be interesting to see how price reacts to the Mt. Gox announcement. Bulls need to show significant strength to reverse this slow bleed. If they can’t, the bottom of the range may just fall out.”
As the digital asset landscape continues to evolve, discussions on regulatory changes, technological advancements, and market dynamics will be central themes at Benzinga’s Future of Digital Assets event on Nov. 19.
This event will provide a platform for industry leaders to explore the future of digital assets amidst ongoing developments such as the Mt. Gox repayments.
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