Collapsed cryptocurrency exchange Mt. Gox moved $9.62 billion worth of Bitcoin into a new wallet, raising hopes among creditors.
The 141,686 Bitcoin (BTC) was consolidated into wallet “1Jbez" from several other cold wallets associated with Mt. Gox.
These transfers are seen as a potential indication that users who have been unable to access their funds since 2014, when Mt. Gox suspended trading and withdrawals, might finally be repaid.
The transfers represent the first on-chain movement of funds from the exchange in over five years and seem in line with Mt. Gox’s plans to repay creditors by the end of October 2024.
The near $10 billion Bitcoin consolidation likely points to Mt. Gox’s plans to repay its users, according to Anndy Lian, intergovernmental blockchain expert and author of NFT: From Zero to Hero. Lian told Cointelegraph:
“This is the first movement of assets from Mt. Gox’s cold wallets in over five years and is likely part of the plan to distribute the assets back to creditors before the promised deadline of Oct. 31, 2024, in my humble opinion.”
Shortly after the reports, Mt. Gox rehabilitation trustee Nobuaki Kobayashi has confirmed that the consolidation is part of the exchange's plans to start repaying creditors, without mentioning when the repayments will start to occur. Kobayashi wrote in a May 28 announcement:
"The Rehabilitation Trustee is preparing to make repayment for the portion of cryptocurrency rehabilitation claims to which cryptocurrency is allocated... As the Rehabilitation Trustee is proceeding with the preparation for the above repayments, please wait for a while until the repayments are made.
However, the current deadline could face further delays, as it was set in September 2023 — a month before Mt. Gox was initially scheduled to repay the exchange’s creditors by Oct. 31, 2023.
Over $9.4 billion worth of Bitcoin is owed to some of Mt. Gox’s 127,000 creditors who have waited to get it back for over 10 years after the exchange collapsed in 2014 after multiple unnoticed hacks.
Mt. Gox was one of the earliest cryptocurrency exchanges, once facilitating more than 70% of all trades made within the blockchain ecosystem.
Following a major hack in 2011, the site collapsed in 2014; the fallout affected about 24,000 creditors and resulted in the loss of 850,000 BTC.
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Markets are pricing in a Mt. Gox repayment
Following the first batch of Mt. Gox transfers, Bitcoin price dipped 2% on May 28, to a daily low below $67,500, before recovering to just above $68,000, according to CoinMarketCap.
The BTC dip could be a sign of markets pricing in a potential repayment by Mt. Gox, according to Lian:
“The market has reacted to these movements with a slight bearish sentiment, as Bitcoin’s price dropped around 2.1% to as low as $67,505 after the transfer. This could be due to expectations of selling pressure from the creditors once they receive their repayments.”
Despite the slight price dip, Lian said that a potential repayment would resolve one of the most pressing, long-standing issues of the crypto industry.