- Mt. Gox has started repaying some of its creditors.
- The development comes after the defunct exchange moved billions in Bitcoin on Thursday.
- Speculators anticipate selling pressure on Bitcoin after the payments.
As announced by the defunct exchange’s rehabilitation trustee on Friday, Mt. Gox has pushed forward with reimbursing some of its creditors in Bitcoin (BTC) and Bitcoin Cash (BCH).
The development comes after the trustee announced last month that the exchange was gearing up to distribute over $9 billion in Bitcoin in June 2024; a decade after its unceremonious collapse following a hack that led to the theft of 740,000 BTC from the platform.
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The defunct exchange moved 47,229 BTC ($ about $2.71 billion) late Thursday in preparation for todayโs payouts.
Repayment to Eligible Creditors
In a notice on July 5th, Mt. Goxโs rehabilitation trustee confirmed the BTC and BCH repayments were sent to rehabilitators โthrough a part of the designated crypto exchangeโ per the recovery plan.
The trustee said the payments will be โpromptly madeโ to creditors once they fulfill several conditions. These include confirmation of the validity of registered accounts and verification that the repayments can be made safely and securely.
Other prerequisites for processing the repayments include โacceptance of the intention to subscribe to the Agency Receipt Agreementโ by designated exchanges, and completion of discussions between the trustee and the said crypto platforms.
Among the exchanges supporting Mt. Goxโs rehabilitation plan is Bitbank, which received 1,545 BTC ($85 million) on Thursday from a new wallet. The BTC came from the exchangeโs cold storage funded by 2,702 BTC ($154.7 million) from another new wallet linking to Mt. Gox, as shown through Arkham Intelligence data.
While this is good news to creditors, especially after years of a protracted bankruptcy process marred with legal challenges and delays, the crypto market could respond erratically to the additional Bitcoin supply.
Potential Selling Pressure on Bitcoin
Bitcoinโs price has fluctuated since Mt. Gox announced in June plans to start repaying creditors. James Butterfill, head of research at CoinShares, told CNBC the overhang of the billion in BTC set to be disbursed by the defunct crypto exchange has โlong been a concern for those with bullish views on bitcoin.โ
Creditors opting to be reimbursed in kind are likely to sell for profits given that BTC has gained over 10,000% in the last decade.
Assuming the creditors will rush to benefit from Bitcoinโs seismic gains, the crypto assetโs price could come under further pressure this month before a possible rebound from August onwards. BTC was trading at $54,256 at the time of writing after losing over 5% in the last 24 hours, CoinMarketCap data shows.
Stay updated on the price movement of Bitcoin in the last 24 hours:
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Read about the controversial Bitcoin โHODL Taxโ proposal:
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