150,000 BTC Could Flood The Market As Mt Gox creditors Set To Receive Repayment

Table of Contents

• The Mt Gox Fiasco 
• Potential Market Impact 
• Won’t Be Able To Move Funds 
• A Boost For Bitcoin 

The specter of Mt. Gox returned to haunt the markets, with the prospect of 150,000 BTC flooding the market as the attorney appointed as the Trustee in the Mt. Gox rehabilitation process all but confirmed that he was preparing to begin making repayments to account holders of the doomed exchange. 

The Mt Gox Fiasco 

The Mt. Gox implosion was the biggest test faced by the crypto space back in 2014 when the cryptocurrency exchange imploded, and users lost hundreds and thousands of BTC. The incident saw the loss of over 800,000 BTC. The rehabilitation process saw only 150,000 BTC recovered and made available to account holders. The development comes as some sort of compensation for the users, helping them cut some of their losses. 

Potential Market Impact 

While the reimbursement has been a long time coming, there are now concerns that it could have a negative impact on an already stressed market. In 2014, 1 BTC was only a fraction of the asset’s current price, leading to genuine fears that recipients could immediately sell large amounts of Bitcoin as soon as they receive it, leading to significant pressure on prices. 

The attorney appointed as the Trustee to oversee the rehabilitation process, Nobuaki Kobayashi, has not given an official timeline around when the repayments are scheduled to begin. 

“The Rehabilitation Trustee is currently preparing to make repayments (‘Repayments’) in accordance with the approved rehabilitation plan of which confirmation order of the Tokyo District Court (the “Court”) was made final and binding on November 16, 2021 (the “Rehabilitation Plan”).”

The plan saw approval in 2018 and was confirmed in 2021. Out of the over 800,000 BTC lost during the collapse of Mt. Gox, only 150,000 have been recovered and will be distributed back to account holders. Reacting to the reports, the CEO of on-chain analytics platform CryptoQuant advised traders to “set alarm bells for when the payouts begin.” Another Twitter user included the Mt. Gox repayment as the top “black swan” event that could impact BTC. 

Other events that the user included on the list were Tether collapse, Total market crash, Invasion of Taiwan, Escalation of the Ukraine war, and Satoshi still being alive and moving BTC from the genesis wallet. 

Won’t Be Able To Move Funds 

However, there could be efforts to mitigate the potential impact. According to the document, the Trustee could impose a period where creditors receiving BTC would not be able to move the funds. 

“The Rehabilitation Trustee may…set a period during which the assignment, transfer, succession, provision as collateral, or disposition by other means of rehabilitation claims are prohibited.”

According to sources, after discussions with the court and in accordance with the rehabilitation plan, the Trustee would put the Restriction Reference Period from the end of August of the current year until all or part of the repayments are completed. 

A Boost For Bitcoin 

The news of the payouts did not have any impact on the price of BTC. However, news that crypto lending platform Celsius had repaid its loan to Maker sent the asset's price past $21,000. Celsius, coming under intense criticism for pausing all user withdrawals over the past month thanks to liquidity pressures, was able to fully pay off a loan on the Maker protocol, freeing up $440 million of Collateral on Thursday. Maker is one of the largest decentralized finance platforms in the crypto space. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.