Mt.Gox Trustee Will Repay 150,000 BTC Lost by Users in 2014 When 1 BTC was $320

Mark Karpeles, the former CEO of defunct cryptocurrency exchange Mt. Gox, has revealed that the exchange’s Japanese trustee could soon distribute the remaining 150,000 BTC held by the company to its creditors.

Given that the Bitcoin price has skyrocketed since 2014 when the exchange was hacked, creditors may be able to realize much more value than they lost during the bankruptcy. There is a possibility this could impact Bitcoin’s price negatively, with some analysts claiming the drop could be up to 80-90%.

Mt. Gox—What Happened to the Largest Bitcoin Exchange in 2014?

Launched in 2010, Mt. Gox was a Tokyo-based cryptocurrency exchange. The platform handled over 70% of all Bitcoin transactions worldwide between 2013 and 2014, becoming the largest Bitcoin intermediary and the world’s leading Bitcoin exchange. 

However, in February 2014, the exchange suspended trading with a short note saying that it would “close all transactions for the time being in order to protect the site and our users.” Subsequently, CEO Karpeles stated that around 850,000 BTC has been lost, adding that the exchange would file for bankruptcy protection from creditors.

At the time, the amount of lost Bitcoin, which accounted for around 7% of the circulating Bitcoin, was valued at more than $450 million. However, the exchange trimmed losses after finding around 200,000 in an old digital wallet. “MtGox had certain old-format wallets which were used in the past and which, MtGox thought, no longer held any bitcoins,” Karpeles said in a filing.

Nobuaki Kobayashi, the trustee of Mt. Gox, started selling the exchange’s trove of Bitcoin to reimburse affected users. In a report, the exchange’s trustee detailed that sales took place between the creditors’ meeting in September 2017 and March 2018. In the final round of sell-offs, Kobayashi sold 24,658 BTC and 25,331 BCH for $230 million. In total, the trustee has sold around 50,000 BTC so far.

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150,000 BTC, 0.8% of the Current Supply, Would be Distributed to Mt.Gox’s Creditors

In a recent interview with Forkast News, Karpeles revealed that the exchange’s remaining trove of Bitcoin, now worth over $6 billion, is slated to be distributed to creditors. The trove, which consists of around 150,000 BTC, represents almost 0.8% of the total BTC circulating supply and could have a conspicuous effect on markets if liquidated. 

While creditors are likely to be paid in the form of BTC, they might not have enough incentive to HODL their Bitcoin. In fact, given that they will have the chance to realize more gains than they lost during the bankruptcy, they might rush to liquidate their crypto to register those profits. 

It is also worth noting that the exchange’s trustee is known as the ‘Tokyo Whale’, a title it received after carrying out multiple rounds of cryptocurrency sell-offs in 2017 and 2018. At the time, Kobayashi was even accused of causing a dip in crypto markets, an allegation that it has denied. 

In the event of a sell-off, Bitcoin, which has been struggling to gather momentum for an impressive move, could lose all its recent gains. However, it remains to be seen whether investors manage to absorb the sell-off, or would it create another FUD for crypto. Additionally, the crypto market has shown to mature and could very likely absorb the selling pressure without a major effect on the price.

Meanwhile, at the time of writing, the flagship cryptocurrency is trading at a three-month high of over $47,200, up by more than 6% over the past 24 hours.

Do you think Mt.Gox’s creditors would retain or sell their BTC refunds? Let us know in the comments below.