Crypto Quill

Defunct bitcoin exchange Mt. Gox has announced that it will start distributing assets stolen from clients during a 2014 hack in July 2024, after years of postponed deadlines. The repayments will be made in bitcoin and bitcoin cash, potentially adding selling pressure to both markets.

Mt. Gox, once the world’s top crypto exchange, handled over 70% of all bitcoin transactions in its early years. However, in early 2014, hackers attacked the exchange, resulting in the loss of an estimated 740,000 bitcoin (worth $15 billion at current prices). After years of legal proceedings and delays, the exchange is now preparing to return these stolen assets to victims.

The Repayment Plan

Trustees have put together a repayment plan that has been in the works for several years. The Tokyo court set a deadline of October 2024 for the distribution. In May, Mt. Gox moved over 140,000 BTC (worth around $9 billion) from cold wallets to an unknown address in 13 transactions, marking the first on-chain wallet movements in five years.

Market Impact

Early investors who receive assets at a much higher value than their entries before 2013 may be inclined to sell at least a part of their holdings. As a result, this repayment process could add selling pressure to bitcoin markets.

Bitcoin prices dropped from over $62,300 in early Asian hours to under $62,100 in the minutes following the release of Mt. Gox’s statement.

The long-awaited repayment from Mt. Gox is a significant milestone for the crypto industry. As the exchange begins to distribute stolen assets, the impact on the market remains to be seen.