Home / News / Crypto / Bitcoin / Mt. Gox Money Lands in Bank Accounts, But From Where? Exchange Wallet Stays Stagnant Despite Plans to Pay Back $9 Billion Worth of BTC
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Mt. Gox Money Lands in Bank Accounts, But From Where? Exchange Wallet Stays Stagnant Despite Plans to Pay Back $9 Billion Worth of BTC

Published April 24, 2024 9:47 AM
Teuta Franjkovic
Published April 24, 2024 9:47 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • Mt. Gox creditors are seeing updates on their claims nearly 10 years on from the exchange’s bankruptcy.
  • Money is flowing into Mt. Gox’s wallet from unknown sources as it sets to distribute $9 billion worth of Bitcoin to creditors.
  • A massive Bitcoin release could destabilize the market, by boosting the supply of BTC.

Some creditors of the Mt. Gox crypto exchange have reported  receiving updates about their claims. This suggests the officials responsible for liquidating the platform are intensifying efforts to distribute a $9 billion Bitcoin stash.

These updates provided details on the quantity of digital tokens to be returned and, in some instances, the dates of repayment.

Meanwhile, a significant BTC injection could, potentially, damage the price of Bitcoin.

Mt. Gox Creditors Buzzing: Bitcoin Repayments on Horizon?

Creditors have noted updates to their claims accounts with details on Bitcoin, Bitcoin Cash, and fiat repayments, hinting that cryptocurrency repayments may be imminent. Initial reports of these updates appeared in mid-April on the Mt. Gox insolvency subreddit , where users shared that amounts to being paid had been added to the repayment data table in their accounts.

Mt.Gox Insolvency
Credit: Mt.Gox Insolvency Hub

The latest updates have sparked varied responses from Mt. Gox creditors. While some remain skeptical, others are optimistic, speculating that repayments could begin sooner than anticipated, potentially finishing before the scheduled date of October 31.

A Mystery – New Funds Emerge, Raising Questions of Forgotten Wallets

Despite the public’s knowledge of the Mt. Gox wallets , it appears funds are being transferred into bank accounts from sources not directly linked to them. The specifics of these alternative sources still need to be clarified. As a result, this raises questions about whether these funds are coming from private or forgotten wallets.

Indeed, the scenario of discovering “forgotten” wallets isn’t new to Mt. Gox. In 2014, shortly after filing for bankruptcy protection, it reported  finding 200,000 Bitcoins in a forgotten wallet. This discovery was significant because the exchange had initially reported losing nearly all of the 850,000 BTC it held. These coins were worth about $500 million at contemporary prices.

Recently, Adam Back, a prominent figure from the early 2000s cypherpunk movement and a key influencer in the digital currency realm, spoke about the ongoing concerns regarding the exchange. Back highlighted the involvement of institutional claim buyers, who he believes are mainly interested in acquiring and holding Bitcoin at a discount. He said that, of the 200,000 BTC found by former Mt. Gox CEO Mark Karpeles, 142,000 BTC are still available. The remaining 56,000 BTC were used by bankruptcy lawyers over the course of ten years.

Mt. Gox Repayments Could Spook Crypto Market and Ignite the Sell-Off

The impending distribution of over $9 billion in Bitcoin from the Mt. Gox case could potentially unsettle the cryptocurrency market. This is according to analysts from K33 Research, Anders Helseth and Vetle Lunde. Helseth and Lunde suggested, in a market note dated April 23, the scheduled repayments could begin as soon as next month. This follows a similar pattern to fiat repayments made in March.

The analysts pointed out that while the release of 142,000 BTC and 143,000 BCH to Mt. Gox’s 127,000 creditors might not directly translate to selling pressure, the sheer volume of assets could still negatively impact market perceptions and Bitcoin prices. They described this scenario as a possible “overhang” that could “spook the market”.

This forecast is grounded in the fact that Mt. Gox’s creditors have been waiting nearly a decade since the exchange’s collapse. As a result, this created a backlog of pent-up demand to convert Bitcoin into more liquid forms of currency.

Mt. Gox Repayments on Track: Early Success Boosts Creditor Confidence

In terms of repayment progress, there have been notable developments, especially with bank account reimbursements. Reports from late December 2023 indicated the first rounds of Mt. Gox repayments were successful. Meanwhile, some creditors even received double what they expected. This raised expectations for subsequent payments and showed the mechanisms for returning funds to creditors was in operation.

Founded in 2010, Mt. Gox was once the most dominant Bitcoin exchange globally. It handled an estimated 70% of all Bitcoin transactions before its collapse.

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