News

Mt. Gox Creditors Choose Option to Avoid Bitcoin Selloff

• Two of Mt. Gox’s largest creditors have chosen an early payment option to avoid selling off their Bitcoin holdings.
• The two creditors account for 21% of all 141,686 BTC to be refunded by the exchange.
• Creditors have until March 10th to decide whether to accept the lump sum or wait for a potentially larger payout in the future.

Mt. Gox Refund

Mt. Gox, the now-defunct crypto exchange that fell to an 850,000 bitcoin (BTC) hack in 2014, has announced a rehabilitation plan that would see 141,686 Bitcoin (BTC), 142,846 Bitcoin Cash (BCH), and 69 billion Japanese yen returned to creditors and investors in the crypto exchange. Concerns about a potential dump of 141,686 BTC (approximately $3.4 billion at $24,000 per BTC) into the market were raised due to its effect on the price of BTC.

Creditors‘ Option

The two largest creditors – Bitcoinica and MtGox Investment Funds (MGIF) – accounting for 21% of all claims have decided on an early lump sum payment option that would prevent them from having to sell off their Bitcoin holdings as part of their refund process. Other creditors who decline this method can wait until civil rehabilitation litigation concludes before receiving a potentially larger payout in fiat currency at an unspecified time in the future. They must decide by March 10th 2023 which option they want to take advantage of.

Price Impact

An influx of this amount of Bitcoin into the market could force prices lower as with most markets due to its sheer volume being injected into circulation at once. This decision has quelled these fears as it will not require any selloff for reimbursement payments on behalf of these two large creditors who account for one-fifth (21%) of all Mt. Gox claims.

Analysis

A legal analysis by a Japanese law firm indicated that holdouts could wait many years for their money if they choose not take advantage of this early lump sum payment option offered by MtGox’s estate while they await resolution in civil rehabilitation litigation including CoinLab’s lawsuit against them..

Conclusion

Though relief was felt with this decision, analysts have expressed concern over how much control these large holders may eventually possess over pricing should more institutions join them on taking advantage of early payouts instead opting out entirely or waiting indefinitely for later returns when court proceedings conclude later down the line after so many years since it was first announced back in 2021