Mt. Gox, once a leading cryptocurrency exchange, has reactivated its Bitcoin wallet and begun steps to repay its creditors.
Recent on-chain fund movements revealed that Mt. Gox conducted a test transaction to Bitstamp, one of the crypto exchanges designated for creditor repayments.
Blockchain intelligence firm Arkham Intelligence identified the test transaction in a July 22 post, noting that Mt. Gox’s address deposited $1 to four separate Bitstamp deposit addresses.
This transaction is likely a preparatory step for a larger repayment process. Bitstamp is one of five exchanges partnering with Mt. Gox Trustee to facilitate these payments. According to Arkham Intelligence, Mt. Gox currently holds Bitcoin worth $6.12 billion. Despite the recent small transfer of 0.021 BTC to Bitstamp, Mt. Gox still owes more than $9.4 billion in Bitcoin to around 127,000 creditors who have been waiting for over a decade to recover their funds.
The trustee began the repayment process earlier this month, with exchanges like Kraken, Bitstamp, and Bitbank set to distribute funds to their clients within 90 days of receipt.
Kraken confirmed last week that it received Bitcoin and Bitcoin Cash from Mt. Gox and would distribute the funds to customers within 7 to 14 days.
Potential Market Impact
Concerns have arisen among some crypto investors about the potential selling pressure from these repayments, which could put downward pressure on Bitcoin’s price.
According to Cointelegraph, financial analyst Jacob King suggested in a July 4 post that up to 99% of Mt. Gox creditors might soon sell their Bitcoin, leading to a gradual sell-off worth billions of dollars.
“There is no way to spin this into a bullish or offsetting news,” King said.
A different opinion was expressed by Galaxy’s Head of Research, Alex Thorn, who estimated that of the total 141,000 BTC to be paid out, only 65,000 BTC would actually enter the market.
“We think fewer coins will be distributed than people think, and that will result in less Bitcoin selling pressure than the market expects,” Thorn said in a June 24 post on X.
Thorn believes that individual creditors are more likely to hold onto their assets rather than sell them immediately.
Meanwhile, a Reddit poll showed differing sentiments among creditors, with 56% intending to hold their Bitcoin and only about 20% planning to sell.
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