The much-awaited Mt. Gox repayment process has begun, with the defunct exchange’s bankruptcy estate moving 47,282 bitcoins, with 140,000 pledged to satisfy creditors. That transaction signals the start of this process, and Mt. Gox’s creditors can witness the assets reaching their wallets in the following days at best. Some may receive it 60-90 days from now, although that timeline is believed to be the worst-case scenario.
This repayment process was confirmed last month by Mt. Gox through a press release, in which its trustee Nobuaki Kobayashi mentioned, “The repayments will be made from the beginning of July 2024.” He also stated, “We have taken time to ensure safe and reliable repayment to creditors, including technical remedies for safe repayments, compliance with financial regulations in each country, and discussion of repayment arrangements with the cryptocurrency exchanges.”
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Mt. Gox will move funds to various exchanges, including well-known entities Bitbank, Bitstamp, Kraken, BitGo, and a Japanese counterpart, SBI VC Trade. These exchanges will process individual transfers to Mt. Gox creditors who filed for their repayments. Depending on the exchanges’ internal policies, the timeline will vary, as some exchanges will look to send the funds sooner and others with delays.
The exchange announcing that it would fulfill its debts led to increased selling pressure on bitcoin, as whales began liquidating their assets, knowing the largest cryptocurrency’s value would drop. Resultingly, bitcoin could not make meaningful gains for most of last month. As July rolled in, bitcoin’s price began dipping from the month’s second day in anticipation of the repayments.
July 5 saw bitcoin dropping below $54,000, a price point it has not touched in multiple months. As Mt. Gox-related assets reach their creditors, the market may dip in ways more drastic. Creditors are expected to sell significant portions of their repayments as soon as they receive them, increasing selling pressure tremendously.
Image by Steve Buissinne from Pixabay
