Mt. Gox, the failed cryptocurrency exchange that declared bankruptcy in 2014, is set to begin repaying its creditors in July. The refund process, which has been in the works for years, will see $9.2 billion worth of Bitcoin returned to those who held it since the exchange’s collapse.
The Improvement Trustee overseeing the refund process has assured that they have devoted significant time to ensuring a safe and reliable refund process. This includes technical solutions for secure refunds, compliance with financial regulations in each country, and discussions with cryptocurrency exchanges regarding refund arrangements.
Having started operating in Japan in 2010, Mt. Gox was one of the first crypto exchanges and at one time processed around 70% of all Bitcoin transactions. The collapse of the exchange a decade ago left creditors with $9.2 billion worth of Bitcoin in limbo.
More than 140,000 Bitcoins could potentially flood the market before Gox’s October 31 deadline for refunds. The exact timing and pace of the release of these funds remains unclear at this time.
The impending release of such a large amount of Bitcoin has caused some concerns in the market, leading to a decline in the price of Bitcoin. However, Brian Dixon, CEO of Off The Chain Capital, the crypto hedge fund that purchased Gox receivables, has stated that his firm will be “very systematic” about selling the Bitcoin it receives.
Dixon also mentioned that Mt. Gox’s position accounts for almost a fifth of its fund and they will start looking at other opportunities to buy different crypto assets at a discount, which will help them outperform Bitcoin.
Brad Howell, managing director of crypto market maker Keyrock UK, believes that the market could easily absorb the selling pressure from Mt. Gox and that its impact will be heavily influenced by sentiment rather than actual market dynamics. He also suggested that those with holdings in Mt. Gox are likely to hold onto their Bitcoin rather than sell.
It is important to note that this article does not provide investment advice.
