On the morning of May 28, a large amount of transfer suddenly appeared in the account address of Mt.Gox, an exchange that had been bankrupt for ten years. In the next 6 hours, Mt.Gox transferred 141,685 bitcoins in 10 transactions, with the amount of each transaction ranging from US$200 million to US$2.3 billion, with a value of approximately US$9.8 billion.

This is the first action of Mt. Gox's cold wallet address in five years. The transfer of 140,000 bitcoins worth nearly 10 billion US dollars has attracted great attention from the community. Compared with the total increase in the value of Bitcoin ETF today, which is 3,028, Wall Street ETF giants such as BlackRock and Grayscale each hold a total of about 20 billion US dollars in Bitcoin. The number of bitcoins transferred from the Mt. Gox address yesterday accounted for nearly half of the number of bitcoins held by BlackRock and Grayscale respectively.

This huge transfer indicates that one of the most important news in the history of encryption, the Mt.Gox theft and bankruptcy incident, is about to come to an end, and the 10-year compensation process is coming to the final step.

As early as January this year, dForce founder Mindao posted an email on Twitter that he had received as a creditor of Mt. Gox. In the email, Mt. Gox confirmed to the user the ownership of the exchange address account that had been entered as the BTC/BCH payment address, and stated that "140,000 bitcoins will be unlocked in the next two months to pay creditors." According to the latest balance sheet at the time, the exact number of bitcoins to be unlocked by Mt. Gox in the next two months will be 141,000.

After the incident aroused great concern in the community, BlockBeats interviewed Mindao about the transfer of 140,000 bitcoins from Mt. Gox. He said, "At the beginning of this year, creditors had already registered the payment addresses and would receive the tokens on exchanges such as Kraken. This (large transfer) should be that Mt. Gox is preparing for the distribution of bitcoins."

In the afternoon of the same day, Mt. Gox issued an announcement to answer community questions, stating that according to the restructuring plan, the restructuring trustee is preparing to repay the portion of claims that have been allocated cryptocurrency. Depending on the choice of the restructuring creditors, repayment can be made either through designated cryptocurrency exchanges, etc., receiving Bitcoin and Bitcoin Cash on behalf of the restructuring creditors, or through the proceeds from the sale of Bitcoin and Bitcoin Cash.

Currently, the Restoration Trustee has not yet begun to repay (transfer to exchanges or sell) these assets, and BTC and BCH are still in custody.

Will 140,000 Bitcoins Create a "Mentougou Pit"?

The first reaction of some community members to the "mine" that was finally put off for several years was panic.

A community member released the timing of Mt. Gox liquidation lawyer Nobuaki Kobayashi's previous sale of Bitcoin. He sold 35,800 Bitcoins through over-the-counter transactions between December 2017 and February 2018 to repay users' losses, and all of them were sold at high points at the time. Combined with the recent market's fatigue, many people believe that the market may have a downward trend as a result. This morning, Bitcoin fell after breaking through $70,000, and the decline has exceeded 3%.

Will the liquidation of 140,000 bitcoins really cause a significant sell-off? As for this event itself, the market believes that "there will be some impact, but it should not be too big."

In the repayment plan provided by Mt.Gox to creditors, the repayment amount includes "basic repayment" and "proportional repayment". The amount of the basic repayment is the same, and the proportional repayment can choose "mid-term repayment and final repayment" or "early lump sum repayment". Mt.Gox did not disclose the specific situation of the follow-up, which means that creditors will not receive all the compensation assets at once.

Mindao said, "Because most creditors have already sold their money to those funds, this part of the selling pressure has long been hedged. And people like us who have held on to the end will definitely not sell at this time."

Looking back over the past few years, the panic over Mt. Gox has become a "compulsory course for retail investors" and a "scare every year" for new investors. Since Mt. Gox was ordered to pay 140,000 bitcoins to creditors in 2019, the "Mt. Gox incident" has become a negative time bomb for several years, and the story of "the wolf is coming" has been staged repeatedly, stimulating market sentiment.

Although with the passage of Bitcoin ETF, institutions have gradually become the main force in the current cryptocurrency market, and the impact of 140,000 Bitcoins on the trading market will gradually decrease. Excluding the impact of large selling pressure, there are still voices that believe that the volatility caused by fear will be greater.

Crypto KOL Riyue Xiaochu said on Twitter, "Many people use Grayscale for comparison and think it will not have an impact on the market. I don't agree... If compensation is made, the market will definitely react... Panic often lasts for a while. The real situation is that the selling pressure is not as great as imagined, so it will be a good opportunity to buy the bottom in advance."

According to a previous announcement by Mt. Gox, the deadline for repayment of the 140,000 bitcoins is October 31, 2024.

Looking back at the "crypto-quake" 10 years ago

The Mt.Gox bankruptcy is one of the most famous events in the history of cryptocurrency. Mt.Gox was originally created in 2010 and accounted for more than 90% of Bitcoin transactions at its peak.

In 2011, Mt.Gox was hacked for the first time, resulting in the theft of thousands of bitcoins. In 2014, Mt.Gox suddenly announced that about 850,000 bitcoins (worth about $450 million at the time) were stolen from the platform, and then suspended all transactions and filed for bankruptcy protection. This incident caused an "earthquake" in the crypto market, and the price of Bitcoin fell from a peak of $951 that year to $309, a drop of 67%.

Since the declaration of bankruptcy and liquidation, Mt. Gox and its creditors have been in a stalemate for several years. In the following years, the price of Bitcoin continued to rise, reaching $19,000 in 2019.

In 2019, the Tokyo District Court ruled that Mt. Gox should recover 141,000 bitcoins and deliver them to a trust for safekeeping, and negotiate a vote among all creditors to choose a repayment plan. According to Mt. Gox's balance sheet in 2019, its debtors held approximately 142,000 BTC, 143,000 BCH, and 69 billion yen (about $510 million at the time).

However, the 140,000 bitcoins identified in 2019 had a maximum unit price of around $10,000 at the time. Two years later, the price of Bitcoin exceeded $60,000, which delayed Mt. Gox's compensation procedure again and again.