Mt. Gox Trustee to Start Bitcoin and Bitcoin Cash Repayments in July: Long-Awaited Compensation Finally Approaching
After a long decade of waiting, users of Mt. Gox, once the world’s largest cryptocurrency exchange, finally have a ray of hope. According to the latest news, the trustee plans to begin repaying Bitcoin (BTC) and Bitcoin Cash (BCH) to victimized users in July this year.
Mt. Gox Collapse: A Major Event in the Crypto Market
Mt. Gox, one of the earliest cryptocurrency exchanges, once handled more than 70% of the world's Bitcoin transactions. However, a series of security breaches and hacker attacks in early 2014 led to the loss of about 850,000 Bitcoins (worth about $519 million at the time), becoming one of the most serious security incidents in the history of cryptocurrency.
After this catastrophic event, the price of Bitcoin fell sharply from its high in February 2014, falling to as low as $420. Although the market gradually recovered, the collapse of Mt. Gox had a profound impact on Bitcoin and the entire cryptocurrency market.
Compensation progress and delays
Although the trustee of Mt. Gox announced that compensation will begin in July, there is still uncertainty about the compensation process. The original compensation deadline was October 31, 2023, but the latest repayment deadline may be postponed to September 2023, which means that the compensation process may be more complicated and time-consuming than expected.
Market reaction and future outlook
The impact of this compensation on the market cannot be underestimated. As large amounts of Bitcoin and Bitcoin Cash enter the market, it may trigger some degree of price volatility. However, considering that the current price of Bitcoin is over $61,100, compared to the low of $420 in February 2014, the market’s overall affordability has increased significantly.
Mt.Gox incident review: single-handedly crashing the bull market
If you know anything about the history of cryptocurrency, then Mt. Gox is definitely a well-known name. It was once the most infamous accident in the history of Bitcoin and also marked the end of the bull run in 2013.
Mt.Gox is headquartered in Tokyo, Japan, and was founded by Jed McCaleb in 2010. It was later acquired by French developer and Bitcoin enthusiast Mark Karpeles in 2011 and focused on Bitcoin trading platforms. At that time, Bitcoin was in its early stages and trading platforms on the market were very scarce, and Mt.Gox quickly stood out with its scale and reliability.
By 2013, the price of Bitcoin had soared from $13 to $1,100, setting an unprecedented bull market. Mt. Gox quickly became the world's largest Bitcoin trading platform, with its market share once reaching 70% of the total Bitcoin transactions.
However, this powerful exchange suddenly announced on February 7, 2014 that it would stop all Bitcoin withdrawals. Initially, the platform claimed that this was to rectify the funding process, but users did not pay much attention. But 17 days later, Mt.Gox not only suspended all transactions, but even the website could not be opened. This abnormal behavior quickly caused panic in the market.
A leaked internal document revealed the truth: Mt.Gox was hacked and 744,408 customer bitcoins and an additional 100,000 bitcoins owned by the company were stolen, totaling about 840,000 bitcoins, worth about $450 million. In fact, as early as 2011, Mt.Gox had suffered multiple hacker thefts, and had previously lost up to 80,000 bitcoins. However, due to the rapid rise in the price of Bitcoin, the company was able to cover up these losses, and this three-year theft eventually put the company in trouble.
On February 28, Mt.Gox filed for bankruptcy in Japan and two weeks later filed for bankruptcy protection in the United States. This incident severely shocked the crypto market, and the price of Bitcoin plummeted from $951 to $309, a direct drop of two-thirds, which once again triggered a crisis of trust in the market, and many users began the difficult road of rights protection.
Karpeles, then CEO of Mt.Gox, was charged with fraud and embezzlement in early 2015. Before going to prison, he admitted to finding 200,000 missing bitcoins and storing them in cold wallets. However, subsequent tracking found that these bitcoins had been evenly distributed to the wallets of 100 people.
As of 2019, Mt.Gox recovered a total of 141,000 bitcoins. The court ordered that this huge amount of money be delivered to the trust manager Nobuaki Kobayashi, who would then coordinate the distribution among creditors.
In 2022, Mt.Gox announced that its Bitcoin compensation procedure had been accepted by the court and disclosed the specific distribution method.
Despite the twists and turns, the long-standing compensation has finally come to an end. This is good news, but the market has reacted with panic.
For those familiar with the history of cryptocurrency, Mt.Gox is a household name that once caused a major disaster in the history of Bitcoin and is also considered to be the terminator of the 2013 bull market.
Mt.Gox is headquartered in Tokyo, Japan. It was originally founded by Jed McCaleb in 2010 and later acquired by French developer and Bitcoin enthusiast Mark Karpeles in 2011. It became a trading platform focused on Bitcoin. At that time, Bitcoin was in its infancy and there was a lack of formal and large-scale trading platforms in the market, so Mt.Gox rose rapidly.
By 2013, the price of Bitcoin had soared from $13 to $1,100 per coin, setting an unprecedented bull market. Mt. Gox quickly became the world's largest Bitcoin trading platform, once occupying 70% of the market share.
However, on February 7, 2014, Mt.Gox suddenly announced that it would stop all Bitcoin withdrawals. Initially, the platform claimed that this was to rectify the funding process, but users did not pay much attention. However, 17 days later, Mt.Gox not only suspended all transactions, but even the website could not be opened. This sudden abnormal behavior quickly caused panic in the market.
The leak of an internal document revealed the truth: Mt.Gox was hacked and 744,408 customer bitcoins and an additional 100,000 bitcoins owned by the company were stolen, totaling about 840,000 bitcoins, worth about $450 million at the time. In fact, as early as 2011, Mt.Gox had suffered multiple hacker thefts and had even lost up to 80,000 bitcoins before. However, due to the rapid rise in the price of Bitcoin, the company was able to temporarily cover up these losses, and this three-year-long theft eventually led to the company's collapse.
On February 28, Mt.Gox filed for bankruptcy in Japan and two weeks later filed for bankruptcy protection in the United States. This incident severely shocked the crypto market, and the price of Bitcoin plummeted from $951 to $309, a direct drop of two-thirds, which once again triggered a crisis of trust in the market, and many users began the difficult road of rights protection.
Karpeles, then CEO of Mt. Gox, was charged with fraud and embezzlement in early 2015. Before going to prison, he admitted to finding 200,000 missing bitcoins and storing them in cold wallets. However, subsequent investigations found that these bitcoins had been evenly distributed among the wallets of 100 people.
As of 2019, Mt.Gox had recovered a total of 141,000 bitcoins. The court ordered that this huge amount of money be delivered to the trust administrator Nobuaki Kobayashi, who would then coordinate the distribution to creditors.
In 2022, Mt.Gox announced that its Bitcoin compensation procedure had been accepted by the court and disclosed the specific distribution method.
Despite the lengthy compensation process, this should have been good news, but the market reacted with panic.
The rise of cryptocurrencies in the political push and pull: US regulation and market outlook
Cryptocurrency has become a dark horse in the current political arena. Well-known investor Cathie Wood made it clear in an interview that the Ethereum ETF was approved because cryptocurrency has become part of the election agenda. At the same time, the U.S. Deputy Secretary of the Treasury made a rare statement on mixers, calling for greater transparency and seeking a balance between privacy and national security, rather than simply banning mixers.
Currently, all market institutions are paying attention to the approval progress of the FIT21 bill. If passed, this would mean a further liberalization of the U.S.’s regulatory approach to cryptocurrencies. As long as no issuer or related party controls more than 20% of cryptocurrencies, they will be treated as commodities, thus lifting SEC securities restrictions. This move will usher in a new era in the encryption field. New York Stock Exchange President Lynn Martin said at the Consensus Conference that the New York Stock Exchange would consider opening cryptocurrency trading if regulations are clearer. If this development comes to fruition, the barrier to purchase of cryptocurrencies will be significantly lowered.
However, SEC Chairman Gary Gensler has complained about this and publicly pointed out that there are major problems with the bill. However, the reality is that even tough regulators find it difficult to influence the situation. Although according to existing information, the term of office of independent agency appointees is fixed and not controlled by a single president, the term of office of the SEC Chairman is likely to last until February 2025. But from the current situation, no matter which party is in power, deregulation in the United States has become an inevitable fact.
Market Reaction and Long-term Outlook How will the cryptocurrency market respond to these political and regulatory changes? As policies become more clear and open, cryptocurrencies may see an influx of more institutional and retail investors, which will drive the market to further develop and mature. Investors' sensitivity to policy changes and changes in market expectations will also play a key role in future cryptocurrency price trends.
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