Today an important news has been released regarding the Bitcoin of Mt.Gox.

According to data from Arkham Intelligence, there have been several movements of BTC from the wallets of the Japanese exchange that went bankrupt in 2014. 

Mt. Gox transferred 42.587k BTC to the unmarked address: 18vjnB…HDct9b at 14:49 UTC+8 today, worth about $2.7 billion. https://t.co/1KlP2XxJ3C

— Wu Blockchain (@WuBlockchain) July 16, 2024

The Bitcoin of Mt.Gox: latest news

On the known public addresses of Mt.Gox there are almost 142,000 BTC. 

A small part of these have already been officially returned to some creditors, but the majority, as it appears, is still there.

Mt.Gox has not said anything official regarding today’s movements, so much so that from the Arkham Intelligence page dedicated to monitoring its known public addresses, they would appear to be only internal movements.

Of the 142,000 BTC that were still on the Mt.Gox wallets at the beginning of the month, there are now less than 139,000. Therefore, the amount already distributed to creditors for now is minimal. 

However, in the last 12 hours, there have been three large movements, all with amounts ranging between 44,500 and 48,600 BTC. 

So in total in the last 12 hours practically all the BTC still in their possession have been moved on the Mt.Gox wallets. 

According to data from Arkham Intelligence, none of these have been distributed to creditors or sold, because they would only be internal movements from one address to another. 

The bankruptcy procedure

It should not be forgotten that the actual control of those BTC is held by the bankruptcy trustee Nobuaki Kobayashi. 

Mt.Gox at the beginning of 2014 was the main Bitcoin exchange in the world, and when it was forced to close it owned more than 850,000 BTC. Due to a theft caused by a hack, in February of the same year the company lost 750,000 BTC belonging to its users, and about 100,000 BTC of its own. 

At that point, she was forced to declare bankruptcy, and the bankruptcy procedure began. 

Subsequently, he managed to find about 200,000 BTC in an old wallet that had not been hacked, and thus began the partial refund procedure of Bitcoin to his former users. 

However, this procedure has very long timelines and is actually managed by the bankruptcy trustee together with the Japanese judge who is following the case. 

In theory, the refund procedure should be completed by October 31 of this year. 

The refund

It should proceed in two phases. 

During the first phase, some BTC are sold to collect fiat to be returned to those creditors who have opted for the refund in fiat. This phase should have already started, as the BTC in the possession of the company have decreased lately.

According to data from Arkham Intelligence, on the known public addresses of Mt.Gox in 2014 there were 162,000 BTC, after the closure due to bankruptcy and the discovery of 200,000 BTC on the old wallet. In April 2018, they had risen to 166,000, while the following month they dropped from 162,000 to 142,000. It is therefore assumed that a part was sold then to cash in fiat currencies. 

It is not clear, however, if the bankruptcy trustee will have to sell more BTC to be able to make refunds in fiat. This is because, assuming a sale in May 2018 at an average price of $8,500, then they could have collected more than 200 million dollars.

Once the fiat reimbursement phase is completed, the remaining BTC will be returned to those creditors who have requested to receive the reimbursement in Bitcoin, and not in fiat currency. Given that, in fact, those who will receive the reimbursement in BTC will collect a higher amount, for the same credit, compared to those who opted for payment in fiat, it is possible to imagine that many have chosen payment in Bitcoin. 

The consequences on the price of BTC

Today, upon the release of the news about the shift, the price of Bitcoin dropped. 

During the night it had risen to about $65,000, but once it reached that ceiling it marked a sort of reverse bounce. 

At first, it only dropped to $64,500. However, with the spread of news about Mt.Gox refunds, it dropped further, first below $64,000, and then even below $63,000.

However, it is not a crash, but just a return to the values it had before last night’s rise towards $65,000.

However, when the bulk of the distribution of BTC to creditors truly begins, it is possible that the price will experience another drop. 

It should be noted, however, that Mt.Gox will not sell the BTC, but will return them to creditors who can then decide whether to sell them or not. Those who haven’t seen those BTC for more than 10 years might also decide to keep them, for example, for another 10 years, given that during that time they have appreciated significantly. One BTC in February 2014 was worth less than $1,000. 

The timing

Given that a small portion of the refunds have already been made, and since probably a good part of the refunds in fiat have been disbursed, the hypothesis is that the refund of the remaining 139,000 BTC could start soon. 

There is time until October 31, but everything seems to be ready already. 

To tell the truth, however, over the course of these 10 years, there have already been so many delays that it is not even unlikely that there could be more. 

Furthermore, it is not absolutely certain that the creditors who, after receiving the BTC, decide to sell them will do so immediately. Therefore, it is possible that the timing will be somewhat extended. If not even very extended in the case where the BTC are received during a bull period during which those who receive them might be more inclined to hold onto them.

It is worth noting that in recent weeks the government authorities of Germany have sold about 50,000 BTC in just under four weeks. Furthermore, the price of Bitcoin has dropped from $64,000 to less than $54,000. However, only to bounce back in recent days to practically return to $64,000.