Mt. Gox Starts Repayments, Transfers 47,229 BTC as Bitcoin drops 6.87%

Bitcoin price reacts with a massive 6.87% drop, as bankrupt exchange Mt. Gox starts creditor repayments, moving 47,229 BTC in a first transaction.

Mt. Gox, the infamous Bitcoin exchange that collapsed in 2014, has begun the process of repaying its creditors. This move has coincided with a sharp decline in Bitcoin prices, reflecting the market’s response to the long-awaited resolution of one of the industry’s most notable bankruptcies.

Bitcoin plummeted below $56,000, marking a 24-hour drop of 6.87% during this press. Ethereum also experienced a significant decline, falling below $3,000 with a 24-hour drop of 9.66%. 

This market turbulence has been exacerbated by a total liquidation of $576 million within the last 24 hours, with long positions accounting for a substantial $499 million of this liquidation.

Mt. Gox’s Creditor Repayment Process

Mt. Gox’s rehabilitation trustee, Nobuaki Kobayashi, announced on July 5, 2024, that repayments in Bitcoin and Bitcoin Cash had commenced to some creditors. 

God help us all pic.twitter.com/R4xeLvwpqj

— Autism Capital 🧩 (@AutismCapital) July 5, 2024

However, the full repayment process is contingent upon several conditions, including the confirmation of registered accounts and the completion of discussions with designated cryptocurrency exchanges.

Bitcoin Transfers and Market Impact

The announcement was accompanied by significant Bitcoin transfers. At 08:27 UTC+8, Mt. Gox moved 47,229 BTC, worth approximately $2.71 billion, to an unknown address.

Just In: According to Arkham, Mt. Gox has a large amount of movement. At 8:27 UTC+8, Mt. Gox: 1HeHLv…vHoV68 transferred 47.229k BTC to an unknown address: 1L7Xbx…5J6onk, worth $2.71 billion. https://t.co/WALPnCMjr2

— Wu Blockchain (@WuBlockchain) July 5, 2024

Additionally, 2,701.78 BTC (about $155 million) was transferred back to Mt. Gox’s address. Following these transfers, Mt. Gox’s address, 1JbezD…KLAPs6, moved 1,157.1 BTC ($63.57 million) to another new address at 12:19 UTC+8, and 1,544.67 BTC ($84.87 million) was sent to the Bitbank hot wallet via 1PKGGM…iszwzV.

Notably, in the past 24 hours, 236,365 traders were liquidated, with the total liquidations amounting to $685.23 million. The largest single liquidation order, valued at $18.48M, occurred on Binance.

Repayment Timeline and Market Expectations

Initially scheduled for October 2023, the final repayment deadline was extended to October 2024. This delay had led to increased speculation and uncertainty among creditors and market participants. 

The cryptocurrency market is bracing for the events of October 2024, with the Base Repayment, Early Lump-Sum Repayment, and Intermediate Repayment scheduled for that month.

The defunct exchange Mt. Gox had transferred a staggering amount of Bitcoin to the current cold wallet, totaling over 140,000 tokens valued at more than $9.5 billion in May. This massive transfer, which occurred in a series of quick succession, raised significant concerns of a dump.