Former Mt. Gox CEO Says Bitcoin Payments Have Not Started

Former Mt. Gox CEO Says Bitcoin Payments Have Not Started

Mt. Gox has not begun to repay its creditors yet. This news comes as a relief to Bitcoin holders because they do not have to worry about an immediate market dump.

Mark Karpeles, the former CEO of the now-defunct crypto exchange, assured people that everything was fine.

The details

He took to X to reveal that the trustee was moving coins to another wallet to prepare for their distribution. The said distribution is expected to happen this year.

He added that there were no imminent bitcoin sales scheduled. The Japanese Bitcoin exchange had dominated Bitcoin’s trading volume in the early days of the cryptocurrency.

It was considered to have contributed about 70% of the trading volume. In February 2014, Mt. Gox suffered a fatal hack.

This saw it lose a total of 840,000 BTC tokens that had been valued at $460 million. A decade later, the exchange is still trying to pay off customers who had their money stuck at the exchange.

A Tokyo District Court also ruled in 2019 that the former CEO was guilty of making electronic records wrongfully that were connected to the exchange’s books.

The creditors

However, Karpeles managed to avoid going to prison. This is because he was not found guilty of breach of trust and embezzlement. Following his sentence, he kept a clean record for four years.

The bankruptcy estate has not been able to claim all the funds. However, they have managed to accumulate about 141,686 BTC tokens, along with 143,000 Bitcoin Cash tokens and 69 billion Japanese Yen.

These will be used to repay creditors. Since the time of the hack, the price of Bitcoin has appreciated significantly.

Therefore, creditors will receive a greater payout in USD terms than what they had in their accounts. This would undoubtedly be a boon for customers.

The impact

However, BTC investors have considered the Mt. Gox exchange as a ticking bomb for the price of BTC. The concern is that many creditors are likely to sell their holdings once they get them back.

This means the market would see an oversupply of BTC tokens and it would put an end to the ongoing bitcoin bull market.

The alarm sounded earlier this week when a wallet linked to Mt. Gox transferred BTC worth $9.6 billion to an unknown wallet.

It prompted rumors that creditor repayments had begun. Arkham Intelligence disclosed that the BTC holdings of the estate are now divided into three separate blockchain wallets.

Each of these wallets holds a total of 47,229 BTC tokens. Once Bitcoin redistribution does begin, researchers believe that holders do not need to worry.

James Check, a lead Glassnode analyst, said that few investors are likely to opt for profit-taking behavior once they get repaid.

This is because he said that they will consider the current price of Bitcoin as their new cost basis instead of the cost at which they acquired their tokens a decade earlier.

The repayment deadline for the exchange is October 31st, 2024.