After more than a decade, former customers of the Mt. Gox crypto exchange finally received their first refunds this summer, of around USD 6.5 billion. The bitcoin price suffered temporarily as a result of the repayments. However, the remaining 2.8 billion will not hit the market until next year.
This summer marked the end of a long era. For years, the bankruptcy trustee had plagued former customers with payment delays. It took a full decade for creditors to finally receive their long-lost bitcoins. Nearly 100,000 bitcoins ($6.5 billion) left the bankrupt exchange's accounts, leaving $2.8 billion worth of coins unaccounted for. The trustee is now extending the deadline for their payment by one year to 31 October 2025, according to an official statement.
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Rise and fall of the Mt. Gox crypto exchange
The Mt. Gox cryptocurrency exchange was once the leading crypto trading platform. Founded in 2010, it handled over 70% of all bitcoin trades at its peak. Its sudden insolvency in 2014 shocked the nascent crypto industry. An attacker stole around 750,000 BTC from customers and 100,000 BTC from its own reserves. The exchange managed to save about 140,000 BTC - now worth $9 billion. Investors with bitcoin balances had to file claims with the trustee after the closure.
Until recently, there have been no actual payouts in bitcoin. The value of the insolvent exchange's holdings continued to rise through the crypto cycles. But in July it finally happened: Mt. Gox transferred billions in bitcoin (BTC) to partner exchanges for the first time. These exchanges took care of customer verification (KYC) and payments. By now, all individual customers should have received their refunds. The remaining $2.8 billion is for institutional creditors and other customers who have not yet completed the necessary paperwork. However, no new bitcoins will be issued until autumn 2025.
Bitcoin price absorbs supply shock
Ahead of the actual payments, bitcoin traders quickly priced in billions of dollars of potential selling pressure. The largest cryptocurrency by market capitalisation plunged 27% from $68,000 to below $50,000 in a matter of days. However, actual sales by former customers had an unexpectedly small impact on the price. The market seemed to have overreacted significantly.
This dynamic wasn't entirely unexpected. Bitcoiners who were active before 2013 are familiar with bitcoin's value proposition. Accordingly, many of the former Mt. Gox customers decided that "HODLing" was the best option.
