More than a decade has passed since the collapse of once-dominant bitcoin exchange Mt. Gox. Customers are finally getting some of their holdings back - paid out in bitcoin (BTC). Contrary to market expectations, the repayments have not had a significant impact on the BTC price so far.
For former Mt. Gox customers, a long era is coming to an end. After years of delays, the bankruptcy trustee of the former exchange has finally made payments to customers. More than half of the first tranche has already been paid out by partner exchanges Kraken and Bitstamp. The Mt. Gox repayments did not seem to have a noticeable impact on the bitcoin price.
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Mt. Gox era over soon
The Mt. Gox cryptocurrency exchange was once the dominant platform for cryptocurrency trading. It was founded in 2010 as the first of its kind, and at its peak handled over 70% of bitcoin trades. Its sudden declaration of bankruptcy in 2014 sent shockwaves through the then-nascent crypto industry. The exchange reported that an attacker had stolen approximately 750,000 bitcoin (BTC) from its customers and 100,000 BTC from its own reserves. The exchange managed to salvage approximately 140,000 bitcoin (BTC) - currently worth $9.4 billion USD. Investors who had Bitcoin balances when Mt. Gox ceased operations had to file claims with the appointed trustee.
Until recently, no actual payments were made in bitcoin. As a result, the insolvent exchange's holdings continued to rise in value. But in July of this year, the wait was finally over. Mt. Gox transferred billions in bitcoin (BTC) to partner exchanges for customer identification (KYC) and payouts. The price of bitcoin dropped significantly but only temporarily. Last week, exchanges paid out $4 billion USD to former customers. The expected price pressure did not materialize at all.
Bitcoin BTC/USD (daily) / Chart: Tradingview
Distribution of remaining Mt. Gox bitcoin
Of the 140,000 bitcoins (worth $9.4 billion USD), approximately 80,000 (worth $5.4 billion USD) remain in the custody of the bankruptcy trustee. About 40,000 of these Bitcoins (worth $2.7 billion USD) are expected to be paid out later this year, according to analyses by Galaxy Research. The remaining bitcoin will be repaid by Mt. Gox at a later date. A significant portion is held by loan funds that bought claims on the coins from impatient creditors.
Distribution of Mt. Gox Bitcoin Claims / Source: Galaxy Research
