More than ten years after crypto exchange Mt. Gox filed for bankruptcy, customers are receiving some of the eight billion USD in bitcoin for the first time. In addition, Germany's Federal Criminal Police Office (BKA) is selling half a billion USD worth of confiscated bitcoin. The result: the largest crypto liquidation cascade since the FTX collapse.
For former Mt. Gox customers, this is the end of an era. They had to wait a decade for their bitcoin to be returned. After several delays, the trustee announced last week that the first payouts will be made in July. In fact, a Mt. Gox wallet moved $2.8 billion in Bitcoin this morning. The first payouts have been made. At the same time, the sale of Bitcoins by the German Federal Criminal Police is putting pressure on the price.
Mt. Gox makes repayments
The Mt. Gox crypto exchange was once the dominant trading platform for cryptocurrencies. Founded in 2010 as the first exchange, at one point over 70% of bitcoin volume was traded through Mt. Gox. Its sudden bankruptcy filing in 2014 deeply affected the then-fledgling crypto industry. Investors who had a Bitcoin balance at the time Mt. Gox ceased operations were able to file claims with the trustee. Approximately 140,000 bitcoin (BTC) - currently valued at $7.6 billion - have been recovered by the exchange. These bitcoins are now being repaid to creditors in several tranches.
So far, the trustee has sent 150 million USD to the Japanese crypto exchange Bitbank. In addition, the wallet transferred about 2.7 billion USD to an unknown address. It is unclear if this address belongs to an exchange. In an announcement, the Mt. Gox trustee only mentioned that the first repayments had been made. Nevertheless, the price of bitcoin reacted sharply to the transfers
BKA Bitcoin sales and largest liquidation cascade since FTX
In addition, the German Federal Criminal Police Office (BKA) also made transfers. In 2013, the BKA seized nearly 50,000 Bitcoins linked to the former operator of the movie piracy website Movie2K. A few weeks ago, those bitcoins were worth $3.5 billion. In recent weeks, the BKA has begun to sell some of these holdings for the first time. So far, 8,000 Bitcoins worth almost 500 million USD have hit the market.
Traders eventually priced in all of the billion-dollar selling pressure. This led to the largest liquidation cascade since the FTX crypto exchange collapse in December 2022. Over a billion USD of leveraged positions were forced to be sold. As a result, bitcoin fell below $53,600. Some altcoins are even at historic lows, last seen during the 2022 bear market.
