Mt. Gox Creditor’s BTC Payout Can “Completely Crash The Market”
Mt. Gox, the cryptocurrency exchange which went defunct post its hack in 2014, still continues to impact the price movements in the cryptocurrency exchange. In one of the biggest hacks, Mt. Got lost 850,000 BTC tokens worth $460 million then, and nearly $5.5 billion now.
However, the Mt. Gox crypto exchange later said that it has managed to get hands over 200,000 BTC tokens. In June 2018, the Tokyo court ruled that creditors of the defunct cryptocurrency exchange shall be paid in BTC tokens and not fiat. This gave a big relief to the creditors considering that the BTC price has gained significantly since 2014.
The court has concluded over the bankruptcy and the defunct exchange is now moved into civil rehabilitations. As per the official documents concerning the legal proceedings, victims of the Mt. Gox hack can claim over 170,000 BTC and BCH tokens. This means that billions-of-dollars’ worth BTC tokens will be infused again in the cryptocurrency market.
To take care of the entire rehabilitation process, the court has appointed Nobuaki Kobayashi as the trustee of the exchange. The trustee has also released online and offline tools to guide the claimants through the process of filing their claims. Users are required to submit all the legal documents supporting their claims.
To be noted, the last month’s release of the claim filing system was valid only for non-corporate and individual users. Last week, the exchange announced that it has released an “online rehabilitation claim filing system (…) for corporate users who filed their proofs of bankruptcy claim by using the MTGOX online bankruptcy filing system.”
It means that creditors can now file their claims through the same earlier mentioned process. The creditors have been given a deadline till 22nd October next month, to complete the claim filing process.
Note that the payment will not be immediate in this case. All the rehabilitations requests will be submitted to the court by February 14, 2019. Post this, the court will decide on the distribution of above mentioned liquid assets (BTC and BCH tokens), among the qualified claimants.
In a word with The Telegraph, a former Mt. Gox trader Kim Nilsson, who “spearheaded the investigation into the exchange’s bankruptcy,” claimed that the lack of demand to buy BTC from the exchange could “completely crash the market.”
Nilsson said that any individual or group who tries to liquidate Mt. Gox’s holdings with payouts in fiats, would lead the market to crash. Since there is not enough demand for 170,000 BTC or BCH tokens, the sudden liquidation would put pressure on the order books, creating a huge downfall across multiple digital assets in the market.
Nilsson further added that while some might want to immediately sell-off, others would also prefer to HODL their BTC holdings. He said: “It’s possible some people would try to instantly sell the Bitcoins as soon as they receive them, but it would probably be less than 100pc of the people doing it,” he said.
“These Bitcoins were forcibly held for a number of years but it turns out that they ended up being an investment that had a great appreciation for people. I’m sure some creditors will be quite joyful to get Bitcoins back because it’ll just be free money,” he added.