After a decade since its bankruptcy, Mt. Gox, the once-dominant Japanese Bitcoin exchange, has commenced the long-awaited process of reimbursing creditors with Bitcoin and Bitcoin Cash, CNBC reported.
The Tokyo-based exchange collapsed in 2014, following massive Bitcoin thefts. This left users with losses amounting to billions, and a portion of its missing funds was only recovered over the years.
The trustee overseeing Mt. Gox's bankruptcy estate announced that payments have begun for some creditors, assuring that others will follow once specific conditions are met. The requirements include account verification and adherence to designated digital asset exchanges facilitating the disbursements.
How much is Mt. Gox paying back?
Of the approximately 950,000 lost Bitcoins, 140,000 have been reclaimed, translating to about $9 billion at current prices. Bitcoin's value has skyrocketed since Mt. Gox's demise, climbing from around $600 during the bankruptcy to over $54,000 today.
Leading up to the repayment announcement, movements of Bitcoin from Mt. Gox's wallets were observed, totaling billions of dollars. An $84.9 million was transferred to Japanese exchange Bitbank, designated as a platform supporting the repayment process, while additional funds were directed to undisclosed counterparts likely involved in similar arrangements.
However, despite these initial distributions, Mt. Gox still holds approximately 138,985 Bitcoins worth roughly $7.5 billion.
The Effects of Mt. Gox on Bitcoin
Financial analysts anticipate that the Mt. Gox repayment initiative could trigger a temporary downturn in Bitcoin prices as creditors potentially sell off their recovered assets to capitalize on their sudden gains.
While the total Bitcoin owed to Mt. Gox creditors represents a fraction of the cryptocurrency currently in circulation, analysts suggest that the impact on overall market dynamics, although notable, is manageable.
A previous report from VCPost suggests that Bitcoin has been facing a decline since the presidential debate.
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