MT. Gox Ready for Repayment With 44,527 BTC Transfer to an Internal Wallet

• Mt. Gox transfers 44,527 BTC, valued at $2.84 billion, to prepare for repaying customers who lost assets in the 2014 hack.
• The recent transfer caused Bitcoin prices to drop from $65,000 to roughly $62,786.93 due to market reactions.
• The phased repayment process by Mt. Gox aims to reduce market impact, with five firms handling BTC redistribution.

Mt. Gox has transferred 44,527 BTC, valued at approximately $2.84 billion, to an internal wallet. This action is considered a preparatory step for repaying customers who lost assets during the 2014 hack.

The firm, launched in 2010, was a Tokyo-based crypto exchange that ceased operations abruptly in 2014 after a devastating hack. The hack resulted in the loss of 850,000 BTC, valued at around $460 million at the time. The exchange’s insolvency left many customers without their funds.

Preparations for Repayment

On July 16, Mt. Gox began transferring BTC, signalling preparations to repay its creditors. Arkham Intelligence noted that a Mt. Gox-linked wallet moved 0.021 BTC to another address, which industry observer Colin Wu suggested could be a test transfer. Shortly after, a substantial transfer of 44,000 BTC, worth around $2.8 billion, was made to a Mt. Gox cold wallet address.

Currently, Mt. Gox holds 138,985 BTC, approximately $8.87 billion at current market prices. The recent transfer has caused noticeable market volatility. Bitcoin prices have dropped from about $65,000 to roughly $62,786.93 following the asset movement. This drop is linked to market reactions to the potential sale of a large amount of BTC from Mt. Gox customers.

Source: CoinMarketCap

Official Statement and Market Reactions

The Mt. Gox rehabilitation trustee issued a letter in July regarding repayments to creditors. Following the announcement, Bitcoin’s value decreased by 4.6%. The phased repayment process is expected to mitigate some of the selling pressure, but the market remains cautious.

Five companies; Bitgo, Kraken, Bitstamp, SBI VC Trade, and Bitbank are tasked with the redistribution of the BTC. A transfer was already made to Bitbank as part of this process. The reallocation of capital by Mt. Gox is a critical event for the crypto market, marking a step towards compensating victims of the 2014 hack.

Some market analysts believe that institutional investors might buy large amounts of BTC as the market rebounds. The phased repayment approach is expected to ease the market impact over time.