The MtGox Exchange to Distribute $9 Billion in Bitcoin and Bitcoin Cash to Creditors
The cryptocurrency world was rocked today as Bitcoin fell below $60,000 for the first time since early May. This drop comes as the MtGox exchange announced plans to distribute approximately $9 billion worth of Bitcoin and $50 million of Bitcoin cash to its long-suffering creditors.
MtGox, once the largest spot Bitcoin exchange in the world, shut down in 2014 after a series of hacks that resulted in the loss of 950,000 Bitcoins. After declaring bankruptcy, approximately 140,000 Bitcoins were recovered, leaving thousands of creditors stranded. Nine years later, two Russian nationals were charged by the U.S. Department of Justice for conspiring to launder around 647,000 Bitcoins from the exchange.
Today, trustee Nobuaki Kobayashi announced that MtGox will begin distributing Bitcoin and Bitcoin cash to the cryptocurrency exchanges with which it agreed to distribute repayments, including Kraken, Bitstamp, and BitGo, next month. The market reacted swiftly to this news, with over $200 million in long positions liquidated within the last 12 hours.
While some believe this distribution could cause stress in the market, others see it as an opportunity to “buy the dip.” Alex Thorn, head of research at Galaxy Digital, believes the market is overestimating the impact, noting that many creditors are unlikely to sell all their tokens at once due to significant capital gains tax implications.
Despite concerns about a potential flood of tokens hitting the market, experts like Matt Hougan, chief investment officer of Bitwise, suggest that most early investors have already sold their claims in the secondary market. Bitcoin cash, on the other hand, is expected to face more challenges as it was created as a result of a blockchain split in 2017 and has significantly less liquidity than Bitcoin.
As the crypto community braces for these distributions, all eyes are on the market to see how it will react. Bitcoin is currently trading at $59,026, down 8.3% in the past 24 hours. Stay tuned for more updates on this developing story.