142,000 bitcoins could be dumped as creditors consider Mt. Gox repayment

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The Mt. Gox rehabilitation trustee asked creditors to choose between bitcoin, cash or Bitcoin Cash to receive the refund, risking further pressure on the market.

  • Creditors could offload a total of nearly 142,000 bitcoins in an already tight market.
  • The rehabilitation trustee will prevent creditors from moving funds for a period of time.
  • Over 700,000 BTC were drained during the Mt. Gox implosion in 2014.

Victims of the Mt. Gox bitcoin exchange implosion can now choose between different ways to get their bitcoin back: bitcoin itself, cash, or Bitcoin Cash.

Users of the now-defunct exchange lost hundreds of thousands of bitcoins combined eight years ago. Now they could get compensation.

Even though the incident caused the loss of more than 700,000 BTC in 2014less than 150,000 coins are said to have been recovered and will be made available by the trustee for users to reduce some of their losses.

Optionality could make 141,686 bitcoins liquid again, depending on the choices of authorized users, posing a new threat of selling in an already battered market.

Mt. Gox Creditors Sent a correspondence dated July 6 by attorney Nobuaki Kobayashi, the administrator appointed as part of Mt. Gox’s rehabilitation process, who confirmed he was “preparing to issue refunds” to account holders.

In addition to the method of payment, creditors must also choose “whether or not to receive a lump sum prepayment,” the document notes. A repayment schedule has not been established.

“The deadline for election and registration will be set by the Rehabilitation Trustee with leave of the Court,” according to the correspondence.

Since the price of bitcoin was a fraction of the current market value of around $21,000, it was speculated in the community that many creditors might choose to offload their bitcoin on the market for cash – directly or indirectly. Indeed, although details were not shared, the administrator would supposedly liquidate an equivalent amount of bitcoins to pay those who wish to receive fiat currency.

However, the document cites that the rehabilitation trustee may set a period during which creditors could not move the funds received:

“The rehabilitation trustee may… set a period during which the assignment, transfer, succession, pledge or other disposition of rehabilitation claims is prohibited.

Following discussions with the Court and in accordance with the rehabilitation plan, the rehabilitation trustee plans to fix the assignment, etc. Restriction reference period from around the end of August this year until all or part of the refunds made under the initial refunds are made safely. and secure reimbursements.

If applications for rehabilitation are transferred during the Assignment, etc. Restriction Reference Period, the use of the System by assignors and assignees will be suspended, which may prevent you from making the Election and Registration, the Repayment Date may be significantly delayed compared to other creditors of the rehabilitation, or at worst, the refund amount can be deposited with the Tokyo Legal Affairs Bureau in accordance with laws and regulations.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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