The recovery trustee of the Mt. Gox exchange, which went bankrupt in 2014, Nobuaki Kobayashi, today released a new letter regarding the paybacks of the recovered bitcoin. In it, Kobayashi states that the deadline for creditors to submit their repayment information was yesterday, April 6, 2023.
After a delay of several years, this opens the window for bitcoin redemptions, which are expected to take place by October 31, 2023. The letter also states that the restructuring trustee is currently making the necessary preparations for the repayments.
This includes, among other things, Kobayashi contacting banks, money transfer providers and cryptocurrency exchanges and custodians to clarify repayment modalities:
[…] This includes confirmation of the selection and registration by the rehabilitation creditors, as well as participating in discussions and sharing information with banks, money transfer providers and cryptocurrency exchanges or custodians involved in the repayment.
With that in mind, the trustee also states that it is “expected to take some time before repayment begins”.
The basic repayment, interim repayment and early capital repayment are currently scheduled for October 21, 2023, although the exact timing of the repayment to the individual restructuring creditors has not yet been determined. In addition, Kobayashi points out that the repayment period can be extended if necessary with the approval of the Tokyo District Court.
Notably, Luxembourg-based crypto exchange Bitstamp is one of four crypto exchanges selected by Mt. Gox’s trustee to help with paybacks. Bitstamp has repeatedly issued guidance over the past few weeks on what creditors should do to assert their claims.
How will it affect bitcoin price?
According to the rehabilitation plan, the victims of the Mt. Gox hack will be reimbursed a total of 141,686 bitcoin (BTC), about 143,000 bitcoin cash (BCH) and 69 billion yen. However, the amount of the refunds is not yet clear. Until the deadline, creditors could choose whether they wanted to receive their claim in cryptocurrencies or fiat.
Additionally, the first 200,000 yen (about $1,520) of each creditor’s claim will be paid in yen, according to a moderator of the Mt. Gox bankruptcy subreddit. If the claim is higher, creditors can choose between crypto and cash and get back 71% in crypto and 29% in cash after the first payment.
Therefore, the actual amount of Bitcoin that could actually cause selling pressure on the market is difficult to predict. It is also worth noting that the trustee does not put all the bitcoins on the market at once, but spread them out over the period up to the end of October.
The two largest creditors, Bitcoinica (a New Zealand crypto exchange) and the Mt. Gox Investment Funds have opted to cash out their bankruptcy funds in Bitcoin. It is estimated that they make up 20% of all claims.
However, according to a Bloomberg report, Mt. Gox Investment Fund has already stated that they will keep their BTC and not sell it. In addition, a bitcoin price crash due to the Mt. Gox payouts currently seems rather unlikely as the market can digest the low volumes despite historically low liquidity.
At press time, BTC price was trading at $27,921.
BTC price 1 hour chart | Source: BTCUSD on TradingView.com
Featured image from Chainalysis Blog, chart from TradingView.com
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.