The rehabilitation trustee of the Mt. Gox exchange that went bankrupt in 2014, Nobuaki Kobayashi, has published a new letter today regarding refunds of recovered Bitcoin. In it, Kobayashi reports that the deadline for creditors to submit their payment information passed yesterday, April 6, 2023.
After several years of delays, the window opens for Bitcoin refunds, which are expected to be made by October 31, 2023. The letter also states that the rehabilitation trustee is making the necessary preparations for refunds.
This includes, but is not limited to, Kobayashi contacting banks, money transfer providers, and cryptocurrency exchanges and custodians to clarify payment arrangements:
(…) which include confirmation of selection and registration by rehabilitation creditors, as well as participating in discussions and sharing information with banks, funds transfer providers and cryptocurrency exchanges or custodians involved in the payment.
In light of this, the receiver also states that “it is expected to be some time before repayment begins.”
The base repayment, interim repayment, and early lump-sum repayment are currently scheduled for October 21, 2023, although the exact timing of repayment to individual redevelopment creditors has not yet been determined. Furthermore, Kobayashi notes that the deadline for the refund can be extended with the approval of the Tokyo District Court, if necessary.
Surprisingly, Luxembourg-based cryptocurrency exchange Bitstamp is one of four cryptocurrency exchanges selected by the Mt. Gox trustee to help with redemptions. Bitstamp has repeatedly posted guide in recent weeks about what creditors must do to file their claims.
How will it affect the price of Bitcoin?
Under the rehabilitation plan, the victims of the Mt. Gox hack will be reimbursed a total of 141,686 Bitcoin (BTC), around 143,000 Bitcoin Cash (BCH), and 69 billion yen. However, the amount of the refunds is still unclear. Creditors were able to choose whether to receive their claim in crypto or fiat until the deadline.
Additionally, the first 200,000 yen (about $1,520) of each creditor’s claim will be paid in yen, according to a moderator on the Mt. Gox bankruptcy subreddit. If the claim is larger, creditors can choose between cryptocurrency and cash, receiving 71% in cryptocurrency and 29% in cash after the first payment.
Therefore, the actual amount of Bitcoin that could actually put selling pressure on the market is difficult to predict. In particular, it should also be noted that the trustee is not dumping all of the Bitcoin on the market at once, but rather distributing it over the period up to the end of October.
The two largest creditors, Bitcoinica (a New Zealand-based cryptocurrency exchange) and Mt. Gox Investment Funds have chosen to pay their bankruptcy funds in Bitcoin. Estimates suggest that they represent 20% of all claims.
However, according to Bloomberg report, Mt. Gox Investment Fund has already stated that they will hold their BTC and not sell it. Furthermore, a Bitcoin price drop due to Mt. Gox payments seems quite unlikely at this point, as the market can digest low volumes despite historically low liquidity.
At press time, the BTC price was trading at $27,921.
Featured Image from Chainalysis Blog, Chart from TradingView.com
