Payouts may “completely crash the market”: warns Mt. Gox trader
The infamous Bitcoin exchange Mt. Gox, which handled nearly 70% of all BTC transactions in 2014 shortly before filing for bankruptcy protection, is currently in the middle of a massive payout. Mt. Gox was the victim of a heist orchestrated by Russian hackers, who stole 800,000 BTC, worth $450 million at the time.
Nobuaki Kobayashi, the trustee of the legal process, has developed an online portal to facilitate the payout by advising claimants on the process of issuing the said claims. Initially, the portal’s payouts could only be availed by individual traders. Exchange-related traders, who were associated with certain corporations, had to wait for an announcement to make the claims.
As per the aforementioned announcement, if the creditors were associated with a retail or corporate enterprise, they would have to wait until October 22 to file their claims, following which the online tool and the claiming process will be shut. The now-defunct exchange will distribute 160,000 BTC at its current value.
Post the October 22 deadline, all claim-related requests will have the be settled in Japanese court by February 14 next year. Upon securing the judicial approval, the remaining liquid assets present with Mt. Gox, such as the provisions of Bitcoin [BTC] and Bitcoin Cash [BCH] held, will be disseminated among the claimants.
This is no doubt a positive development following years of back-and-forth legal and bureaucratic proceedings with the crypto exchange. But some feel that a payout of this size will have significant repercussions on the market.
Kim Nilsson, a former Mt. Gox trader who “spearheaded the investigation into the exchange’s bankruptcy,” told The Telegraph that this massive payout would “completely crash the market”.
He explained that the market could crash if any entity (individual or corporate) were to liquidate the holdings of Mt. Gox, in order to facilitate the payouts. His bearish claim was based on the premise, that if 160,000 BTC were pushed into the market with no real demand, the price of cryptocurrencies across the spectrum would plummet.
However, he also went on to say, “It’s possible some people would try to instantly sell the Bitcoins as soon as they receive them, but it would probably be less than 100pc of the people doing it.”
Despite the direction of the price movement, traders will be happy to see their investment return after a debacle that lasted close to five years.
Image via Shutterstock
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