Mt. Gox, once the largest Bitcoin exchange, has delayed repaying billions of dollars in Bitcoin to its creditors by another year, sparking a rise in Bitcoin’s value. The exchange, infamous for its 2014 hack, was scheduled to finish repaying users by October 31, 2024, but has now extended the deadline to October 2025. This extension has led to a surge in Bitcoin prices, which have jumped back above $62,200—up nearly 3% in the past 24 hours.
Why the Delay is Bullish for Bitcoin
Investors seem to be reacting positively to the news of this repayment delay. When Mt. Gox creditors receive their long-awaited Bitcoin, there’s always a concern that many might sell, putting significant downward pressure on the market. With billions worth of Bitcoin no longer expected to hit wallets and exchanges anytime soon, the sell-off has been postponed, creating a more favorable market environment.
When the first batch of repayments was distributed earlier in the year, Bitcoin prices took a hit as fears of mass sell-offs loomed large. Now, with the postponement, Bitcoin enthusiasts and traders see the delay as a reprieve, potentially keeping market volatility in check.
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The Issues Behind the Delay
Mt. Gox’s rehabilitation team cited various complications as the reason for the extension. According to a notice released on Thursday, many creditors have yet to receive their repayments due to incomplete documentation or unresolved procedural issues. The team did not specify the nature of the issues but confirmed that the delay was approved by the court to allow for a smoother repayment process.
This latest setback follows a long and frustrating journey for Mt. Gox customers, some of whom lost their investments in the infamous 2014 hack that saw 850,000 Bitcoins—valued at over $52.8 billion today—stolen from the exchange.
How Mt. Gox’s Hacked Funds Will Be Repaid
Following the hack and subsequent bankruptcy, law enforcement managed to recover a fraction of the stolen Bitcoins—around 140,000. This is the amount currently being repaid to creditors. The recovered funds represent only a small portion of the total assets stolen, but the rehabilitation proposal, approved in 2021, promises to return about 90% of those assets to affected users.
Several major crypto exchanges, including Kraken, Bitstamp, Bitbank, SBI VC Trade, and BitGo, are tasked with distributing the reclaimed Bitcoins to former Mt. Gox users. Repayments of other cryptocurrencies like Bitcoin Cash and Ethereum are also part of the process, although details on how much has been paid out so far remain unclear.
Bitcoin’s Rise in Context
The delay in repayments adds yet another chapter to the long, convoluted history of Mt. Gox’s collapse and its impact on the broader crypto market. Bitcoin was trading under $500 at the time of the hack in 2014. Today, its price has soared to over $62,000, meaning many Mt. Gox creditors who lost out years ago could see significant gains once their funds are returned. However, those gains are now postponed, which could be contributing to the current rally in Bitcoin’s price.
As Bitcoin climbs, investors are eyeing this delay as a positive development, alleviating concerns about a sudden influx of Bitcoin hitting the market and driving prices down.
Looking Ahead: What to Expect?
With another year of delay in repayments, the market will continue to monitor how these future payments could affect Bitcoin prices. Traders are also cautious, as any future repayment could still bring volatility depending on when and how much Bitcoin is distributed at once.
The ongoing saga surrounding Mt. Gox and its creditors shows how the history of Bitcoin is intertwined with major events in the crypto space. For now, investors can breathe a sigh of relief, knowing that the threat of a large-scale Bitcoin sell-off has been deferred—at least until 2025.
