Mt. Gox's Move: Billions in Bitcoin Transferred to a New Wallet

2024-07-17, 08:17

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![](https://gimg2.gateimg.com/image/article/17212037471690791857hotspot.jpeg)
## [TL; DR]
On 5 July Mt Gox transferred over 47,000 <a href="/th/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> from its cold storage to another digital wallet, a sign that its BTC redistribution might have started.

Mt Gox’s redistribution of bitcoin may lead to a mass sell-off which can result in its price fall.

There is a low possibility that Mt Gox may rebrand and re-emerge as a regulated cryptocurrency exchange.

## Introduction 
The effects of crypto crimes may stay with the sector for a long period. For example, after hacking incidents it may take years for some DeFi firms to resume their operations.  Although crypto projects such as FTX and <a href="/th/price/terra-luna" target="_blank" class="blog_inner_link">Terra</a> Luna were not victims of crypto hacking they have failed to recover after their implosions.

Mt Gox’s case  illustrates the devastating effects of hacking on crypto businesses. Although it has failed to resume its crypto exchange business it still has an obligation towards its investors. This write up discusses Mt Gox’s debt clearance strategy following its demise.

Read also: [Germany and Mt. Gox Addresses Sell-Off Panic Eases as Market Rebounds from Lows](https://www.gate.io/learn/articles/gate-research-germany-and-mt-gox-addresses-sell-off-panic-subsides-market-rebounds-from-lows/3479 "Germany and Mt. Gox Addresses Sell-Off Panic Eases as Market Rebounds from Lows")

## Mt Gox Transfers over 47,000 BTC as it Aims to Pay its Creditors
In a move which may be connected to its plan to repay its creditors Mt Gox transferred 47,228 BTC worth around $2.71 billion from its cold storage to a new wallet. If this move is related to its plan to repay its creditors it marks a critical moment for the crypto world. This is because the transfer of large quantities of bitcoin to the creditors may lead to high selling pressure within a short to long term period. As the following screenshot indicates Arkham Intel announced Mt Gox’s transfer of bitcoin. 
 ![](https://gimg2.gateimg.com/image/article/17212038241.jpg)
Source: x.com

As the image indicates, Mt Gox sent a sum of bitcoin to a digital wallet whose owner is still unknown to the public. Despite such a transfer of a large amount of bitcoin Mt Gox still holds over 138,000 BTC. Nevertheless, Arkam Intel has maintained that this bitcoin transfer is related to the payment for Mt Gox creditors.

After transferring the over 47,000 BTC from its cold wallet to another crypto wallet address Mt Gox once again moved 1,545 BTC to a hot wallet that belongs to one of the crypto exchanges called Bitbank which is involved in the repayment of the creditors. The above transactions seem to confirm that the recent large bitcoin transaction is related to the creditor repayment process.

As per a recent CoinDesk publication, Willy Chuang, COO of crypto exchange WOO X, strongly believes that the large bitcoin transaction signified the beginning of the repayment of Mt Gox creditors. [Chuang said](https://www.coindesk.com/business/2024/07/05/mt-gox-begins-repayments-in-bitcoin-and-bitcoin-cash/ "Chuang said"), “Mt. Gox moved 47,228 BTC, signaling the start of their repayment process, which has caused some market fear due to the large potential sell-off.”

Based on the above blockchain transaction analysis Mt Gox’s crypto transfers may be in line with the legal provisions governing the liquidation process in Japan. According to Arkham Intelligence Mt Gox made several other smaller transactions in the past as the next image indicates.

Read also: [In-Depth Analysis of the ](https://www.gate.io/blog_detail/367/in-depth-analysis-of-the-mt.-gox-incident-from-7-years-ago-could-the-compensation-package-be-the-catalyst-for-a-major-bitcoin-sell-off "In-Depth Analysis of the ")
![](https://gimg2.gateimg.com/image/article/17212040492.jpg)
Mt Gox Bitcoin Transfers - Arkham Intelligence

Some analysts believe that Mt Gox made the series of small payments as test transactions in preparations for the full-scale creditor repayment process. Based on a recent [publication by TheBlock](https://www.theblock.co/post/301448/mt-gox-to-distribute-9-billion-of-bitcoin-bitcoin-cash-repayments-from-beginning-of-july "publication by TheBlock"), in June Mt Gox announced that it would  distribute over $9 billion denominated in bitcoin (BTC), <a href="/th/price/bitcoin-cash-bch" target="_blank" class="blog_inner_link">Bitcoin Cash</a> (BCH) and fiat money to its creditors starting in July. The $9 billion comprises 142,000 BTC (about $8 billion),143,000 BCH ($45.9 million) and 69 billion Japanese yen ($428.7 million).

## Crypto Market Analysis: The Rise and Fall of Mt Gox
Mt Gox, founded in 2010, became the largest bitcoin exchange until it collapsed in 2014. During its operational period, it used to handle between 70% and 80% of all bitcoin transactions. Nevertheless, in February 2014 the exchange was hacked leading to a loss of over 850,000 Bitcoin, valued at around $600 each. As a result of that hacking incident the exchange declared bankruptcy during the same year.

Later, it devised the civil rehabilitation plan so as to compensate its former customers. It submitted its rehabilitation plan to the Tokyo District Court in 2018 and the court approved the plan in March 2019. Although it started to redistribute the assets soon after the approval of the plan the process was cumbersome and slow.

Important to know: [How to Buy Bitcoin on Gate.io](https://www.gate.io/how-to-buy/bitcoin-btc "How to Buy Bitcoin on Gate.io")

## Mt Gox’s Accelerated Asset Redistribution Process and Market Reaction 
The crypto market did not take much time to respond after Mt Gox transferred over 47,000 BTC from its cold storage to a crypto wallet address whose owner has not yet been identified. Within a few hours the <a href="/th/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin price</a> plummeted below $57,000. And during the next 24 hours its value fell further by over 3.45% to trade at around $56,851.

The bitcoin market’s sudden reaction led investors to predict a strong price fall after the redistribution of the over 142,000 bitcoin to the creditors. Regarding this, TheBlock quoted Rachael Lucas, BTC Markets’ Crypto Analyst, as saying, “This significant payout, amounting to US$9 billion, is expected to add substantial selling pressure as the market absorbs the additional supply.”

John Glover, chief investment officer of Ledn, a crypto lending firm, is another analyst who believes that Mt Gox’s redistribution of bitcoin will create much selling pressure. In an interview with CNBC [Glover said](https://www.cnbc.com/2024/07/05/mt-gox-begins-repaying-bitcoin-to-creditors-a-decade-on-from-collapse.html "Glover said"), “Many will clearly cash out and enjoy the fact that having their assets stuck in the Mt. Gox bankruptcy was the best investment they ever made.” He added, “Some will clearly choose to take the money and run.”

Nevertheless, JP Morgan crypto analysts feel that the cryptocurrency market impact of the bitcoin redistribution will be short-lived. They told CNBC: “Assuming most of the liquidations by Mt. Gox creditors take place in July, [this] creates a trajectory where crypto prices come under further pressure in July, but start rebounding from August onwards.”

On the contrary some members of the crypto community have played down the impact of Mt Gox bitcoin redistribution on its price. For instance, Alex Thorn, Galaxy Digital’s head of research, believes that some of the bitcoin recipients are “diamond handed.” As such, they may resort to holding their BTC so that  they may benefit from its further price rise as a result of the bitcoin market speculation tendencies, unless there are unexpected changes in crypto regulations or macroeconomic conditions. As we know, some leading economies like the United States and regional bodies such as the EU are in the process of enacting new crypto regulations. One of the recently introduced crypto laws is the EU's Markets in Crypto-Assets Regulation (MiCA).

In the meantime, Mt Gox’s redistribution of bitcoin should have positive cryptocurrency legal implications. This is because the defunct crypto exchange seemed to have complied with Japan’s bankruptcy regulations and crypto law. From the look of things, Mt Gox’s transfer of over 47,000 was within the provisions of the relevant laws.

## Is Mt Gox’s Future Bright or Bleak?
One of the leading questions in the minds of many people is whether or not Mt Gox will rebrand and continue with its crypto operations. Since Mt Gox seems to have complied with Japan’s digital asset regulations it may choose to revive its crypto business. Although such rumor has been within the crypto community for some time, there is no official confirmation from Mt Gox. As a result, there are no timelines for its reopening. However, there is a possibility that it may re-emerge as a regulated and legitimate cryptocurrency exchange.

## Conclusion
In June Mt Gox announced that it would start the redistribution of bitcoin and other assets to its creditors in July. Later on, in a development which some analysts believe marked the beginning of the repayment process the exchange moved over 47,000 bitcoin from its cold storage to a crypto wallet address whose owner is not yet known. In the meantime, some market analysts have suggested that Mt Gox’s redistribution of over 142,000 bitcoin may lead to a mass sell-off which may push its value downwards.

<div class="blog-details-info">
<div>Author:* Mashell C.*, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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