Mt. Gox to Start Distributing $9B in Stolen Bitcoin to 20K Creditors From 2014 Hack

The bankrupt platform is expected to start distributing assets stolen from clients in a 2014 hack, according to a report

Bankrupt cryptocurrency platform Mt. Gox is set to begin distributing assets stolen from clients in a 2014 hack, a move that could impact the price of Bitcoin, according to experts.

Bitcoin, the world's largest cryptocurrency, fell below $60,000 last week, marking its second-worst weekly decline of the year.

On Monday, the bankrupt Tokyo-based exchange announced that it will start distributing the stolen assets in the first week of July. It is expected to return more than 140,000 Bitcoin, currently valued at almost $9 billion.

According to the court-appointed trustee overseeing the exchange's bankruptcy proceedings, the exchange's roughly 20,000 creditors will receive a mix of bitcoin and bitcoin cash as part of the dispersal.

Trustees submitted a repayment plan and were given a deadline of October 2024 by a Tokyo court last year.

Mt. Gox, once the world's top crypto exchange, handling over 70% of all Bitcoin transactions in its early years, shut down and went bankrupt in February 2014 after suffering the biggest cryptocurrency heist on record. Hundreds of thousands of bitcoins were stolen from the exchange, which blamed hackers who took advantage of a software security flaw.

Analysts expect the upcoming Mt. Gox repayments to add selling pressure to Bitcoin markets as early investors will receive the assets at a much higher price than when they bought in, leading some to cash out on at least some of their holdings.

“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,” John Glover, chief investment officer of crypto lending firm Ledn, told CNBC. “Some will clearly choose to take the money and run,” Glover said.

However, some experts believe that there is enough market liquidity to cushion the blow of any possible mass selling. The losses are likely to be short-lived and contained, analysts told the outlet.

“I think that sell-off concerns relating to Mt. Gox will likely be short term,” Lennix Lai, chief commercial officer of crypto exchange OKX, told CNBC, noting that “many of Mt. Gox's early users as well as creditors are long-term Bitcoin enthusiasts who are less likely to sell all of their Bitcoin immediately.”

Bitcoin enjoyed a major rally earlier this year, climbing over $70,000 after the US Securities and Exchange Commission's approval of the first spot Bitcoin ETF. The latest Bitcoin halving - a mechanism to limit supply that takes place every four years - in April also boosted the cryptocurrency's price.

On Tuesday, Bitcoin was trading down almost 2% at $61,849 per token.

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