It seems like the story of Mt.Gox bitcoins will never come to end. Mt.Gox trustee announced today that deadline for selection of repayment method, registration of payee information, and repayment deadline are changing. Read the official notification here. Of course, distribution of funds to many creditors is not an easy task. It requires thorough process that makes sure all legal guidelines are followed and best efforts are made that all creditors received their portion of funds. But it has been a very long time since the hack. Last year it seemed that Mt.Gox story was going to have good ending and creditors finally receiving their funds. We will be hearing more of Mt.Gox for rest of 2023.
This deadline was delayed four months ago already. You can read more about it in my previous post from four months ago - Mt. Gox Trustee Delays Repayments And Clarifies Process. Maybe this postponement is a good thing. Perhaps, this will make sure all creditors have filed their claims properly and no creditor will be left behind.
I am not a creditor. I never used Mt.Gox. However, this story does involve all bitcoin participants. These are significant amounts of bitcoins Mt.Gox trustee will be distributing. When the trustee announced the repayment procedures about six months ago, they had 141,686 bitcoins to distribute and/or sell. Since they have not started the repayments yet, they probably still have the same amount of bitcoins in their possession. This is a lot of bitcoins. Short term concern has been, if most of these bitcoins make their way to the market, it would bring bitcoins price more and extend the bear market.
In my opinion, Mt.Gox trustees actions, announcements and interviews have influenced bitcoin's price and overall crypto market trend in the past. I do still believe that Mt.Gox trustee was the among the main reasons 2018 crypto bear market happened. I also think their announcement of repayments in November 2021 have contributed to the current bear market. Interestingly, most of these market influences were only based speculation or fear of what Mt.Gox would do or fear of it, not the actual actions. I know, this is oversimplification of markets. There are many more factors that contribute to market conditions, trends, and price action. However, it would still be a good idea to remove this factor out of the equation already. After all Mt.Gox funds are distributed to creditors, at the very least, we don't have to worry about large amount of bitcoins entering the market.
That said, if this is problem for bitcoin's price, it would only be a short term issue. In a long term, Mt.Gox funds have no influence in the success of bitcoin as a revolutionary technology. The network will continue to grow, price will continue to appreciate, more and more people will embrace decentralization as a new model for finance, economy, and web.
The new deadline for selecting repayment methods and registration of payee information is now March 10, 2023. Previous deadline was January 10, 2023. The reason for extending this deadline seems to be there are some creditors who have not completed selection and registration yet. As previously was announced, creditors have few options to choose from:
- Early lump-sum repayment.
- Repayment for a portion of cryptocurrency rehabilitation claims in cryptocurrency repayment by bank remittance.
- Repayment by bank remittance.
- Repayment by remittance through a fund transfer service provider
The new deadline for repayments is now September 30, 2023. Previous deadline was July 31, 2023. On one hand, it might be good to know we won't be seeing large amounts of bitcoins sold at once, but at the same time knowing that this may potentially happen towards the end of this year may influence crypto investors and traders. But also, there is a good possibility that creditors are long term investors in bitcoin and won't be interested in selling their coins. Considering that portions of the funds can be repaid in bitcoin, Mt.Gox won't have as many bitcoin to sell as they currently hold.
Mt.Gox story continues. At this point, I am not sure it will end anytime soon. Perhaps we will still be talking about Mt.Gox bitcoins in 2024 and beyond. At some point it will be come irrelevant, and won't have much of an influence in bitcoin price action anyway. As the network grows, demand for bitcoin continues to grow as well. There will be plenty who are interested in obtaining more bitcoins if Mt.Gox trustee or creditors decide to sell them.
This makes me wonder, how long will it take for FTX funds to be sorted out and ready to be distributed to FTX users, investors, creditors, etc.
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