However, this is about to change as Mt. Gox enters the second stage of its rehabilitation and starts releasing Bitcoins to its creditors.
This can cause a flood of Bitcoin into the digital currency market that can potentially crash the Bitcoin market.
Mt. Gox. once known as the world’s foremost bitcoin exchange is currently undergoing massive rehabilitation as it tries to pay back all of the investors who had their Bitcoins stolen from the exchange. The controversial exchange has finally announced that they would be launching an online system to allow corporate users to confirm their filing of bankruptcy on the system.
To all those who already filed a valid bankruptcy claim, they would be able to file a compensation claim until October 2018 for the losses that happened in the 2014 hack. The launch of the claim filing system for corporate users is the second stage as individual user claims were opened back in August.
However, those who filed won't be receiving their Bitcoin immediately. The current trustee of Mt. Gox, Nobuaki Kobayashi, will need to submit a plan for the distribution of assets and this is set for February 2019. After that, there is no specific timeline for the release of the funds.
Potential Crash On The Cards
What many crypto analysts are concerned about is the release of Bitcoins in the market. When Mt. Gox was hacked, 850,000 Bitcoins were stolen. The total value of those Bitcoins is now worth around $5.5 billion. Mt. Gox original claimed that they lost track of 750,000 bitcoins belonging to customers and 100,000 of its bitcoins. After some time, they claimed that they were able to recover 200,000 of the stolen Bitcoins.
The recovered coins were then entrusted to Kobayashi by the Japanese court. One of his major moves since then was selling large amounts of it on from December 2017 to February 2018 to help pay off customers. Many have blamed him for the large drop off Bitcoin prices that happened at the same time.
According to reports, the drop was only caused by 7,000 bitcoins being sold from the trust. Many fear that the markets could experience a major crash when the remaining bitcoins in trust are released at the same time.
This could potentially flood the market and cause a big drop in prices, especially if those who get back their Bitcoins decided to immediately sell them. Things may not be that bad if the majority of investors decide to hold on to their Bitcoins instead of selling them immediately.