Mt Gox Confirms Bitcoin Sell-Off Rumors

Mt Gox Confirms Bitcoin Sell-Off Rumors

Mt Gox, a former cryptocurrency exchange based in Japan, has admitted to liquidating USD 230 million of its remaining Bitcoin (BTC) and Bitcoin Cash (BCH) reserves from its wallet over the course of six months earlier this year. The exchange suffered a massive USD 470 million hack back in 2014, the biggest exchange hack in the history of Bitcoin until recently. The exchange claims that it needed this sell-off to exit bankruptcy by repaying affected traders and enter civil rehabilitation.

According to a press release published by the exchange on its official website, bankruptcy trustee Nobuaki Kobayashi has sold almost BTC 24,586 and BCH 25,331 between 7 March and 22 June, allowing the exchange to enter civil rehabilitation.

The fiat money raised from the sell-off is around JPY 26 billion, worth around USD 230 million with an average rate of USD 8,100 per BTC and USD 1,190 per BCH recovered, much more than their current rates of USD 6,500 and USD 480 respectively. The move was confirmed by the trustee after Bitcoin investors monitoring cryptocurrency wallets associated with the then-bankrupt exchange reported a flurry of activity and warned a possible sell-off.

Kobayashi said:

“Due to the Sale, the bankruptcy trustee has already secured a suitable amount of money to secure the interests that are expected to have obtained by BTC creditors under the Bankruptcy Proceedings in connection with BTC claims to be treated as non-monetary claims under the Civil Rehabilitation Proceedings. Accordingly, the bankruptcy trustee has determined that the interests expected to have already been obtained in the Bankruptcy Proceedings can be secured without taking the profit-securing measures under the Trust Agreement and Guarantee Entrustment and Guarantee Agreement for the BTC claims, and the BTC claims are not included in the subject protected claims under the Trust Agreement and the Guarantee Entrustment and Guarantee Agreement.”

The manner in which the sell-off was executed has raised serious questions regarding the process because order-book exchanges were used that possibly affected Bitcoin price considerably and contributed to the bearish trend during this timeframe. Normally, companies looking to sell this much use an over-the-counter (OTC) broker that curtails some of the impact on the market as opposed to the former approach. 

The Mt Gox exchange still holds an estimated BTC 137,891 and BCH which is worth around USD 970 according to the current rate. They have no plans of selling more any time soon. Traders who held funds at the time of the exchange hack must submit their claims to the exchange by 22 October 2018 to be eligible for compensation. The compensation will be determined by the court depending on the rehabilitation plan approved by the court.


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