Creditors of the defunct cryptocurrency exchange Mt. Gox are closer to getting repaid, according to a July 6 letter by the business’s Japanese bankruptcy trustee.
The trustee is asking creditors to register online and indicate how they want to receive their repayments. When payments will be made, and specific amounts were not outlined in the letter.
A disbursement could put pressure on Bitcoin price. The trustee held a trove of 141,686 Bitcoin, as well as cash and Bitcoin Cash coins as of September 2019, according to prior documents.
“Some Mt. Gox creditors will get Bitcoin. Some will sell them,” said Aaron Brown, a crypto investor who writes for Bloomberg Opinion. “It won’t be a significant fraction of total Bitcoin trading volume, but it might push prices down. The decline might spook some other people and we might see a further drop.”
Tokyo-based Mt. Gox -- once the world’s biggest Bitcoin exchange -- suspended all trading and went offline in February 2014 after losing about 850,000 Bitcoin valued at about $500 million at the time. Some of its holdings have subsequently been found. The coins are currently valued at more than $2.9 billion, based on Bitcoin trading at close to $21,000.
Read more: Mt. Gox Bitcoin Repayment Plan Gains Final Approval From Trustee
Once the coins are sold, that could affect Bitcoin prices, which have slid sharply in recent months amid the Terra blockchain collapse and crypto companies such as hedge fund Three Arrows Capital filing for bankruptcy.
The trustee also said it will not accept claims or transfers from the end of August “until all or part of the repayments made as initial repayments is completed for safe and secure Repayments,” according to the letter.