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- The deadline for the distribution of cryptocurrency assets related to the Mt.Gox case on the bankrupt exchange will expire on December 15.
- This “liquidation compensation plan” involves the distribution of nearly 140,000 Bitcoins to users who lost funds during the bankruptcy of the Mt.Gox exchange.
- These bitcoins are currently worth $2.6 billion. If a wave of compensation recipients choose to sell their bitcoins, the market may turn bearish.
A week later, the legend of Mt.Gox exchange may really come to an end. On December 15, 137,891 bitcoins are expected to be distributed to users who lost funds after Mt. Gox closed in 2014.
The long-awaited Mt.Gox compensation expenditure
The closing of Mt.Gox is one of the most notorious events in the history of blockchain and cryptocurrency. The Japanese exchange abruptly ceased operations in February 2014, announcing that it had lost 850,000 BTC in a series of hacking attacks.
Bitcoin was only one of the few recognized cryptocurrencies at the time. About 70% of Bitcoin transaction volume came from Mt.Gox.
The incident caused several early Bitcoin investors to lose their Bitcoin holdings. Since then, the crypto community has often repeated that sentence-“It’s not your private key, it’s not your coin”. The slogan advises investors not to store their funds in centralized exchanges.
Concerns about market reaction
The upcoming distribution plan will distribute the recovered $2.6 billion worth of bitcoin to some former Mt. Gox users. At that time, the price of Bitcoin was only about $700. Mt.Gox stopped all withdrawal operations in February 2014. Since then, the value of these bitcoins has increased by approximately 2600%, which may be a windfall for the recipients of these bitcoins.
Since the value of the currency has risen sharply since 2014, many recipients are likely to sell their newly received bitcoins on the open market. If market sentiment changes suddenly due to this distribution, it may create a bearish trend. “Crypto Twitter” users have expressed concern about the upcoming deadline.
On December 8, the blockchain data company CryptoQuant tweeted that the deadline for submission of the Mt. Gox liquidation compensation plan was December 15. This event may be a bearish signal for Bitcoin because a run may occur. The CEO of CryptoQuant, Ki Young Ju, said in response to setting an alarm for the outflow of Mt.Gox Bitcoin to reduce asset risks.
“The most worrying incident (lack of better terms) is the Mt.Gox incident this month, which happened on December 15…
At the moment we are only fluctuating up and down, and there is no clear up or down signal, and since I don’t perform band actions like this, I will temporarily withdraw from the market (only spot)-Waro”
A lot of anticipation
Many cryptocurrency followers have been monitoring bitcoin addresses that are suspected to be controlled by Mt. Gox custodians. As the December 15 deadline approaches, Mt. Gox custodians have received more and more observations. A Reddit sub-forum called /r/mtgoxinsolvency discussed this event and created a website dedicated to tracking related transactions. But so far, these Bitcoin activities have been dormant.
In any case, the date of Mt.Gox’s aftermath plan has been delayed many times before. The date of December 15 was confirmed for the first time in October this year.