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On-chain data shows almost 142,000 Bitcoin (BTC), equivalent to more than $9 billion of value tied to the wallets of bankrupt cryptocurrency exchange Mt. Gox, went on the move last night for the first time in half a decade. Speculation swirled that these funds were being sold off to compensate Gox creditors with cash, but such assertions represent a misunderstanding of legal distribution process currently underway. Mt. Gox’s bankruptcy proceedings were stayed in 2018 and shifted into civil rehabilitation, allowing claims to be paid out in BTC as opposed to cash at the request of creditors.

Though a 100% sell-off of the BTC wrapped up in these recent transfers is extremely unlikely, it would represent less than half of the selling volume that the BTC market had to absorb from Grayscale’s Bitcoin Trust (GBTC) product over the course of the past several months. While GBTC hemorrhaged tens of billions of Dollars in Bitcoin over the course of 78 straight trading days between January 10 and May 3 of this year, BTC largely shrugged off the fund’s outflows and shot to new all-time highs. The coming distribution of Mt. Gox funds, representing base, intermediate and, early lump-sum payments, will be distributed through the end of October.

Related Assets: Bitcoin (BTC-USD), Ethereum (ETH-USD)

The unit price of Bitcoin (BTC) in USD terms climbed back beyond the $70,000 threshold yesterday, but gave up some of its gains this morning after thousands of BTC held by bankrupt crypto exchange Mt. Gox went on the move for the first time in years. Understanding the significance of this requires a short trip back in time to more than a decade ago, when one single exchange handled more than 70% of all BTC trades. That exchange was Mt. Gox, originally an internet-based exchange for trading cards (Mt. Gox was an acronym representing Magic: the Gathering Online eXchange). This concentration of volume and accounts was a major liability for several reasons, which became obvious when hacks, technical issues, and potential fraud resulted in the loss of anywhere from 650,000 BTC to 850,000 BTC, worth roughly $330.0 million to $467.5 million at the time of Mt. Gox’s subsequent bankruptcy filing in February 2014.

It was previously reported that 200,000 BTC were eventually recovered, but on-chain data shows just under 142,000 BTC – now worth more than $9.6 billion – was transferred to a single address from 72 different Mt. Gox wallets last night. Some incorrectly speculated that these coins were set to be sold-off for cash, but Former CEO Mark Karpeles confirmed on X that the trustee of Mt. Gox’s assets had begun “moving coins to a different wallet in preparation of the distribution”, but noted that “there is no imminent sale of bitcoins happening.” Mt. Gox’s legal proceedings were shifted from bankruptcy to civil rehabilitation several years ago, allowing claims to be paid out in BTC or cash at the request of creditors.

All or part of the BTC being moved around by the trustee is now set to be distributed to claimants over the period of several months. This has been a long-cited concern among cryptocurrency investors, considering these coins are now worth many multiples more than when they essentially entered lockup more than nine years ago. The sudden movement of these assets implies…

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