MtGox, the failed cryptocurrency exchange that collapsed due to an 850 BTC hack in 2014, has until tomorrow to submit a repayment plan to its creditors and return 150 BTC.
Due to the hundreds of lawsuits filed against MtGox, and that have accumulated in the last 6 years against this exchange of cryptocurrencies, , the Tokyo District Court issued a recovery order for more than 1000 creditors claiming nearly 150 BTC, of the 850 BTC the exchange lost during the hack largest in cryptocurrency history, which occurred in 2014. Now, the Tokyo District Court has extended MtGox’s deadline on several occasions, most recently setting a repayment plan submission date of October 15. The court issued this order on June 30 of this year.
The exchange published a brief release where it expressed the court’s order and undertook to conduct a detailed analysis and study of this plan, arguing that it requires “further examination.” The exchange’s proposal to postpone the submission was accepted by the court, which issued the order to extend its deadline.
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The crypto community lives up to expectations
With the deadline almost over, the crypto community is waiting to see whether or not MtGox will present its refund plan tomorrow. Moreover, many traders and experts are expressing their concerns about how the introduction of 150 thousand BTC to the markets will affect the price of the cryptocurrency, as introducing this amount of BTC can undoubtedly negatively affect the markets. Mr. Whale, a well-known cryptocurrency and digital asset investor, noted on his Twitter account that the MtGox refund could have a catastrophic impact within the digital asset markets.
Mr. Whale recalled the golden years of MtGox, noting that it used to be the largest and most important bitcoin exchange worldwide, handling around 70% of the BTC mined at the time, but that it also collapsed in the wake of the largest hack in history.
150.000 BTC can cause panic in the markets
The investor also points out that MtGox's creditors are demanding the BTC holdings they held before the terrible hack. These bitcoins were worth close to $400 USD per unit at the time of the exchange's hack. Therefore, Mr. Whale believes that many of the creditors and owners will begin to sell their holdings in the cryptocurrency once the exchange returns their investments.
The price comparison is quite tempting: since 2014 to the present, Bitcoin has grown by more than 2800%, so the 150.000 BTC, worth around $60 million in 2014, would now be worth $1695 billion, based on the value of the cryptocurrency at the time of writing. However, the sale of these Bitcoin units would have a catastrophic effect on the markets, which would collapse with immediate effect.
“On October 15th it will be determined whether users will actually get their bitcoins back, but more importantly it is important to consider what this will mean for the markets. If 150.000 BTC are sold, this would cause a brutal drop and fear would spread quickly”
Mr. Whale’s comments are meant to remind the crypto community that there is a chance that BTC prices will see a big drop after October 15. However, the investor also points out that this is not financial advice.
Other major players in the crypto community remain positive against the assumptions, pointing out that the introduction of 150.000 BTC may affect the markets, but not collapse them. Others believe that MtGox will not return the BTC at once, but will make a gradual return and that the trading volume currently taking place in the cryptocurrency is sufficient to support this inflow.
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