Defunct crypto exchange Mt. Gox will begin distributing $9 billion in Bitcoin (BTC) and Bitcoin Cash (BCH) repayments in early July 2024. Following this announcement, Bitcoin's price dropped over 5%, currently trading at $61,043.

Relief After a Decade-Long Wait

Mt. Gox creditors will finally see some relief as the now-defunct exchange starts distributing $9 billion in BTC and BCH from July. Creditors have been waiting for over ten years since the 2014 hack that led to the theft of their funds.

A notice from Mt. Gox Rehabilitation Trustee Nobuaki Kobayashi confirmed that the exchange will begin asset distribution after multiple postponements. The notice stated, “We have taken time to ensure safe and reliable repayment to creditors, including technical remedies for safe repayments, compliance with financial regulations in each country, and discussion of repayment arrangements with the cryptocurrency exchanges.”

A Long Journey to Repayment

Mt. Gox, once the leading cryptocurrency exchange processing over 70% of all Bitcoin transactions, was devastated by a 2014 hack that resulted in the loss of 740,000 BTC, now valued at $15 billion. After years of legal battles and planning, creditors will finally start receiving repayments. Kobayashi noted that these repayments, beginning in July, are subject to due diligence and specific safety measures.

The repayment plan has been under development for several years, with a Tokyo court setting an October 2024 deadline last year.

Market Reaction: Bitcoin Drops on Selling Pressure Concerns

Minutes after the announcement, BTC dropped to $61,000, while BCH fell 9% to $352.86. BTC slightly recovered, trading at $61,338 at the time of writing.

The upcoming repayments are expected to add selling pressure to the Bitcoin market, as early Mt. Gox investors will receive repayments worth significantly more than their initial investments. It is anticipated that many creditors may sell their holdings, at least in part, upon receiving them.