Mt. Gox users alarmed by $10 billion transfer to unknown wallet

Mt. Gox has transferred 42,830 BTC, worth about $2.9 billion, from its cold wallets, according to Arkham Intelligence data. This marks the first major transfer from the defunct bitcoin exchange in five years.

The assets were moved in multiple transactions to an unknown address by 11:00 am Hong Kong time on Tuesday. Despite this transfer, Mt. Gox still holds roughly $9.42 billion worth of bitcoin in its tracked wallets, according to Arkham.

In September 2023, the Mt. Gox trustee announced a 12-month extension of the repayment deadline, pushing it to October 31, 2024. Earlier today, $9.8 billion of bitcoin from multiple Mt. Gox-associated wallets was consolidated into a single wallet, causing some concern among creditors. Subsequently, approximately $400 million worth of bitcoin was transferred to several new addresses, leaving the consolidated wallet with around $9.4 billion, which is about half of Mt. Gox’s total bitcoin holdings.

The Mt. Gox Trustee issued a statement explaining the recent transfers. “Under the Rehabilitation Plan, the Rehabilitation Trustee is preparing to make repayment for the portion of cryptocurrency rehabilitation claims to which cryptocurrency is allocated,” the Trustee said. He clarified that creditors could choose to receive repayments in cryptocurrency or fiat money. However, no bitcoin or bitcoin cash has been sold yet for creditors requesting fiat payments.

The Trustee confirmed that the bitcoin and bitcoin cash are being managed securely and requested patience from creditors as preparations for repayments continue.

Former Mt. Gox CEO Mark Karpeles reassured creditors on social media, stating, “As far as I know, everything is fine with Mt. Gox. The trustee is moving coins to a different wallet in preparation for the distribution that will likely happen this year. There is no imminent sale of bitcoins happening.”

The bankruptcy process plans to repay creditors with a mix of fiat currency, bitcoin, and bitcoin cash. While fiat payments have begun, bitcoin and bitcoin cash payments have yet to be distributed. The repayment deadline has been pushed back several times in the past, so the current October 2024 deadline may still be subject to change.

Earlier in January, the trustee overseeing the liquidation of the infamous exchange contacted creditors to verify their identities and account details, signaling a move closer to Bitcoin repayments.

Mt. Gox, once the world’s largest bitcoin exchange, collapsed in 2014 after a major security breach led to the loss of 850,000 bitcoins. In September 2023, the trustee announced a new reimbursement plan for creditors, which includes 142,000 bitcoins, 143,000 bitcoin cash, and 69 billion Japanese yen (roughly $510 million).