There have been a number of hacking incidents in the crypto market over the years. Unfortunately, investors lost millions. Over the years, it has affected the crypto market from different parts of the globe. Often times, after a hack, Bitcoin price slides down. Investors often times panic and lose sell their cryptocurrencies.
Crypto hacking incidents is also the reason for stricter regulations in the industry. Japanese regulators imposed stricter rules on crypto exchanges mainly because of these incidents. For Japan’s FSA, crypto exchanges should meet their new standards that prove that they can protect the funds of their investors.
Unfortunately, not all crypto exchanges decided to meet the new standards set by Japanese regulators. Kraken was even forced to stay away from Japan because of the new rules and regulations. But one of the worst crypto exchange hacking incidents in the history of the industry is the Mt. Gox incident.
The now-defunct crypto exchange has now opened up its online rehabilitation claim filing system to cater to corporate creditors that had crypto funds when the platform closed in 2014.
Nobuaki Kobayashi who works as Mt. Box rehabilitation trustee announced on September 12 that the creditors must file their claims by October 22 in order to be eligible for compensation. Mt. Gox has already accepted individual creditors as well who need to file their claims the same way corporate users file their claim.
70% of Bitcoin Trades Worldwide
There was a time when Mt. Gox controlled 70% of the total number of Bitcoin transactions worldwide. It has lost around $450 million. CEO Mark Karpeles has served jail time for embezzling funds from Mt. Gox. He was able to recover around 200,000 bitcoins worth of company funds.
However, Kobayashi was criticized for his decision to cover the outstanding liabilities of the crypto exchange platform by liquidating the crypto assets in large batches on spot trading markets instead of over-the-counter channels which is known to be used by large-scale traders. Kobayashi then promised that there will be no more surprise sell-offs.
Creditors Wanted to Receive Repayments
Creditors have petitioned that they receive repayments in either Bitcoin or Bitcoin Cash. Though it has not been guaranteed, it is now possible with a pending court approval. The exchange will have to compensate the creditors via civil rehabilitation rather than file for bankruptcy. However, the creditors will still have to wait for 2019 in order to get compensated. The amount of cryptocurrencies in Mt. Gox’s cold wallet amount to 137,891 bitcoins and Bitcoin Cash. It is worth around $1 billion in the current exchange rate.
How Can This Affect Current Bitcoin Price?
You can expect Bitcoin price to slide once Mt. Gox decides to payout the creditors. Could you imagine $1 billion worth of Bitcoins being distributed to creditors? There is a possibility that the recent price crash could be exacerbated by the lack of willing buyers.
Recently, Mike Novogratz think that the crypto market has bottomed out. However, considering the influx of $1 billion-worth of Bitcoin and Bitcoin cash into the market, we can expect the price to slide further in the coming months.