Cryptocurrency market suffered a "heavy blow", and the culprit was Mt.Gox

Just today, a short document caused a major impact on the crypto market.

During the European session today, Bitcoin fell 2.4% in just one hour, approaching the $60,000 mark and falling to $60,500. Ethereum also fell nearly 3% in one hour, hitting a low of $3,240. This wave of declines affected the entire crypto market. Rats, which once led the gains this morning, almost gave up all the gains overnight, and the decline of altcoins generally exceeded 10% during the day.

According to CoinAnk data, within one hour of the market plunge, the total amount of liquidation on the entire network reached $4.31 million, of which long orders were liquidated for $3.59 million and short orders were liquidated for $719,450. The amount of Bitcoin liquidation was $1.5872 million, and the amount of Ethereum liquidation was $588,400.

And the "culprit" of all this is Mt.Gox.

Mt. Gox to start repayments soon

Mt. Gox, a cryptocurrency exchange that lost 850,000 Bitcoins worth of investor funds in 2014, will begin repaying its users in July 2024.

Details of Mt. Gox Repayment Process

According to a statement released by Mt. Gox on June 24, the exchange’s rehabilitation trustee will process repayments in Bitcoin (BTC) and Bitcoin Cash (BCH). Repayments will be paid to cryptocurrency exchanges that have exchanged and confirmed the necessary information.

The trustee asked users to be patient, explaining that repayments will be made in the order of exchanges that have completed the exchange and confirmation of the necessary information.

The trustee reiterated the need for patience, saying,

“We will begin repayments in the order of cryptocurrency exchanges where the rehabilitation trustee has completed the exchange and confirmation of the required information. Please wait for a while until repayments are completed.”

Because the amount of compensation is too huge, Mt.Gox will repay a total of 142,000 BTC (about 8.72 billion US dollars) and 143,000 BCH (507.65 billion US dollars) to creditors, a total of about 8.77 billion US dollars in selling pressure. Shortly after the announcement of this news, the market moved and began to fall.

At this time, the market liquidity is poor and there is a lack of sufficient buying support. The selling pressure of nearly 10 billion US dollars further exacerbated the panic of the market, and investors chose to withdraw and wait and see.

In fact, as early as the early morning of May 28, the Mt.Gox wallet, which had been declared bankrupt for 10 years and had no movement for 5 years, began to move abnormally, making 10 transactions to an unknown address and transferring 141,685 bitcoins.

This decentralized compensation method helps to slow down the market decline caused by concentrated selling. In addition, many creditors have sold bonds to funds. Considering the possible interest rate cut at the end of the year, some funds may not sell immediately.

About Mt. Gox

Mt. Gox, short for “Magic: The Gathering Online Exchange,” is a Bitcoin exchange that was once located in Tokyo, Japan. The exchange was founded by Jed McCaleb in 2010 as a trading platform for the Magic: The Gathering card game, but later transformed into a Bitcoin exchange. At its peak, Mt. Gox handled about 70% of the world's Bitcoin trading volume and was one of the world's largest Bitcoin exchanges at the time.

Jed McCaleb is an American programmer, entrepreneur, and philanthropist. He is the founder and CEO of aerospace startup Vast and the co-founder and CTO of Stellar. Prior to co-founding Stellar, McCaleb founded Ripple and served as its CTO until 2013. McCaleb is also known for creating the Mt. Gox Bitcoin exchange, the peer-to-peer eDonkey and Overnet networks, and the eDonkey2000 application.

However, Mt. Gox is notorious for its mismanagement and security breaches. In 2014, Mt. Gox announced that it had lost about 850,000 Bitcoins (worth about $450 million at the time) due to a hacker attack. This led to the exchange's bankruptcy and triggered a massive legal and financial dispute.

The Mt. Gox incident had a profound impact on the Bitcoin and cryptocurrency markets, exposing security and regulatory issues in early cryptocurrency exchanges and prompting the industry to continuously increase its requirements for exchange security and transparency.