Speculation Over Bitgo’s Role in $2.1B BTC Distribution as Dormant Mt. Gox Wallet Activates

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Hassan Shittu

Journalist

Hassan Shittu

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Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in…

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Last updated:

August 13, 2024 01:33 EDT

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The reactivation of a dormant Mt. Gox wallet, containing over $2.1 billion in Bitcoin, ignited speculation about its implications for the ongoing creditor repayment process.

This Mt. Gox wallet, managed by Bitgo and holding 33,105 Bitcoin (approximately $1.96 billion at the time of writing), made a test transaction at 10:57 UTC after two weeks of inactivity.

This development comes as the Mt. Gox asset distribution approaches its final stages, carrying considerable weight for both creditors and the market.

The wallet, identified by its address “bc1q26,” previously received these funds on July 30 when Bitcoin’s value was higher, amounting to $2.19 billion.

Bitgo’s Pivotal Role in the Distribution Process

According to data from Arkham Intelligence, Bitgo’s involvement in the distribution is crucial for returning funds to Mt. Gox creditors.

Further activity from this wallet suggests that Bitgo is conducting final preparations before distributing the remaining funds.

Data from CryptoQuant indicates that approximately 67.7% of the distribution process is complete, leaving many creditors still waiting for their share.

The Mt. Gox wallet’s sudden activity could signal the start of final payouts or further tests before a larger transfer occurs.

Market Impact and the Future of Mt. Gox Claims

Despite anticipation surrounding a potential sell-off of these distributed assets, the market has remained relatively stable. No significant price drop has been observed.

The Mt. Gox exchange, once the world’s largest Bitcoin exchange, collapsed in 2014 after losing 850,000 BTC in a massive hack, leading to its bankruptcy.

Creditors have awaited the return of their assets for over a decade – a process fraught with legal and logistical hurdles.

In July 2024, Mt. Gox announced it would begin repaying creditors in Bitcoin and Bitcoin Cash. This followed a rehabilitation plan involving designated crypto exchanges, including Kraken, Bitstamp, and Bitgo.

While the crypto community is watchful, the expected sell-off hasn’t materialized. Creditors are showing restraint despite the large sums involved.

A report by Glassnode suggested that the conclusion of this long-running saga could alleviate a substantial burden on the market, bringing closure to one of the most momentous events in cryptocurrency history.

Mt. Gox has completed initial Bitcoin payouts to creditors through Kraken and Bitstamp, though some withdrawal issues arose and have mostly been resolved.

The exchange recently moved $5.52 billion worth of Bitcoin through a series of transactions. This included $2.85 billion to an undisclosed wallet and $2.47 billion from cold storage to an unknown address, in addition to internally shifting portions of its holdings between cold wallets.

With over $9.4 billion worth of Bitcoin still owed to Mt. Gox creditors, completing this distribution is a critical step for those directly involved and the entire cryptocurrency ecosystem.