Largest Creditor of Bankrupt Mt. Gox Exchange to Hold Onto Returned Bitcoin – Huge Selling Pressure Averted?

In another installment of the bankruptcy proceedings related to defunct cryptocurrency exchange Mt. Gox, the Mt Gox Investment Fund, the largest creditor of the failed platform, is not planning to sell the tokens that it is to receive later this year.

A person familiar with the fund’s activities who asked not to be identified told Bloomberg that the Mt Gox Investment Fund’s strategy is to hold the digital assets that are scheduled to be returned this October.

The entity decided to opt for an early payout instead of waiting for all the litigation over Mt. Gox’s collapse to be completed. Under the plan, the Mt Gox Investment Fund will secure 90% of what is collectible in a ratio of about 70% bitcoin (BTC) and 30% cash, according to the anonymous source. The person did not specify the amount of BTC the fund hopes to obtain under the exchange’s bankruptcy proceedings.

The deadline for the Japanese platform’s creditors to register the payment method under which they desire to receive claims comes up on March 10 after it was postponed by two months from January 10.

Japanese lawyer Nobuaki Kobayashi, who serves as the Mt. Gox trustee, stated in a letter released earlier this week that “[r]ehabilitation creditors who have not completed the Selection and Registration by the deadline will not be able to receive any of the repayments below.” The accompanying list of repayment methods comprises:

Early Lump-Sum RepaymentRepayment for a Portion of Cryptocurrency Rehabilitation Claims in CryptocurrencyRepayment by Bank RemittanceRepayment by Remittance through a Fund Transfer Service Provider

“Please note that rehabilitation creditors who have already completed the Selection and Registration do not need to perform the Selection and Registration again. Please also note that these creditors may change their Selection and Registration up to the deadline,” according to the letter.

As the Japanese trustee has as much as BTC 141,686 under his control, with a current value of about $3.06 billion, many industry observers have been afraid that the release of the bitcoin’s from the Mt. Gox trove could trigger a major selling push in the crypto market. However, the fund’s reported decision could mean that this scenario will be averted.

The Tokyo-based Mt. Gox was once the largest crypto exchange in the world, but it filed for bankruptcy in 2014 after some 850,000 BTC went missing. The exchange’s creditors have until April 6 to make a decision whether to chose the October payout, or wait for a longer period of time to retrieve a higher share of their claims.