Bitcoin Falls After Mt. Gox Wallets Move $9 Billion Worth of BTC

Bitcoin is still reeling after a wallet belonging to defunct Bitcoin exchange Mt. Gox moved more than $9 billion worth of BTC to an unknown wallet yesterday—potentially to pay back creditors.

At the time of writing, the Bitcoin price has reclaimed $68,000 after sinking to $67,555.01 very early this morning.  In the past day, Bitcoin open interest increased by 1% and is currently sitting at $35 billion, according to Coinglass.

The drop is a rapid retreat for BTC. Only just yesterday it inched past the $70,000 mark after it was revealed Argentina has been meeting with official from El Salvador to discuss the possibility of adopting Bitcoin as legal tender.

But investors tend to get spooked when there’s activity from the Mt. Gox wallets, which sparks fears that a large amount of BTC is about to be sold on the market and set off a wave of volatility.

Mt. Gox was one of the first and largest Bitcoin exchanges in the world before it filed for bankruptcy in 2014. The funds—which were moved over 68 transactions overnight in batches of 2,000 BTC each— have been deposited into an unknown Bitcoin wallet. The transfer represents roughly half of the Mt. Gox holdings. The entity still has $9.4 billion worth of BTC held across several cold wallets, according to blockchain analytics company Arkham Analytics.

The wallet looks to have been created last week. As of early Tuesday morning, it still holds approximately $9.6 billion worth of Bitcoin and hasn’t yet moved any of the BTC it received.

Mt. Gox began offering Bitcoin trading in 2010 after it was founded by Jed McCaleb, who later sold it to Mark Karpelès in 2011. The exchange played a huge role in the early days of Bitcoin trading, handling around 70% of all Bitcoin transactions worldwide at its peak.

But being the first and largest Bitcoin exchange came with a ton of challenges.

Between 2011 and 2014, the exchange experienced a rash of exploits, service interruptions, and pressure from regulators to shut down. When it was revealed that hackers had siphoned away approximately 850,000 BTC—worth $450 million at the time and nearly $58 billion now—the exchange filed for bankruptcy.

Since then some 200,000 BTC has been recovered. But many creditors are still waiting to be repaid.

In September last year, Nobuaki Kobayashi, the trustee overseeing the Mt. Gox estate, extended the deadline for repaying its creditors by a year to October 31, 2024.