Bitcoin price slumped to a five-month low of under $55,000 after the defunct exchange Mt. Gox confirmed that it has begun repaying creditors.
Mt. Gox begins repayment
On July 5, Mt. Gox’s Rehabilitation Trustee announced it has started repaying creditors through designated crypto exchanges according to the rehabilitation plan.
Eligible creditors will receive prompt repayments if they meet certain conditions. These include confirming the validity of registered accounts, accepting the intention to subscribe to an agreement by designated crypto exchanges, and completing discussions with the trustee.
This confirmation followed the failed firm’s movement of a substantial amount of Bitcoin in several transactions today. According to Arkham Intelligence data, Mt. Gox moved 47,228.7 BTC, valued at $2.71 billion, to a new wallet. The assets were subsequently transferred in several transactions, including 1,545 BTC, worth $85 million, to a wallet connected to the Bitbank exchange.
Meanwhile, crypto community members have welcomed this development as it ends Mt. Gox’s creditors’ 10-year wait for their digital assets. In 2014, Mt. Gox suffered a massive hack, losing 850,000 Bitcoin—valued at over $57 billion today. After the hack, Mt. Gox filed for bankruptcy and began rehabilitation proceedings in 2018 to compensate creditors.
Bitcoin crashes under $55K
Following the Mt. Gox repayment news, Bitcoin’s price fell more than 7.2% to $54,209. According to CryptoSlate’s data, this is the first time the asset has dropped below the $55,000 mark since February 2024.
Reports revealed that the decline triggered one of the largest liquidation events the industry has seen this year. According to Coinglass, crypto traders speculating on the price of digital assets on the market lost more than $675 million in the past 24 hours.
Long traders betting on a price increase lost approximately $578 million, while short traders have lost $98 million.
Bitcoin traders suffered the highest losses, with over $225 million liquidated in the past day. Ethereum traders saw liquidations totaling approximately $167 million. Notably, Bitcoin Cash, another digital asset involved in the Mt. Gox repayment, also saw about $3.8 million in liquidations.