Bitcoin slips in wake of failed $9B crypto exchange

Administrators are dealing with the collapse of the Mt. Gox exchange.

Bitcoin fell as traders monitored transfers by wallets belonging to the failed Mt. Gox exchange, whose administrators have been stepping up efforts to return a $9 billion hoard of the largest digital asset to creditors.

The original cryptocurrency dropped as much as 3.1% and was trading at about $67,850 as of 3:14 p.m. Tuesday in Singapore. The weakness spread to smaller coins, including second-ranked Ether.

Virtually all of the more than 137,000 Bitcoin worth over $9.3 billion held in Mt. Gox wallets was moved starting early Asian hours on Tuesday, according to data from CryptoQuant and Arkham Intelligence.

Once the world’s biggest Bitcoin exchange, Tokyo-based Mt. Gox was hacked in 2011 and went bankrupt in 2014. Last year, US prosecutors accused two Russian nationals of conspiring with others to break into the exchange’s servers.

Mt. Gox’s trustee has said creditors should see base, intermediate and early lump-sum payments by Oct. 31 as the winding-up process progresses. One key question is whether those who receive the tokens will sell, pressuring Bitcoin.

Tuesday’s movements in Mt. Gox wallets are the first since May 2018, and the fallen platform earlier held about 137,892 Bitcoin, CryptoQuant data shows.

Prior documents indicated Mt. Gox also had Bitcoin Cash and fiat money. Some of the fiat money has already been returned. Bitcoin Cash shed as much as 5% on Tuesday.

Caroline Bowler, Chief Executive Officer of BTC Markets, said the movements aren’t overly concerning and will only have a short-term impact. “Mt Gox would certainly nudge the price but it won’t have an entrenched impact on Bitcoin’s price as the broader market is now focused on the bipartisan support coming from US lawmakers around crypto-friendly regulations,” she added.

Bitcoin recovered from a deep 2022 bear market by quadrupling since the start of last year, helped by the launch of spot-Bitcoin exchange-traded funds in January. The token reached a record $73,798 in mid-March.