Alistair Milne, the chief information officer (CIO) at Atlanta Digital Currency Fund, noticed earlier today that the Mt. Gox trustee moved 2000 BTC ($17.7 million.). Via Twitter, the self-proclaimed Bitcoin evangelist shared the image below as proof of his claim.
The entrepreneur and investor then tweeted that 16,000 BTC from Mt. Gox ended up on an address, adding that it’s unclear whether the funds were sold or just moved.
— Alistair Milne (@alistairmilne) April 26, 2018
Soon after the tweet was published, a number of Twitter users began commenting and speculating on what might have been the possible reason behind this move. Before looking more closely into this recent matter, let’s do a quick recap of the events that transpired a number of years ago, when Mt. Gox was reportedly hacked.
Mt. Gox Cryptocurrency Exchange
The Mt. Gox cryptocurrency exchange, as most crypto watchers would know, was reportedly hacked back in 2014. Many of the details regarding what actually happened were unclear. Due to the hack, the company announced that 850,000 bitcoins, valued at roughly $450 million at the time, had gone missing. It was then revealed the coins had probably been stolen. Largely because of this incident, the company halted all trading on its platform and even shut down its website.
This move was followed by the company filing for bankruptcy protection and in April 2014, it started liquidation proceedings. As one would expect, this notorious incident sent serious shockwaves throughout the tiny crypto ecosystem that existed at that time.
For quite a while, what really happened remained unclear, but it was revealed that somehow 200,000 Bitcoins were supposedly “found”. It was not until April 2015 when Tokyo Security firm WizSec determined, after a detailed investigation, that “most or all of the missing bitcoins were stolen straight out of the Mt. Gox hot wallet over time, beginning in late 2011.”
It’s important to note that Nobuaki Kobayashi is the Mt. Gox bankruptcy trustee, and is reportedly holding 165,000 BTC and BCH. The total amount moved, based on the information shared above, surpasses $150 million. Current market value of the 16,000 BTC moved is roughly $141 million and the 16,000 BCH transferred is worth around $20 million according to data from CryptoCompare.
Crypto Market Volatility Expected
Generally speaking, whenever Mt. Gox has transferred coins from its wallet, it has adversely affected Bitcoin’s price. Based on the screenshots above and a Mt. Gox cold wallet monitor, it appears that 16,000 BTC and 16,000 BCH have been transferred to two different addresses.
As can be confirmed from the screenshot below, 16,000 BTC have been moved to the address specified below, while the rest were sent to another address.
Notably, this marks the first time since February that Mt. Gox has moved its digital assets and before this, its trustee had sold approximately $400 million worth of BTC and BCH back in March 2018. These massive selloffs led to dramatic price drops in the cryptocurrency market.
While speaking to Hard Fork, crypto trader Ivo Jonkers remarked:
“It appears that the Mt. Gox trustees have moved the funds to a wallet belonging to an exchange desk. The last time this happened, Mt. Gox proceeded to sell the funds at market rate, practically sending the entire market in the red.” Jonkers then added that the crypto market could probably go down again, because of this move.
It must be noted that there is currently no confirmation these addresses are linked to an exchange desk. Additionally, there is no information available on what the exact motive behind such a large transfer of digital assets. Some Twitter users had been speculating that the cryptocurrencies are about to be sold.