Gox exchange trustee announced that the victims have agreed to a $ 8.5 billion redistribution package.
This will return around 141,000 bitcoins to investors that were lost after the biggest hack in history in February 2014. While this is welcome news for victims, it still only accounts for a fraction of bitcoins.
However, the return of some bitcoins will end the long story. Also, since the price of BTC was around $ 550 at the time of the hack, the victims are still very profitable in terms of dollars overall.
At the same time, some analysts have raised concerns about what the spike in supply might have on the price of Bitcoin.
MT. Gox was once the largest bitcoin exchange
The Mt. Gox hack caused a stir in the crypto community in 2014 after 740,000 bitcoins from investors and around 100,000 from Mt. Gox. In terms of severity, it has been compared to the Bear Stearns collapse during the 2008 financial crisis.
It highlights the risks associated with trading cryptocurrencies, all the more since inappropriate protocols were the norm at the time.
Critics have taken note of the incident and say that cryptocurrencies do not offer the same level of protection as banks. For example, the US Federal Deposit Insurance Corporation insures up to $ 100,000 held in a UK bank account or financial services compensation scheme up to £ 85,000.
As the largest Bitcoin exchange at the time, many assumed that the hack would mean the end of Bitcoin. Subsequent investigations uncovered company mismanagement, post-attack bankruptcy, poor segregation of duties, and outdated software controls.
How could the market react?
The redistribution proposal provides that victims can claim compensation from October 20. However, there is no confirmation of when the payments will be made.
“Victims can choose to receive around 90% of the property under the proposal, which was approved by the majority, according to the English version of the October 20th notice.”
Even so, Avi Felman, a portfolio manager at BlockTower Capital, said settlement dates can create volatility in the market as victims take profits.
“It is the day that every market participant has to keep an eye on. There will likely be significant volatility around the event and if Bitcoin gets too hot it could hit a local high as holders can finally benefit from their positions. ”
Likewise, Lark has Davies tweets that the return of over 140,000 bitcoins will add “a lot of selling pressure” to the market.
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According to Cryptoslate