Mt. Gox Trustee Denies Responsibility for Bitcoin Price Reversal

The trustee in charge of the assets belong to defunct bitcoin exchange Mt. Gox has denied that his decision to sell more than $400 million worth of bitcoin (BTC) and bitcoin cash (BCH) had a meaningful impact on the global cryptocurrency market.

In an announcement dated March 17, Nobuaki Kobayashi — the Tokyo lawyer in charge of managing the infamous Mt. Gox exchange’s estate during its bankruptcy proceedings — addressed concerns that his handling of the estate has been callous and has had a materially-detrimental effect on the market price of bitcoin.

Earlier this month, Kobayashi announced that he sold $406.6 million worth of bitcoin and bitcoin cash from the infamous exchange’s estate, adding that the estate still held approximately $1.7 billion worth of cryptocurrency assets. He also said that he had sold the coins on order-book cryptocurrency exchanges, rather than through the over-the-counter (OTC) markets that large-scale buyers and sellers generally use.

In Saturday’s statement, Kobayashi confirmed that he sold the coins between December and February — a period in which the bitcoin price plunged from nearly $20,000 to $6,000 — but he claimed that he did so in a way that did not have an effect on the market price of the assets.

“Following consultation with cryptocurrency experts, I sold BTC and BCC, not by an ordinary sale through the BTC/BCC exchange, but in a manner that would avoid affecting the market price, while ensuring the security of the transaction to the extent possible,” Kobayashi said. “Therefore, I believe that the sale of BTC and BCC by us did not affect their market prices.”

“I made efforts to sell them at as high a price as possible in light of their market prices at the time of sale. I believe that they were sold at a fair price, given the market prices at that time,” he added.

But though the Mt. Gox estate continues to hold nearly $2 billion in cryptocurrency assets, investors likely do not need to worry that these coins will be dumped onto the market — at least in the short-term.

As Bloomberg reporter Yuji Nakamura noted following the release of the initial statement, Kobayashi only sold enough coins to cover the exchange’s JPY liabilities.

He is now waiting for the court to rule on whether the exchange can enter civil rehabilitation, which would potentially allow the estate to distribute coins directly back to creditors — rather than selling them for cash and giving creditors the proceeds.

However, even if the court denies the civil rehabilitation plea, it would likely be several months before the trustee resumes selling the coins.

Featured Image from BitcoinWisdom

David Murray

David has been following the development of cryptocurrency technology for several years, and he is optimistic about its potential to democratize the financial system.

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