One of the Mt. Gox’s Bitcoin wallets were reactivated

A 5,000 Bitcoin transaction made a few days ago was allegedly traced to a wallet belonging to Mt. Gox.

Referring to the work of a well-informed OXT user, bitcoin .com is much closer to the mark than Coindesk.

Despite a Kraken deposit, these coins are not sourced from Kraken.

However, they are taken from Mt. Gox and possibly controlled by Jeb McCaleb. pic.twitter.com/oYuVsGSgyI

— 🏴∴Ergo∴🏴 (@ErgoBTC) 3 September 2022

This was revealed by researcher ErgoBTC, who even goes so far as to associate that wallet with Jed McCaleb.

The history of the famous Mt. Gox exchange

McCaleb founded Mt. Gox as far back as 2006, which was before Bitcoin was born. At that time, the exchange apparently did not trade cryptocurrencies, but cards from the famous game “Magic: The Gathering Online.”

In 2010, the ability to buy and sell Bitcoin was added, and in 2011, McCaleb sold the exchange to Mark Karpeles. In 2014, Mt. Gox went bankrupt, and Karpeles was subsequently imprisoned.

McCaleb had no role in the failure of Mt. Gox, partly because in 2011 he was among the founders of Ripple, and later in 2014 he founded Stellar.

Mt. Gox’s Bitcoin wallet that “woke up”

The Bitcoin wallet in question was created in December 2013, which is when Mt. Gox was still operating, but McCaleb was no longer a part of it then.

Among the BTC stored in it are also some from the Kraken exchange, so it was believed to be precisely a wallet connected to this exchange. However, according to ErgoBTC, it is instead linked to Mt. Gox and Jed McCaleb. It is worth mentioning that in 2013, Mt. Gox still the only and absolutely dominant exchange in the crypto marketsso it’s more than likely that McCaleb was still using it, since neither the Ripple project nor Stellar had their own major exchange.

ErgoBTC cites a post from Telegram channel GFiS where they actually speculate that some Mt. Gox Bitcoin was recently moved.

It is worth mentioning that a a few days ago Mt. Gox’s bankruptcy trustee let it be known that they are about to begin the process of repaying creditors.

It will probably be a long process, and it will be divided into two phases.

During the first phase, they will pay back in fiat currency those creditors who have explicitly requested to be paid in fiat. However, since the now bankrupt company does not have sufficient fiat currency in cash, it will necessarily have to sell BTC and BCH to raise fiat currency to repay creditors in this first phase.

In fact, it already sold some BTC some time ago. In fact, according to reports, after it closed its doors due to a colossal theft, around 200,000 BTC were found in an old cold wallet. However, the bankrupt recently stated that the company still owns about 140,000 BTC, so over the years the remaining 60,000 BTC must have been sold on the market.

The liquidation of a portion of Bitcoin from Mt. Gox

It is possible that this sell-off dates back to late 2017, or early 2018, when the previous post-halving speculative bubble burst.

At that point, in fact, the curator realized that the market value of Mt. Gox’s still available BTC could have covered all the creditors’ claimsi.e. the fiat value of customers’ cryptocurrencies held by the exchange at the time of its closure.

It certainly seems that he decided to take advantage of this by selling part of the BTC so that he could lose money in order to pay back his creditors in fiat.

He sold just under a third of them, but it is not known at what price. If, for example, the average sale price had been around $10,000, the number touched upon at the end of the bubble burst in February 2018, he would have collected approx. 600 million dollarsor much less than the creditors asked for in total.

While it is not known how many of these have requested to be repaid in fiat, it is safe to assume that $600 million may not be enough, and even if it was anything more, it probably still wouldn’t be enough.

For this reason, there are those who speculate that the recipient will be forced to liquidate more BTC in order to lose sufficient funds in fiat to repay creditors in the first phase. The remaining BTC and BCH will be distributed to the remaining creditors in a second phase in relation to their claims.

The hacker attack on the stock exchange in 2011

GFiS points out that in recent days some rather unusual transactions of 5,000 BTC each have occurred on a 2013 wallet. One of the chat users linked that wallet to the cyber attack on Mt. Gox in the summer of 2011.

In fact, before the exchange went bankrupt in 2014, the exchange had suffered another attack in 2011. The wallet is from 2013, but going back on the blockchain, it appears that the Bitcoin deposited into it in 2013 had something to do with the 2011 attack do.

This would involve wallet 1McU8D7g, which received 134,000 BTC from Mt. Gox right around the time of the 2011 attack.

GFiS speculates that the recent transactions have something to do with the police investigation into the attack.

So while that wallet appears to be somehow connected to Mt. Gox, it does not appear to be connected to the process of paying back creditors.

Why would the new Bitcoin wallet be in any way connected to Jed McCaleb?

Theoretically, it would be linked to an earlier affair involving the stock exchange several years before its bankruptcy, at a time when Jed McCaleb had recently sold the exchange to Karpeles.

However, at this point it is unclear why ErgoBTC is linking this wallet to McCaleb.

Unless he’s speculating that the former founder, who has since moved on to Ripple, was behind the 2011 attack. This hypothesis actually seems a bit far-fetched, so much so that it might be best to ignore it.

In reality, the hypothesis of GFiS is also not to be considered confirmed, but if nothing else it is clear public clues that support it.

If this hypothesis were true, the recent movements of the wallet in question could have nothing to do with the repayment of Mt. Gox creditors, although in theory there may be a connection.

If these were indeed, as GFiS suspects, moves made by law enforcement, and not by the hackers who had stolen the BTC from Mt. Gox in 2011, it would be possible to imagine that this could also be another attempt to recover funds taken from Mt. Gox.

We are talking about 5,000 BTC out of a total of 140,000 still in the possession of the bankruptcy trustee, a significant amount but probably not making a difference.

However, it cannot be ruled out that law enforcement also finds other funds related to the theft in 2011. In fact, 25,000 BTC were stolen at that time, a figure that could also have some impact on the creditor repayment process if it was recovered in full. In total, they will be worth approx 500 million dollars at current market values, which is equivalent to what can be assumed to have been collected between 2017 and 2018 by selling the missing 60,000 BTC.

However, there is still no record of any possible recent movement of BTC still in the possession of the bankruptcy trustee, in part because the trustee needs explicit permission from the judge to move them. While there’s no way to know the judge’s rulings unless the receiver decides to make them public, at this point it’s safe to assume he hasn’t yet begun moving them.

Given that during the first phase of redemptions he will be forced to sell some of them in the market, perhaps a bit hastily, it is possible that when he starts to do so, the market price may be somewhat affected, even if these transactions are done via OTC.