On-Chain Insights #6: Bitcoin Holdings of the Mt. Gox Trustee

Link to Mt. Gox Bitcoin Tracker Dashboard: https://dune.com/21co/mt-gox-bitcoin-tracker

Link to all of our On-Chain Dashboards: https://dune.com/21co

TL;DR

• Mt. Gox repayment: The repayment of Mt. Gox’s assets (~142k BTC, ~143k BCH, and 69 billion JPY) to its creditors has been long-awaited in crypto markets, with repayments expected to take place before October 31, 2023.
• Historical transactions: The last recorded outflows of the Mt. Gox trustee occurred in April-May 2018, amounting to ~24.22k BTC worth ~$219 million at the time of transfers.
• Current Bitcoin balance: We were able to track 137,891 BTC worth ~$4.13 billion as of April 12, 2023, belonging to the Mt. Gox trustee, on Dune Analytics.
• Top Bitcoin holders: the Mt. Gox trustee controls about 0.71% of Bitcoin’s circulating supply as of April 12, 2023, making it one of the top Bitcoin holders.

Background

We recently released a dashboard tracking the Bitcoin holdings of the US government, which has seized at least 215k BTC since 2020 and controls about 1.06% of Bitcoin’s circulating supply. In this regard, another entity worth monitoring is the Mt. Gox trustee.

Jed McCaleb founded the first crypto exchange, Mt. Gox, on July 19, 2010. In 2011, he sold the site to French developer Mark Karpeles. Mt. Gox expanded the usage and recognition of Bitcoin by making it accessible to the mainstream for the first time. It was the world's largest crypto exchange when it filed for bankruptcy in February 2014. Mt. Gox said around 750k of its customers' BTC and 100k of its own BTC were stolen, worth ~ $473 million near the time of the filing. At $30,000 per BTC, the value of the lost 850k BTC would be $25.5 billion.

Creditor claims

Investors who had a balance in BTC or any fiat currency when Mt. Gox ceased operations were able to file a claim with the Mt. Gox trustee in charge of the bankruptcy procedure. There were 23,267 recognized creditors, with total claims amounting to $18.6 billion. After nine years, the Mt. Gox trustee is expected to make repayments in 2023. The Mt. Gox trustee’s balance sheet contains 141,686 BTC, 142,846 BCH, and 69.7 billion JPY (~$510 million). At $30,000 per BTC and $130 per BCH, creditors can expect a repayment of around $4.4 billion or 24% of the total claims.

Source: Blockchain Research Lab

Coverage

1. Mt. Gox trustee transaction history.
2. Mt. Gox trustee cumulative balance denominated in BTC and USD.

Our dashboard should be interpreted as a lower-bound estimation of the Mt. Gox trustee's BTC holdings based on publicly-known addresses. Sources: TokenUnlocks, CryptoGround

Key Takeaways

1. The first recorded inflows of the wallets controlled by the Mt. Gox trustee date back to June 6, 2014, amounting to ~162k BTC.

The inflows occurred about three months after Mt. Gox filed in Tokyo for bankruptcy protection. On April 24, 2014, the Tokyo District Court issued an order to commence bankruptcy proceedings and appointed attorney Nobuaki Kobayashi as the bankruptcy trustee.

Figure 1: Mt. Gox trustee cumulative balance (BTC and USD Value)

2. The last recorded outflows of the Mt. Gox trustee occurred between April and May 2018, amounting to ~24.22k BTC worth ~$219 million at the time of transfers.

The amount and dates observed coincide with an announcement posted on the Mt. Gox website on September 25, 2018, which stated that Nobuaki Kobayashi, the Mt. Gox trustee, liquidated 24,658 BTC and 25,331 BCH between a creditors' meeting on March 7, 2018, and the start of the "Civil Rehabilitation Proceedings" on June 22, 2018. According to the filing, the sale's proceedings amounted to ~25.97 billion Japanese yen, which was paid into the bankruptcy trustee's account.

Figure 2: Mt. Gox trustee transaction history

3. The current estimated Bitcoin balance of the Mt. Gox trustee is 137,891 BTC, worth about ~$4.13 billion as of April 12, 2023.

We estimate that the Mt. Gox trustee owns about 0.71% of Bitcoin’s circulating supply as of April 12, 2023. The Bitcoin holdings of the Mt. Gox trustee were worth a little over $9 billion at their peak in November 2021.

Figure 3: Mt. Gox trustee estimated balance

Closing Thoughts

The repayment of Mt. Gox’s assets to its creditors has been long-awaited in crypto markets, sparking fears among investors regarding the potential impact of the supply shock once it happens. On April 7, 2023, an announcement on the Mt. Gox website stated that the deadline for creditors to provide their repayment information had passed. The document clarified that the trustee needs to “carry out the necessary preparations to make the repayment,” so it is expected to take a few months before the repayment starts. Notwithstanding, the base, intermediate, and early lump sum repayments are scheduled before the October 31, 2023, deadline. Investors can use our dashboard to monitor the wallets the Mt. Gox trustee controls in real-time.