Bitcoin windfall coming for Mt. Gox creditors after decade-long wait and 10,000% price spike
Users of collapsed bitcoin exchange Mt. Gox have been trying to get their money back for a decade. From the beginning of July, the company will begin paying users back their funds.
Kiyoshi Ota | Bloomberg | Getty Images
Mt. Gox, the Japanese bitcoin exchange that collapsed into bankruptcy a decade ago after a major hack, is finally set to repay creditors, who are being rewarded handsomely for their patience.
Up to 950,000 bitcoin were lost in the 2011 hack, at a time when the cryptocurrency was trading for a tiny fraction of its current value. Some 140,000 of those coins were recovered, a haul that, at today’s prices, means that roughly $9 billion worth of bitcoin will be returned to its owners.
Among the claimants is Illinois native Gregory Greene. Soon after the exchange declared bankruptcy in February 2014, Greene filed a class action lawsuit against Mt. Gox and its former CEO. Greene said at the time that his frozen account contained $25,000 in bitcoin, though he didn’t disclose the exact number of coins in his wallet.
Bitcoin was then trading at roughly $600. Today it’s worth over $60,000. That suggests Greene’s lost stash, at current prices, would be worth about $2.5 million, a 10,000% gain. However, it’s unclear how much he’ll receive in the payouts, which are expected to start rolling out in July.
John Glover, chief investment officer of crypto lending firm Ledn, said creditors are about to get a historic windfall.
“Many will clearly cash out and enjoy the fact that having their assets stuck in the Mt. Gox bankruptcy was the best investment they ever made,” Glover told CNBC.
What was Mt. Gox?
Mt. Gox was an online marketplace where people could buy or sell bitcoin using different currencies. At the height of its success, the platform was the largest spot bitcoin exchange in the world, claiming to handle around 80% of all global dollar trades for bitcoin.
The company, whose acronym was created from the name “Magic: The Gathering Online Exchange,” shuttered in February 2014 after a series of heists.
Mt. Gox blamed the bitcoin disappearance on a bug in the cryptocurrency’s framework. While users were receiving incomplete transaction messages when accessing the exchange, in reality coins may have been illicitly moved by hackers out of their accounts, Mt. Gox said.
On Monday, the court-appointed trustee overseeing the exchange’s bankruptcy proceedings said distributions to the firm’s roughly 20,000 creditors would begin next month. Disbursements will be in a mix of bitcoin and bitcoin cash, an early offshoot of the original cryptocurrency.
Alex Thorn, head of research at crypto asset management firm Galaxy Digital, said in a note last month that the vast majority of creditors he’s spoken with have said they will take a payout in-kind, meaning in cryptocurrency rather than fiat. They’ll also be largely holding on to the assets.
Many of the top holders with claims to Mt. Gox assets, he said, are well known in the bitcoin world. They include early bitcoin investor Roger Ver, Blockstream co-founders Adam Back and Greg Maxwell, and Bruce Fenton, former executive director of the Bitcoin Foundation.
Some will ‘take the money and run’
Based on conversations with institutional investors due for payouts, “we do not believe there will be significant selling from this cohort,” Thorn wrote.
However, Glover, who was previously a managing director at Barclays, said there’s still likely to be significant selling among creditors who, after years of waiting, have the opportunity to lock in massive gains.
“Some will clearly choose to take the money and run,” said Glover.
Analysts at JPMorgan Chase said the potential for heavy selling from Mt. Gox creditors creates “downside risk” next month, though it would be short-lived.
“Assuming most of the liquidations by Mt. Gox creditors take place in July, [this] creates a trajectory where crypto prices come under further pressure in July, but start rebounding from August onwards,” the analysts wrote.
There’s also the likelihood that a number of bitcoin investors in Mt. Gox have already cashed out. In the 10 years since the exchange filed for bankruptcy, a secondary market sprung up for those who wanted to liquidate their bankruptcy claim. Those who have held out are the true believers, Thorn said.
“Thousands of these creditors have waited 10 years for payouts and resisted compelling and aggressive claims’ offers during that time, suggesting they want their coins back,” said Thorn. He said he expects limited selling pressure but acknowledged that if even 10% of the bitcoin distributed is sold “it will have a market impact.”
Certain tax consequences may deter sales.
Luke Nolan, ethereum research associate at digital asset management firm CoinShares, said a big reason Mt. Gox creditors opted for in-kind reimbursement has to do with the tax implications. And JPMorgan said in a note on Monday that people are leaning toward accepting their disbursement in crypto, “either for tax reasons or because they think that liquidating now would void potential further price gains in future.”
Glover said there are ways to sidestep a big capital gains tax while still taking advantage of bitcoin’s huge run-up in value.
“Those in jurisdictions with capital gains tax may elect to hold their positions to avoid this huge tax bill,” Glover said, “and instead use their bitcoin as collateral to borrow dollars, thus monetizing the bitcoin without having to sell it.”
With over 20,000 electric vehicles delivered (again) last month, NIO broke its monthly and quarterly records. The surge comes with new models rolling out as NIO aims to expand the brand.
NIO sets new monthly, quarterly delivery records in June
NIO delivered 21,209 vehicles last month, nearly double (+98%) that of June 2023. The growth was enough to top its previous monthly sales record, set in May with 20,544 deliveries.
After its second straight month with over 20,000 deliveries, NIO broke both of its monthly and quarterly records.
NIO’s EV deliveries reached 57,373 in the second quarter of 2024. That’s up 143% compared to Q2 2023. It was also enough to beat the previous record with 55,532 deliveries in Q3 2023. NIO expected between 54,000 and 56,000 deliveries in Q2, topping its guidance.
The delivery surge is due to rebounding auto sales in China, new models rolling out, and pricing adjustments.
After launching the new ET7 in April, NIO’s entire lineup has been updated. NIO’s lineup includes the 2024 ET5, ET5T, EC6, ES6, EC7, ET7, and ES8, all based on its NT 2.0 platform.
NIO also revealed its new low-cost Onvo L60 last month. The electric SUV is the first of NIO’s new Onvo mass-market brand aimed at Toyota and Volkswagen. NIO’s new Onvo L60 starts at $30,500 (219,900 yuan) as a potential Tesla Model Y rival.
The Onvo L60 will launch in China in September. With deliveries also kicking off this fall, the new electric SUV is expected to help boost sales even further.
With plans to launch a larger electric SUV under the Onvo brand next year, NIO expects the momentum to continue into 2025.
Despite this, NIO is bracing for additional tariffs placed on Chinese EV imports in Europe. NIO believes its third brand, Firefly, will remain competitive in the region even with tariffs.
NIO’s new quarterly and monthly delivery records come as China’s largest EV maker, BYD, also set a new NEV sales record in June.
Following the news, NIO’s stock is up 8% on Monday. However, NIO shares are still down over 47% in 2024 and 55% over the past 12 months.
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EV battery maker SK On has signed a non-binding agreement to buy lithium from ExxonMobil’s first planned extraction project in Arkansas.
Sk On and ExxonMobil’s big lithium deal
Sk On and ExxonMobil signed a non-binding memorandum of understanding (MOU) that has the potential for a multiyear offtake agreement of up to 100,000 metric tons of lithium.
South Korea-headquartered SK On will use the lithium to manufacture EV batteries in the US. It has two battery-making factories in Georgia, and it’s building four more battery factories jointly with automakers. SK On supplies its US-made EV batteries to Hyundai, Volkswagen, and Ford (their BlueOval SK Battery Park image is above).
In November 2023, ExxonMobil announced that it was drilling its first lithium well in southern Arkansas after it acquired rights to 120,000 gross acres of the Smackover Formation, one of North America’s most plentiful lithium resources.
The Arkansas project will extract lithium from underground saltwater deposits and convert it into battery-grade material onsite. Exxon asserts that this method will produce lithium more efficiently and with fewer environmental impacts than traditional hard rock mining.
ExxonMobil set a goal in late 2023 to supply lithium for around 1 million EV batteries annually by 2030, and it’s targeting 2027 for first production.
Electrek’s Take
This is good news for the US EV industry and for building a domestic supply chain.
ExxonMobil has a net zero by 2050 plan. However, a significant weakness in the company’s strategy is focusing only on Scope 1 and Scope 2 emissions from its operations and the energy it consumes. The fossil fuel giant’s plan doesn’t address Scope 3 emissions consumers produce using ExxonMobil’s fossil fuel products. Scope 3 emissions often represent the largest share of oil and gas companies’ total carbon footprint.
Out of the five Western oil giants, Exxon is the only company that hasn’t set Scope 3 targets. In fact, sued its climate activist investors to block their Scope 3 target proposal from going to vote at its annual investor meeting.
So ExxonMobil’s pursuit of lithium extraction isn’t because it cares about reducing its emissions. It’s because it’s a good business move, it knows how to extract things from the earth, and it knows the EV revolution isn’t going to slow, so it’s getting on the bandwagon. Hey, whatever it takes.
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Kia’s new low-cost electric SUV has already secured over 10,000 reservations in its home market. Kia sees the EV3 as a potential “game changer” with climbing demand for affordable electric options.
Kia EV3 gets 10,000 reservations in under a month
Despite its compact size, Kia’s new EV3 is expected to have a significant impact on the brand. The EV3 is part of Kia’s new series of mass-market EVs.
The EV3 is a compact electric SUV revealed during Kia’s first annual EV day in October. Featuring Kia’s new “Opposites United” branding, it combines the tech and design of its larger EV9 with a smaller, more affordable package.
After opening orders in South Korea on June 4, 2024, the EV3 has already secured over 10,000 reservations.
Kia’s EV3 starts at just $30,700 (KRW 42.08) before tax benefits. With incentives, Kia’s EV3 starts at around $29,200 (KRW 39.95 million).
Jeong Won-Jeong, vice president at Kia Corp, revealed that EV3 reservations topped 10,000 in just 23 days. Kia’s VP said the new compact EV will be a “game changer” in its home market.
Based on Hyundai’s E-GMP platform, the EV3 gets up to 311 mi (501 km) range in Korea. Meanwhile, the standard range gets up to 217 mi (350 km).
The EV3 joins the EV6 and EV9 in Kia’s lineup, which will be strengthened by the launch of the EV4 and EV5 next year. Kia said it aims to sell 18,000 EV3 models in Korea by the end of the year.
| Kia EV3 trim | Range | Starting Price | Starting Price After Incentives |
| Standard | 217 mi (350 km) | $30,700 (KRW 42.08 million) | $29,200 (KRW 39.95 million) |
| Earth | Standard: 217 mi (350 km) Long Range: 311 mi (501 km) |
$33,400 (KRW 45.71 million) | N/A |
| GT Line | Standard: 217 mi (350 km) Long Range: 311 mi (501 km) |
$34,100 (KRW 46.66 million) | N/A |
| Long Range | 311 mi (501 km) | $34,100 (KRW 46.66 million) | $32,200 (KRW 44.15) |
The EV4 is Kia’s take on an entry-level electric sedan. Ahead of its official debut, the EV4 has been spotted testing in public (check out the rear end in this video).
Kia’s electric car is expected to hit the market at around $35,000 next year. It will likely launch the EV4 domestically ahead of the US and Europe.
Electrek’s Take
While most automakers plan to launch more affordable EVs, Kia is ahead of the game. Although 10,000 may not seem huge compared to the 68,000 reservations Rivian’s R2 secured in under 24 hours, this is only in Korea. As the EV3 hits new markets, Kia expects to see strong demand.
The EV3 will compete with Volvo’s EX30, starting at $35,000, and several other similarly priced models from China and Europe.
What do you guys think? Would you buy Kia’s EV3 for $30,000? Let us know in the comments below.
Source: Consumerwide
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