Flood of pay­outs ‘could crash Bit­coin mar­ket’

The Sunday Telegraph - Money & Business - - Front page - By Hasan Chowdhury

BIT­COIN in­vestors could face a fresh round of in­tense sell­ing pres­sure as a col­lapsed Ja­panese cryp­tocur­rency ex­change is forced to pay out coins worth $1bn (£765m), ex­perts warn.

The cur­rency, which has al­ready plunged in value from $17,035 in Jan­uary to $6,449, is set to slide fur­ther in the com­ing weeks as Mt. Gox, a bank­rupt Bit­coin ex­change, pays out thou­sands of coins to cred­i­tors.

Kim Nils­son, who has led a four-year cam­paign to re­claim his stake in the de­funct ex­change, said the flood of pay­outs threat­ens to “com­pletely crash the mar­ket”. The pay­outs to Mt. Gox cus­tomers who lost vast sums fol­lows an ex­tra­or­di­nary dig­i­tal heist by Rus­sian hack­ers in 2014.

Mt. Gox will distribute the 160,000 Bit­coins it holds to cus­tomers at cur­rent val­u­a­tions. In­vestors who lost money have un­til Oct 22 to file claims. That could trig­ger sales of Bit­coins worth $1bn.

A lack of will­ing buy­ers could ex­ac­er­bate the re­cent price crash, warned Mr Nils­son, a for­mer Mt. Gox cus­tomer who spear­headed the in­ves­ti­ga­tion into the ex­change’s bank­ruptcy.

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