Coinbase Issues Joint Statement on Mt. Gox

Eric Calouro
By Eric Calouro February 24, 2014 22:12 Updated

Coinbase Issues Joint Statement on Mt. Gox

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Edited: Coinbase has retracted the world “insolvency” from their original post. The statement, published also at Blockchain.info, still contains the word in the title.

Edited: Blockchain.info has edited their title to remove the word “insolvency”.

An interesting blog post just crossed our news desk. It comes from Coinbase, who have just issued a joint statement relating to Tokyo-based Mt. Gox. The news comes just hours following a blogger’s post that the exchange lost thousands of bitcoins. The post was followed up with a “Situation crisis strategy“, which is not confirmed to be real.

At this time, it is being reported that trading at Mt. Gox has been halted. In addition, the website’s homepage is not loading.

“This tragic violation of the trust of users of Mt.Gox was the result of one company’s abhorrent actions and does not reflect the resilience or value of bitcoin and the digital currency industry,” the company wrote Monday evening. “There are hundreds of trustworthy and responsible companies involved in bitcoin. These companies will continue to build the future of money by making bitcoin more secure and easy to use for consumers and merchants.  As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.”

This is the first public declaration that the exchange — which has been facing major issues in terms of allowing users to withdraw funds — is insolvent. (See above updates)

The failure of the exchange to be transparent is now enough to have major exchanges come forth and prove their solvency.

In order to re-establish the trust squandered by the failings of Mt. Gox, responsible bitcoin exchanges are working together and are committed to the future of bitcoin and the security of all customer funds. As part of the effort to re-assure customers, the following exchanges will be coordinating efforts over the coming days to publicly reassure customers and the general public that all funds continue to be held in a safe and secure manner: Coinbase, Kraken, BitStamp, Circle, and BTC China.

“We strongly believe in transparent, thoughtful, and comprehensive consumer protection measures,” the company said. “We pledge to lead the way.”

Continued:

Bitcoin operators, whether they be exchanges, wallet services or payment providers, play a critical custodial role over the bitcoin they hold as assets for their customers.  Acting as a custodian should require a high-bar, including appropriate security safeguards that are independently audited and tested on a regular basis, adequate balance sheets and reserves as commercial entities, transparent and accountable customer disclosures, and clear policies to not use customer assets for proprietary trading or for margin loans in leveraged trading.  It does not appear to any of us that MtGox followed any these essential requirements as a financial services provider.

The statement is signed off by the following figures:

Fred Ehrsam — Co-founder of Coinbase, Jesse Powell — CEO of Kraken, Nejc Kodrič — CEO of Bitstamp.net, Bobby Lee — CEO of BTC China, Nicolas Cary — CEO of Blockchain.info, Jeremy Allaire — CEO of Circle

Could it be a sign of bad news to come on Tuesday?

Eric Calouro
By Eric Calouro February 24, 2014 22:12 Updated

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