The next question is whether Bitstamp is now insolvent. They lost $5 million. Did they get new funding to replace that, did they have enough capital of their own, or are they dipping into customer funds? Their statements have carefully avoided mentioning this issue.
If a real stockbroker lost funds like that, and became insolvent (debts > assets), they would have to stop operations immediately. In some jurisdictions it is a felony for a broker to continue to accept funds once insolvent. They don't get to "fix it later". That's because, historically, the temptation to fix it by speculating with customer funds has been a big problem.
With withdrawals working again, it's probably a good idea to get your assets out of Bitstamp. Don't use them as a wallet. Trade there if you like, but empty out your account when not actively trading.
Bitstamp now needs a full audit by an outside auditing firm.
If a real stockbroker lost funds like that, and became insolvent (debts > assets), they would have to stop operations immediately. In some jurisdictions it is a felony for a broker to continue to accept funds once insolvent. They don't get to "fix it later". That's because, historically, the temptation to fix it by speculating with customer funds has been a big problem.
With withdrawals working again, it's probably a good idea to get your assets out of Bitstamp. Don't use them as a wallet. Trade there if you like, but empty out your account when not actively trading.
Bitstamp now needs a full audit by an outside auditing firm.
Agree, that's the missing part of the statement - how are they going to cover the lost funds? After all the shit from Mt Gox it would be nice if bitstamp were more transparent on this.
Although, if Pantera bailed them out, both sides may not be very keen on disclosing the details. And this part slightly suggest that this could be the case:
Quote
On a personal note, I’d like to thank the incredible teams at Bitstamp and at our lead investor Pantera Capital who have worked around-the-clock from multiple time zones in the last few days. I’m incredibly proud of the herculean work of this extended team, and grateful to the phenomenal show of support from customers, friends, and partners in the bitcoin community.
Hopefully they won't qualify for audit exemption in their 2nd year of trading.
