They are expecting everyone to withdraw as soon as they open. They better repurchase 18k coins before they re-open, or no one will trust them when they can't process the withdrawals.
They need $5 million to reopen. Do they have it? Can they raise it? That's the big question. Agreed, also they need to fix whatever problem they had/have and ensure it stays fixed. Either or both of these could take some time. No, that's not a valid excuse. They could start withdrawals even if they can't handle trades yet. Some Bitstamp creditor in the UK needs to make a statutory demand for payment, to start the 21-day "pay or else" clock under British law. |
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We need a booming bitcoin derivative market, where we can take punts with margin money. A derivatives market requires reliable counter-parties. Bitcoin doesn't have that. |
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7 hours later, didn't happen. I belive it will be up soon  9 hours later, didn't happen. |
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25 hours later, still down. Bitstamp's announcement of setting up a duplicate site in San Francisco reminds me of Mt. Gox claiming their "new trading engine" would fix their problems. That was just an excuse for stalling. |
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 Bitstamp booth at CES, yesterday.Looks like they never made it to Vegas. Where is their CEO right now? |
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Not clear how real this is. Many traders have assets stuck on Bitstamp and are out of the market for now.
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7 hours later, didn't happen. |
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They are expecting everyone to withdraw as soon as they open. They better repurchase 18k coins before they re-open, or no one will trust them when they can't process the withdrawals.
They need $5 million to reopen. Do they have it? Can they raise it? That's the big question. |
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... owners/scammers all just follow the same wordpress template during the situation:
*insert 'down for maintenance page'
*insert 'we have been attacked, please allow us time to address the issue' splash page message
*insert 'we assure your old funds are safe, please bear with us' update message
*insert 'we are terribly sorry but due to the losses we have to close up shop as we are insolvent' finality message, as you strung along users for over a month with enough time to flee your native country, change your legal name, and enjoy your millions you scammed from your own users Painfully true. We never seem to hear "We've brought in outside accountants, and here they are, and here's their full audit report", or "we've brought in the police, and here's Detective ABC, who will report on the status of the investigation", or "immediate refunds are available by contacting the lawyers who are managing our shutdown". I urge anyone in the UK with substantial money in Bitstamp to use the "statutory demand" procedure to compel them to pay up. From the UK goverment web site: You can make a statutory demand to ask for payment of a debt from an individual or company.
Anyone who’s owed money can make a statutory demand and you don’t need a lawyer.
When someone receives a statutory demand, they have 21 days to either settle the debt (or) reach an agreement to pay.
If they don’t make an agreement, you can start ... winding up a limited company that owes more than £750.This is a big hammer. You can take Bitstamp into liquidation if they don't pay up. The UK is a "pay up or else" country. The UK used to have debtors prisons, and while they've lightened up a bit on debt enforcement in the last century, they're still tougher on debtors than the US or Japan. (Ireland is even tougher.) You can only do this if you have an address in the UK, though. Otherwise, you need a lawyer in the UK. |
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No indication of what they mean by "resume operations", though. If they resume withdrawals with no restrictions, they may be OK. If they resume trading or deposits but restrict withdrawals, this is Mt. Gox again. |
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Or they could operate using fractional reserve method, a 90% reserve is still much much better than any banks which only have 10% of client money at hand.
That's not what "fractional reserve" means. For a bank, a loan is an asset - someone owes them money. Banks get into trouble when many loans go bad, as happened when the real estate bubble popped. Or they get into trouble if they have short-term deposits and long term loans, and too many depositors want their money out at once. That's not Bitstamp's situation. They don't own 30-year mortgages. They have no big illiquid assets they can sell off. They have nothing except their customer balances, and, according to their financial statement filed with Companies House, a few hundred thousand in paid-in capital. Bitstamp needs $5 million within days, or they're going into bankruptcy. |
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Yes, they lost money. That doesn't mean they lost your money. They lost their hot wallet, but have much more funds in their cold wallet. They don't have any problem, paying back to their customer.
There was some user who was saying similar reassuring things about Mt. Gox all the way up to the bankruptcy. Who was that, and where are they now? |
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So you are assuming they have $5million laying around of their own funds to do this?
I doubt it.
That, indeed, is the problem. They have to come up with $5 million to reopen. They can't reopen without the money. If and when they allow withdrawals again, everybody is going to take their money and Bitcoins out. If they try to pull some of the stunts Gox pulled about stalling withdrawals, this thing will come unglued even faster. Bitstamp is a UK company. UK bankruptcy laws are much more pro-creditor than US or Japan bankruptcy laws. As soon as a company owes you money and isn't paying its debts, you can file a "statutory demand" The company has only 21 days to pay before you get to go to court to have them forced into liquidation. Any creditor of Bitstamp can do this. Tomorrow morning, if they want. There's also a UK court procedure for a "money claim", for amounts up to £100,000. This is only available if you have an address in the UK. That can be done on-line. You have to send a letter demanding payment first, but you only have to wait 14 days before filing a money claim. Don't wait. That didn't work out with Mt. Gox. |
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If they lost $5 million in customer funds, Bitstamp will probably not reopen in its old form. They only had $600K in capital last year. Here are their options:
1. Reopen insolvent. Just reopen as if nothing had happened, but without enough money to pay everybody. Hope that not too many people ask for their money back. Stall if they do. This was the Mt. Gox strategy starting in June of 2013. If Bitstamp tries that, it won't end well.
2. Raise at least $5 million in capital. They might be able to get that from a venture capitalist. A VC would insist on putting in some real financial controls. But is the revenue there? Running a Bitcoin exchange isn't really that profitable. We know how little Mt. Gox actually generated in profits before they got into trouble.
3. Get bought out by someone bigger. Selling the company to a bigger financial company, which would take over operations, might work out. But none of the wannabe Mt. Gox buyers actually had any serious money. Nor do any of the Bitcoin exchanges.
4. Liquidate. Everybody gets back a pro-rata share of what they're owed, maybe 80-90%, and Bitstamp ceases to exist. Probably the best solution.
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You can hope they will return them, but very likely you won't receive back all of it. If you can get back 88% then consider yourself lucky. Is anyone setting up a secondary market in Stampcoins, like the one that was set up for Goxcoins? This means someone buying up Bitstamp accounts at a discount. The account holder gets, say, 75% now, and the buyer takes the risk of collecting. |
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Now bankrupt?
They lost 5 million out of 65 reported here. Not enough to go bankrupt  In an extreme scenario they could get more if they sold the company and the buyer would cover the loss. They don't get to cover their losses out of customer funds. If they lost $5M, and they have less than $5M of investor capital available, they are bankrupt. |
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Only morons got trapped by gox. Stamp is a long way off that kind of idiocy, and if they were heading that way there would be warning signs. That said, if something like that did happen it would indeed be cheap coin city.
With Gox, it was clear something was badly wrong when they had their two-week "hiatus" on withdrawals in June 2013. Especially when withdrawals did not resume. Anyone who sent them assets after that was an idiot. However, up until that "hiatus", it wasn't clear that Gox had major problems. The Gox bankruptcy was still 8 months away when the "hiatus" started. Gox supporters on this board kept insisting nothing was wrong right up to the bankruptcy. This time, don't be so patient. Demand withdrawals now, and if you don't get them, hire lawyers and raise hell early. There's no reason to expect that trouble at Bitstamp will have a huge effect on the price either way. It's likely to cut liquidity, volume and merchant adoption for a while, though. Selling large numbers of Bitcoins and reliably getting paid just got harder. |
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As a reminder, here's the first Mt. Gox notice when they stopped withdrawals:TOKYO - JAPAN - June 20th, 2013
Over the past weeks Mt. Gox has experienced rising volumes of deposits and withdrawals from established and upcoming markets interested in Bitcoin. This increased volume has made it difficult for our bank to process the transactions smoothly and within a timely manner, which has created unnecessary delays for our global customers. This is especially so for those in the United States who are requesting wire transfer withdrawals from their accounts.
We are currently making improvements to process withdrawals of United States Dollar (USD) denominations, and as a result are temporarily suspending cash withdrawals of USD for the next two weeks.
Please be reassured that USD deposits and transfers to Mt. Gox will remain unaffected, as will deposits and withdrawals in other currencies, and we will be resuming USD withdrawals once the process is completed.
We apologize for any inconvenience this causes our U.S. customers in the meantime, and look forward to resuming withdrawal service as well as debuting a dramatically improved trading engine which will be launching very soon.
Regards
Mt.Gox Co. Ltd Team.
That was the first of many excuses. Two weeks later, withdrawals did not resume. A few people were able to pry funds out of Mt. Gox after that date, but not many. On July 1, 2013, I wrote:The important thing is not to buy or sell, it's to get assets out of Mt. Gox if you can. If Mt. Gox is honest, they have 100% of the funds deposited, and taking assets out of Mt. Gox won't hurt them. If they're not... I'm saying the same thing this time. If there's any way you can get your assets out of Bitstamp, do it now. Do not delay. Use lawyers if necessary. |
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Bitstamp CEO probably on an extended vacation in his newly acquired island mansion in Dubai. No, Vegas: Bitstamp retweeted:Nejc Kodrič @nejc_kodric · 9 hours ago Due to circumstances I skipped my connecting flight and spend the night in NYC. I am flying to Vegas today to attend CES. |
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You see, on 2013 the price always going up. Reaching 2 amazing all time high. While on 2014 the price only decreasing. And now we're under $300, just like early 2013.
2013 had two Bitcoin bubbles - the Silk Road drug bubble and the China exchange controls evasion bubble. The Silk Road crowd is in jail, and the People's Bank of China cut off the air supply of the China bubble. Another bubble would require a new use case for Bitcoin. None was found in 2014. |
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