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Author Topic: BitPay's integrity. Can they be trusted? What's next?  (Read 1125 times)
Gleb Gamow
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September 19, 2015, 05:39:23 PM
 #21

Just finnished reading this news, well, it sounds too good to be true. It seems as if BitPay's CFO and CEO are using 'a hacker,' as a scapegoat for the loss of over $1.8 million worth of BTC.

With BitPay following similar trails as the Mt. Gox scandal, can they and their integrity truly be trusted in the foreseeable future?

Source: Bizjournals

seeing how they been operating seemingly flawlessly since the loss for almost a year now... i think it safe to assume they will continue to provide good services.

it's not unimaginable that they could take such a loss and still be solvent, and i think it would be hard for them to practice fractional reserves banking since unlike MTGox they don't hold customer BTC very long and do next day cash settlements.

some info seguest they have patched this security hole.

everyone seems quick to call them stupid for walking into a phishing attack. I think this security hole ( trusting CEO emails ) was an oversight on a otherwise tight and secure system, being the largest in the space i can imagine there have been many hackers trying to hack it... bitpay has been around for a Long time, and this is the first hack they fell victim to.

i think their rep. has taken a hit, i trust their integrity, shit happens you live a learn..

hmm mtgox operated for months  before going belly up.

I suspect there is more than what meets the eye here with bitpay.


ya but on mtgox everyone had a "BTC balance" which they keep there for trading, with bitpay BTC are sent and $$$ are sent out the next day...

If they immediately change the BTC they are sent to $ then what were they doing holding a stack of $1.8 million worth of BTC. Was their float of small change bigger than that? They must be making massive amounts of money if all $1.8 million worth of BTC belonged to them.

I can understand people don't have a Bitpay "BTC balance" for appreciable lengths of time, but there must be a lag between BTC being sent and $$$ getting sent out. People do have a sort of Bitpay "BTC balance" during that lag, and Bitpay could dip into those balances for short periods, although not to the same extent as Gox did.

You keep forgetting all the VC funding capital that's in their coffer. Even if BitPay charged 1% - which they don't - for every single transaction, they would have to process $100,000,000 worth of bitcoins to earn $1M. I know it. You know it. BitPay knows it. And, the VCers know it. Yet, the latter invested tens of millions into the endeavor for what exactly? An ROI? An ROI on what, to echo - exactly? Somebody lost over $1.8M, and if not BitPay's customers or VC moneys, then where did the moneys come from that was lost? It wasn't from remittance for services rendered because, again, at a 1% fee, close to $200M worth of bitcoins would've had to change hands to amass the hack amount in their coffer, and that's if nary a satoshi were used for overhead during the past several years. Think about it!

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September 19, 2015, 06:31:29 PM
 #22

Just finnished reading this news, well, it sounds too good to be true. It seems as if BitPay's CFO and CEO are using 'a hacker,' as a scapegoat for the loss of over $1.8 million worth of BTC.

With BitPay following similar trails as the Mt. Gox scandal, can they and their integrity truly be trusted in the foreseeable future?

Source: Bizjournals

No... Well they shouldn't be atleast imo...

When you're dealing with millions of dollars with peoples money (or cryptos for that matter) you should be a little more secure than using your companies email address to sign up for some random thing you received from a random person.. That's just completely ignorant. I'm sure someone else will fill BitPay's void in a couple of weeks/month max.

Everyone should decide for themselves.

I personally do not trust them given the fact that they did not have multi-sig in place to hold each party involved for large (even medium) size transactions.

$1.8 million transfer warrants a first class ticket to any place on planet earth where your CEO and/or CFO and other important people are to verify those types of transactions FACE TO FACE.

yep!

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September 19, 2015, 06:35:11 PM
 #23

One day I'de like to be so rich I transfer a couple million with an irreversible transaction just by receiving an email, just do it!

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September 19, 2015, 08:07:07 PM
 #24

this happened 10 months ago so why are we making such a big stink over it now?

a bit late to panic and assume they're going out of business tomorrow.
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September 19, 2015, 08:18:12 PM
 #25

this happened 10 months ago so why are we making such a big stink over it now?

a bit late to panic and assume they're going out of business tomorrow.

You could have said the same for Gox before it went bankrupt. All those coins went missing years before, but some people said it was still running so there was nothing to worry about right up until the end. After it went bankrupt people who got burned advised others to keep monitoring any service they use, and watch for any tell tale signs that something's not right.

For months before it went down there were signs something was wrong at Gox, and Bitpay losing $1.8 million is a similar warning sign. They might remain solvent and keep on running, but that loss will be difficult to recoup.
Gleb Gamow
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September 19, 2015, 08:59:12 PM
 #26

this happened 10 months ago so why are we making such a big stink over it now?

a bit late to panic and assume they're going out of business tomorrow.

You could have said the same for Gox before it went bankrupt. All those coins went missing years before, but some people said it was still running so there was nothing to worry about right up until the end. After it went bankrupt people who got burned advised others to keep monitoring any service they use, and watch for any tell tale signs that something's not right.

For months before it went down there were signs something was wrong at Gox, and Bitpay losing $1.8 million is a similar warning sign. They might remain solvent and keep on running, but that loss will be difficult to recoup.

Bitstamp: We're releasing to the cryptocurrency community information pertaining to a successful email phishing attempt that drained our hot wallet of 5,000 BTC per pop, culminating to a lost of ~$5M worth of bitcoins.

BitPay: That's your prerogative. Us, we're keepin' mum about our email phishing episode - not as severe as yours occurring during the same time frame - from the community, opting to recoup some of our loses from the insurance company where nobody will be the wiser at the end of the day. BTW, tell Kodric that Krohn said howdy from somewhere in Georgia but not at the office, and he hopes that Luka is feeling better there is Slovenia: https://twitter.com/ilukeberry/status/542789637035802624


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September 19, 2015, 09:25:46 PM
 #27

I am afraid to even think about it, what would have happen if Bitpay would go down. We would have lost more than 80% of merchants. So they better be and stay trusted.

Anyways, as I understood, those $1,8 millions is their own money, correct? Then again if they hot hacked their money, in the same way they could have lost customers money as well.
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September 19, 2015, 09:26:19 PM
 #28

Incredible that coins are so easily drained from a supposedly premier league BTC company.

It's not another Gox in the sense of the amount of money tied up in it. I can't imagine there's a huge amount at any one time. It is however a big barometer for confidence.

If it goes down then that's not good. I think it's increasingly clear though that merchant adoption is a dead end at the moment. They can only limp on for so long.

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