Bitcoin Companies Who Reimburse Losses Stay Alive

[Ezekial2517]

A recent blog post from Xapo called “What happens if Xapo gets hacked?” the company discusses the unfortunate Bitfinex heist that took place on August 2, 2016. Xapo says that if they were compromised the company would cover the losses from its own reserve. This is a glaring difference to the many exchanges that failed to reimburse their customers.

It will be interesting to see how Bitfinex fares after their losses as it was the biggest Bitcoin exchange heist since the demise of Mt Gox. It’s safe to say exchanges that don’t pay their customers back in full will discourage new users from entering the Bitcoin space.

https://news.bitcoin.com/bitcoin-reimburse-losses-stay-alive/

[franky1]

if xapo would cover losses of a hack with their own reserve. then i have 2 questions

1. why are they not securing customers funds in the same manner as their own reserves, for them to think customers funds could be lost but their reserves could not be

2. why if customers funds are just as secure as their reserves, would xapo think that their reserves would not also be taken, ni which case there are no funds left to cover customer losses.

in my eyes its either customer funds are not as secured... which needs to be fixed
or
xapos own funds are highly secure just like customer funds.. which case xapo needs another layer of security incase both pots are raided


anyone can say that customer funds are secure.
bitfinex said customer funds are secure by 3 methods
1. multisig with keys on different businesses/services (hot or cold more secure than standard transaction keys in single location)
2. cold store of 99%
3. insured by bitgo

but on the day of the "hack" all three failed
so nothing offers me any comfort that xapo in a scenario of a hack would not have their own funds at risk. or if their own funds are more secure than customer funds. you have to ask WHY!!.

[QuestionAuthority]

Talk is cheap.

[unamis76]

1. why are they not securing customers funds in the same manner as their own reserves, for them to think customers funds could be lost but their reserves could not be

Now this is a really good question

Talk is cheap.

Exactly... Advertising their service this way is also cheap too.

[unent]

1. why are they not securing customers funds in the same manner as their own reserves, for them to think customers funds could be lost but their reserves could not be

Now this is a really good question

Another question is how can Xapo be certain its own reserve is enough to cover hacked customer funds? I doubt Bitfinex had a reserve big enough to cover the customer funds it lost. Most companies pay their shareholders the lions share of their profits, they don't save enough to cover huge losses. Most banks don't save enough to cover huge losses, and why should Xapo be different?

[sipher]

A recent blog post from Xapo called “What happens if Xapo gets hacked?” the company discusses the unfortunate Bitfinex heist that took place on August 2, 2016. Xapo says that if they were compromised the company would cover the losses from its own reserve. This is a glaring difference to the many exchanges that failed to reimburse their customers.

It will be interesting to see how Bitfinex fares after their losses as it was the biggest Bitcoin exchange heist since the demise of Mt Gox. It’s safe to say exchanges that don’t pay their customers back in full will discourage new users from entering the Bitcoin space.

https://news.bitcoin.com/bitcoin-reimburse-losses-stay-alive/

www.tuxexchange.com intends to take a significant portion of trading fees from each coin offered and build a reserve fund. We will publish the reserve addresses.

[pooya87]

you can always make promises but who said they are going to keep them for example if xapo were hacked and lost 120KBTC will they still keep their promise and reimburse their customers? bitfinex and all those other exchanges that were hacked were also saying "we are safe and you have nothing to worry about"

[grim007]

you can always make promises but who said they are going to keep them for example if xapo were hacked and lost 120KBTC will they still keep their promise and reimburse their customers? bitfinex and all those other exchanges that were hacked were also saying "we are safe and you have nothing to worry about"

they can have it if the company have a insurance. i think this will work if a insurance company accepted them because they have a huge profit. hahaha. but if a lot of money is involved , for example 100k btc. i don't think it is legit. because it is easy to run and make again a new company than giving reimbursed for the loss of their investor.
establishing new company is not a big deal seems they have a lot of funds to for promotion. haha

[goinmerry]

A recent blog post from Xapo called “What happens if Xapo gets hacked?” the company discusses the unfortunate Bitfinex heist that took place on August 2, 2016. Xapo says that if they were compromised the company would cover the losses from its own reserve. This is a glaring difference to the many exchanges that failed to reimburse their customers.

It will be interesting to see how Bitfinex fares after their losses as it was the biggest Bitcoin exchange heist since the demise of Mt Gox. It’s safe to say exchanges that don’t pay their customers back in full will discourage new users from entering the Bitcoin space.

https://news.bitcoin.com/bitcoin-reimburse-losses-stay-alive/

If I am the Xapo owner I would say that too. But will it be done once it happened? We dont really know. Maybe they should try to be hacked to see if it is real. 

[ObscureBean]

Agreed. I still can't wrap my head around Bitfinex's solution, they're making customers who were not affected by the hack pay for damages when they should be working to reimburse those who lost coins in the hack in full.

1. why are they not securing customers funds in the same manner as their own reserves, for them to think customers funds could be lost but their reserves could not be

I would think the answer to this is pretty obvious, because they can't. They simply don't have the same amount of control over their customers' funds as they do over their own. Customers must be able to withdraw their funds whenever they choose, which unavoidably creates weaknesses. Their own reserves they can keep completely offline cut off from all access.

[Herbert2020]

the title is right and if the companies reimburse their users because of the owner's fault it helps them keep their business but the cost will be so high in cases that the hack is huge like bitfinex.
also it is funny how xapo used this hack to advertise their own service with the help of bitcoin.com!

[Mauser]

A recent blog post from Xapo called “What happens if Xapo gets hacked?” the company discusses the unfortunate Bitfinex heist that took place on August 2, 2016. Xapo says that if they were compromised the company would cover the losses from its own reserve. This is a glaring difference to the many exchanges that failed to reimburse their customers.

It will be interesting to see how Bitfinex fares after their losses as it was the biggest Bitcoin exchange heist since the demise of Mt Gox. It’s safe to say exchanges that don’t pay their customers back in full will discourage new users from entering the Bitcoin space.

https://news.bitcoin.com/bitcoin-reimburse-losses-stay-alive/

That is great news. I really like my xapo wallet. Don't forget that multiple wallstreet firms are involved with bitcoins. They definitely have the pocket money to cover any xapo hacks.

[Kakmakr]

Those are big words, coming from Xapo, the question is, will they honor that promise when $80 000 000 and higher gets stolen? They might have insurance to cover losses like this, but I should think that something like that, must cost a fortune every month.

Let's see if they will honor that promise. ^smile^

[davis196]

A recent blog post from Xapo called “What happens if Xapo gets hacked?” the company discusses the unfortunate Bitfinex heist that took place on August 2, 2016. Xapo says that if they were compromised the company would cover the losses from its own reserve. This is a glaring difference to the many exchanges that failed to reimburse their customers.

It will be interesting to see how Bitfinex fares after their losses as it was the biggest Bitcoin exchange heist since the demise of Mt Gox. It’s safe to say exchanges that don’t pay their customers back in full will discourage new users from entering the Bitcoin space.

https://news.bitcoin.com/bitcoin-reimburse-losses-stay-alive/

Yeah,right.And what happens when Xapo reserves get hacked?

Maybe Xapo customers will reimburse Xapo for their lost reserves.

Just kidding.

[TastyChillySauce00]

A recent blog post from Xapo called “What happens if Xapo gets hacked?” the company discusses the unfortunate Bitfinex heist that took place on August 2, 2016. Xapo says that if they were compromised the company would cover the losses from its own reserve. This is a glaring difference to the many exchanges that failed to reimburse their customers.

It will be interesting to see how Bitfinex fares after their losses as it was the biggest Bitcoin exchange heist since the demise of Mt Gox. It’s safe to say exchanges that don’t pay their customers back in full will discourage new users from entering the Bitcoin space.

https://news.bitcoin.com/bitcoin-reimburse-losses-stay-alive/

Yeah,right.And what happens when Xapo reserves get hacked?

Maybe Xapo customers will reimburse Xapo for their lost reserves.

Just kidding.

just like their statement,they'll pay and cover the losses by their own reserves,if their reserves get hacked,i guess they have other reserves in form of fiat and not bitcoin,just say they have a backup money,it's indeed a marketing language to attract other exchanger's customer to get into xapo service but if this statement really true,atleast not bullshit,it's good

[Wind_FURY]

Another question is how long will Bitfinex last in their pretension that everything will be ok according to them? I do not think they can continue unless some other company buys the owners out and infuse capital injection in the company. I also cannot believe the owners of Bitfinex are running away with it with no legal demands from their customers. So they just accepted the tokens given to them?

[Pursuer]

A recent blog post from Xapo called “What happens if Xapo gets hacked?” the company discusses the unfortunate Bitfinex heist that took place on August 2, 2016. Xapo says that if they were compromised the company would cover the losses from its own reserve. This is a glaring difference to the many exchanges that failed to reimburse their customers.

It will be interesting to see how Bitfinex fares after their losses as it was the biggest Bitcoin exchange heist since the demise of Mt Gox. It’s safe to say exchanges that don’t pay their customers back in full will discourage new users from entering the Bitcoin space.

https://news.bitcoin.com/bitcoin-reimburse-losses-stay-alive/

but how can then reimburse users of losses this big. the hacks are always in a very huge amount. for example in case of bitfinex it was nearly 120,000BTC which was worth about 72,000,000 USD at the time of the hack. now my question is how can a company like xapo or exchanges like finex pay back this much money and not go bankrupt?

and more importantly do they really have this money in their reserve to pay back? in other words they have to have 240,000BTC stored to lose 120,000 and still have 120,000 to pay back. are these companies really this rich?
- I doubt it.

[ethereumhunter]

A recent blog post from Xapo called “What happens if Xapo gets hacked?” the company discusses the unfortunate Bitfinex heist that took place on August 2, 2016. Xapo says that if they were compromised the company would cover the losses from its own reserve. This is a glaring difference to the many exchanges that failed to reimburse their customers.

It will be interesting to see how Bitfinex fares after their losses as it was the biggest Bitcoin exchange heist since the demise of Mt Gox. It’s safe to say exchanges that don’t pay their customers back in full will discourage new users from entering the Bitcoin space.

https://news.bitcoin.com/bitcoin-reimburse-losses-stay-alive/

if this happen with xapo, then they are really want to cover it? i just don't sure about this, because bitfinex that had been hacked would not covers all the funds. but i hope xapo will prove their word if someday they got hacked.

[NorrisK]

No way most companies are capable of covering the losses of their customers in case of a hack if it is a major one.

A couple hundred thousand may be recovered if volume remains high enough, but millions? I don't see that happening, expect for maybe poloniex with the crazy volumes (most at 0% maker fees probably though) they are seeing on some of the altcoins.

If it happens, either investers are going to cough it up, or the service will file bankrupcy.. or it will pretend nothing happened for a year like cryptsy..

[NeuroticFish]

Sooner or later true insurance companies will come. But I think that they are scared by the current carelessness and stealing hidden under so bad "hacks".
Xapo delivers nice words and I hope we will not get to see if they are true or not... But you can't argue that they found a good niche for some more advertising.