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Author Topic: How much did Coinlab pay for Mt.Gox US customers?  (Read 1013 times)
bozak
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April 01, 2013, 09:38:23 PM
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It dawned on me that Mt.Gox may be reconsidering the sale/partnership with Coinlab for US customers.  For the last 30 days, Gox has averaged volume of 70,621 BTC exchanged for US $.  If volume and exchange rate ($104 right now) stay the same for the next year, Gox will have revenue of about 15 million for the next 12 months just for US $ trades.  If we valued the Gox US $ business at 2x projected sales, the US $ portion of Gox is worth about 30 million.  Even if we assume that only 70% of the US Gox volume is from US citizens, the valuation of the portion of Gox sold to Coinlab could still be about $21 mil. 

Coinlab received about 500K in venture capital funds (I can't remember the exact $ amount, but it was definately in the thousands, not millions).  Therefore, how much could Coinlab have possibly paid for the US Mt.Gox book of business?  $500K?  4x leverage on capital of $2 mil?  Anyway you slice it, Coinlab got an amazing deal. 
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moni3z
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April 01, 2013, 10:32:25 PM
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Prob didn't pay much of anything because

- mtgox makes money off trading fees anyways, they don't care who handles the fiat
- coinlab came with all their official money transfer/msb licenses which saves gox a ton of risk and investment trying to secure them for every state and federal

Gox should just farm out all the fiat to whoever is licensed and generate codes. Then they are like liberty reserve, no money in out from individuals thus no regulatory problems
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April 01, 2013, 10:34:14 PM
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Therefore, how much could Coinlab have possibly paid for the US Mt.Gox book of business?

Just like Bitcoin provides financial privacy for your transactions, private companies need not disclose publicly details on deals between them.  There may be other investors involved who have nothing to do with Coinlab.

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April 01, 2013, 11:54:36 PM
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- coinlab came with all their official money transfer/msb licenses which saves gox a ton of risk and investment trying to secure them for every state and federal

Yes, and specifically, Coinlab brings a connection to Silicon Valley Bank, which can broker larger bitcoin transactions to institutional investors.  Now that we're at a billion dollar market cap, I suspect we'll see larger purchases coming through SVB. 

Coinlab, and it's investors, most notably the Draper family, are set to make a bundle in this space. We also owe them a debt of gratitude, as institutional investment in bitcoin will be a large driver of wide-scale-adoption.

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April 02, 2013, 02:47:29 AM
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...
Coinlab, and it's investors, most notably the Draper family, are set to make a bundle in this space. We also owe them a debt of gratitude, as institutional investment in bitcoin will be a large driver of wide-scale-adoption.

Well, thanks Draper family...whoever the fuck you are.  I'll re-pay the debt by allowing them to buy some BTC for, I dunno, maybe $10,000/BTC (or equiv in gold.)


bozak
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April 02, 2013, 03:07:18 AM
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Prob didn't pay much of anything because

- mtgox makes money off trading fees anyways, they don't care who handles the fiat
- coinlab came with all their official money transfer/msb licenses which saves gox a ton of risk and investment trying to secure them for every state and federal

Gox should just farm out all the fiat to whoever is licensed and generate codes. Then they are like liberty reserve, no money in out from individuals thus no regulatory problems


Perhaps I misunderstood the Coinlab deal.  If Coinlab does not get commissions for trades, what do they get?  Silicon Valley Bank is handling the fiat, so without trade commissions I don't really see how Coinlab is involved at all.  If they do get the trade commissions then they probably got a great deal, if not they didn't necessarily get anything unless they are going to sell/offer other BTC related services. 
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April 02, 2013, 03:13:43 AM
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Prob didn't pay much of anything because

- mtgox makes money off trading fees anyways, they don't care who handles the fiat
- coinlab came with all their official money transfer/msb licenses which saves gox a ton of risk and investment trying to secure them for every state and federal

Gox should just farm out all the fiat to whoever is licensed and generate codes. Then they are like liberty reserve, no money in out from individuals thus no regulatory problems


Perhaps I misunderstood the Coinlab deal.  If Coinlab does not get commissions for trades, what do they get?  Silicon Valley Bank is handling the fiat, so without trade commissions I don't really see how Coinlab is involved at all.  If they do get the trade commissions then they probably got a great deal, if not they didn't necessarily get anything unless they are going to sell/offer other BTC related services. 

I believe they are getting trade fees, but only from transferring of USD. MtGox doesn't wan't to jump through all the regulatory hoops that you need for USD transactions.

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April 02, 2013, 03:15:57 AM
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Prob didn't pay much of anything because

- mtgox makes money off trading fees anyways, they don't care who handles the fiat
- coinlab came with all their official money transfer/msb licenses which saves gox a ton of risk and investment trying to secure them for every state and federal

Gox should just farm out all the fiat to whoever is licensed and generate codes. Then they are like liberty reserve, no money in out from individuals thus no regulatory problems


Perhaps I misunderstood the Coinlab deal.  If Coinlab does not get commissions for trades, what do they get?  Silicon Valley Bank is handling the fiat, so without trade commissions I don't really see how Coinlab is involved at all.  If they do get the trade commissions then they probably got a great deal, if not they didn't necessarily get anything unless they are going to sell/offer other BTC related services.  

I would imagine MtGox keeps it's current trading fee structure where they shave the bitcoins. Coinlab, who handles the USD fiat, will probably now be charging the 1% to cash out fee so they make their money. It already costs 1% or so to get wires from Gox through their Japan bank, I doubt fees will change very much though this does probably mean the end of dwolla deposits/withdrawals unless you use Bitinstant. This also doesn't effect EUR trading which will still be the polish bank until somebody else comes along with licenses for the EU and takes over that as well.
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April 02, 2013, 05:06:34 AM
 #9

CoinLab is very stupid to cooperate with Mtgox. Mtgox detains Bitcoinica users' money and refuse to give it back. The liquidator which was appointed by the High Court of New zealand are considering taking legal action against this exchange.

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