UnGox in Brief: Convicted Ex-Boss of Former Biggest Bitcoin Exchange Founds Crypto Rating Agency | news

• Mt.Gox went bankrupt in 2014, Karpelès received a suspended sentence
• Karpelès wants to share his experiences in a crypto rating agency
• Industry insiders doubt Karpelès project’s chances of success

Mt.Gox has probably been a glamorous term for most Bitcoin investors since the very beginning: Founded in Tokyo in 2007 by Jed McCaleb as a trading platform for playing cards, the company, under the leadership of Mark Karpelès, s transformed after just one year into a bitcoin exchange. Within months, the small startup became the world’s largest exchange for the first cryptocurrency – before the platform’s rapid crash in 2014.

The advertisement

Crypto markets with strong correction! Speculative investors now trade around the clock with leverage.

act now

77% of retail investor accounts lose money when trading CFDs with this provider. You need to carefully consider whether you can afford to take the high risk of losing your money.

Mt.Gox shocks the crypto world with a mega bankruptcy in 2014

As early as 2013, Mt.Gox encountered financial difficulties that could hardly be resolved. Since February 7, 2014, the crypto exchange then stopped bitcoin payments. The worst fears were then quickly confirmed: the site had not been available since February 25, 2014, and Mt.Gox was insolvent. According to Tokyo police research, of the missing 650,000 Bitcoins, only 7,000 were stolen by foreign hackers, but the lion’s share was likely hijacked by Mt.Gox insiders themselves. Thousands of crypto investors have been left with their losses. Bankrupt Karpelès was eventually given a four-year suspended prison sentence in Japan for making false statements, after being detained for a total of nine months in 2015 and 2016.

Rating agency planned for crypto exchanges: Karpelès surprises with a new project

As the “Handelsblatt” reported, Karpelès, 36, is now remorseful. The former Bitcoin star apparently wants to pass on his negative first-hand experience with the upheavals on crypto exchanges to big institutional and private investors. Specifically, Karpelès is currently raising funds for a crypto exchange rating agency, which intends to offer a paid newsletter in addition to a free version. This should provide more detailed information about the operator, legal terms, and technology used by the respective crypto exchanges.

In fact, the crypto market has almost exploded in the hype of the past few years and has become increasingly confusing: there are now over 1,000 exchange points for Bitcoin, Ether and Co. “I trying to make sure something like Mt. Gox doesn’t happen again,” Karpeles recently described his goal, according to “Handelsblatt” during a briefing in Tokyo. “If I say something is wrong, maybe a lot of people will believe it.” It remains to be seen to what extent Karpelès can count on the confidence of crypto investors in the face of Mt.Gox’s insolvency.

The name of his agency is “UnGox”. This is an obvious reference to Mt.Gox. Now, Karpelès apparently wants the opposite of “goxen”, which is how the crypto world describes the Mt.Gox bitcoin fraud.

Industry insiders are skeptical about Karpelès’ chances of success

Industry experts are extremely skeptical whether the former crypto star’s rating agency will actually meet with high demand. The founder of the fintech community Tokyo Fintech Norbert Gehrke expresses his skepticism at the “Handelsblatt”. “If he sees it as a business model, then good luck. I can’t really imagine such a rating agency as a source of profit,” Gehrke says. There are already several similar services, which is why crypto analyst CoinGecko has long published a 1-10 trust score for crypto exchanges. Moreover, it is the market that decides on the reliability – and in particular the capital-intensive institutional investors: “I do not see the interest of a rating agency on the stock exchanges where the market has already decided”, says the German fintech expert. . Institutional investors already accounted for two-thirds of the volume of major US crypto exchange Coinbase; these had previously covered the crypto exchange extensively in internal audits. Moreover, the first beginnings of UnGox are not very promising: according to information from the “Handelsblatt”, the startup registered in Delaware currently has nothing more than a website on which each click leads to a subscription to the paid newsletter.

However, there is no doubt that crime continues to be a major problem when it comes to cryptocurrencies. As the “Handelsblatt” quotes the analysis company Chainanalysis, fraudsters stole digital coins worth 14 billion US dollars last year alone. It is therefore obvious that many crypto exchanges suffer from security problems, but it remains to be seen if Karpelès’ rating agency will be able to solve them.

editorial office finanzen.net

Image sources: Adrian Today / Shutterstock.com, TierneyMJ / Shutterstock.com

Leave a Comment