By Daniel Vogel, CEO & Co-Founder of Bitso
As we’re all trying to process what is going on this week with trust, transparency and risk management across the crypto industry, I would like to share with you my views on the current market situation, as well as what we’re doing at Bitso to ensure the safety of our operations and our clients’ funds.
We founded Bitso in 2014 after the collapse of Mt. Gox and as a result, the core of our DNA is to uphold the safety of our customers’ funds. We have always sacrificed faster growth for safety, a decision that comes with trade-offs but one I don’t regret. Our DNA and our company values allow me to say today that the entirety of our customer funds are in our custody and safe from any liquidity or credit risk even if we were to see continued contagion in the industry.
We have an 8-year reputation of keeping our customer’s funds safe. Throughout the years we have built technology, processes and strategies to operate in a safe, secure and transparent way. When the company got started, there was no regulatory clarity or licenses for the crypto space. Yet we decided to self-regulate ourselves following best practices. In 2018 we became one of the few companies in the world and the first company in Latin America to obtain a crypto license for custody and trading. You can view our license here.
Today we have an end-to-end regulated operation where we hold different licenses in each of the jurisdictions where we serve customers. All of our licenses mean constant scrutiny by different regulators and other third parties around the world in the form of audits.
We have never done anything with our customer funds unless explicitly asked to. This is the case of our yield generating product, Bitso+, where we take our risk management very seriously. Our strategy is focused on evaluating market conditions, our partners and making necessary decisions to, again, maintain the safety of our client’s funds. Conscious of the fluid market conditions, we currently have 100% of clients’ Bitso+ funds at Bitso. Therefore, 0% of our client funds have exposure, directly or indirectly, to FTX/Alameda or FTT.
Finally, in order to provide additional transparency to our clients, all of our funds are stored in either multisig accounts or using multi-party computation. We manage a three layered system consisting of hot, warm and cold wallets. Keys for these are geographically distributed across different jurisdictions.
This is a difficult and sad time for the industry, and especially to those directly affected by the default of FTX. As we have done in the past we plead all companies in the space to lead by example and be good citizens of the crypto revolution.
At Bitso, we will continue to set the industry standards on regulation, transparency and risk management and we commit to continue to do everything in our hands to protect our customers.