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Category: Internet Technology / Computers and Technology / Science and Technology / Business, Economics and Finance

Bitcoin industry rushing through guidelines as 'devastated' buyers seek refunds

Tuesday, 12 Apr 2016 10:05:09 | Jake Sturmer

A pile of bitcoin slugs sit in a box ready to be minted by Software engineer Mike Caldwell in his shop on April 26, 2013 in Sandy, Utah, in the United States. (AFP: George Frey)

The Australian computer currency industry is urgently moving to bring in a code of conduct to stop customers losing money from bitcoin companies that go under.

Last night, 7.30 revealed that Australian-founded bitcoin exchange Igot appeared on the verge of collapse, with dozens of customers and clients claiming to be owed hundreds of thousands of dollars.

"The impact on consumers is clearly devastating," Australian Digital Currency and Commerce Association (ADCCA) chief executive Nicholas Giurietto said.

The Igot exchange, which buys and sells bitcoins on behalf of customers, has for months been unable to completely deliver on those bitcoins or refund their money.

Its owner Rick Day admitted to the ABC that he was struggling to pay customers.

"I am well aware that customers are affected and customers are really unhappy with this but I would like to show each and every one that we have not lost their money," Mr Day told the ABC.

"We have not run away with anything and we will return the money."

Do you know more about this story? Email investigations@abc.net.au

ADCCA has moved to distance itself from Igot.

"Igot are not a member of ADCCA ... it certainly looks like they've let their customers down really badly which of course is devastating to those individuals affected," Mr Giurietto said.

What is bitcoin?


Can't tell a bitcoin from a blockchain? Read our explainer to see how the cryptocurrency works.

"In any growing industry sometimes there are players that aren't as reputable as we would all like.

"ADCCA was created by some of the larger bitcoin exchanges in Australia deliberately to provide confidence to consumers."

The industry group is now pushing through a voluntary code of conduct to reassure bitcoin customers.

"We're about two or three weeks away from finalising a digital currency industry code of conduct and that's taking the protection for consumers to a whole new level," Mr Giurietto said.

"In particular on the consumer side it includes an obligation that the business be a member of an external dispute resolution scheme — so a mechanism for complaints to be managed fairly and an obligation to meet privacy and data security standards.

"Most importantly in this particular situation an ADCCA certified operator would be required to maintain a trust fund in which any customer funds need to be deposited until the [bitcoin] order that the customer has placed has been fulfilled."

AustraliaPlus


 

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