Bitcoin exchange Bitflyer raises US$1.6M; aims to fill Mt Gox void

bitflyer25 July 2014 / Yuzo Kano, Founder of Bitflyer, has announced the seed funding of US$1.6 million, designed to power a new Bitcoin exchange called BitFlyer. The new Japan-based Bitcoin exchange has ambitious goals, aiming to capture the market position formerly occupied by the now defunct Mt Gox exchange, once the largest Bitcoin exchange.

Founded in 2010, by 2013 Mt Gox was handling about 70 per cent of all Bitcoin transactions. In December 2013, Bitcoin prices had climbed to a record US$1,151. Three months later, Bitcoins were worth half this, when US$480 million were stolen from Tokyo-based Mt Gox, bankrupting it and resulting in its shutdown, with liquidation beginning in April 2014.

Yuzo Kano, the founder of the new venture is a  former derivatives and convertible bonds trader with Goldman Sachs. He resigned from his position with Goldman Sachs in December 2013. His interest in BitFlyer developed due to the benefits he perceives in Bitcoin markets, as well as an interest in how complex systems function.

BitFlyer’s advantage seems to lie in its Kanos intention to operate as a counterparty for buyers and sellers, explaining that it will allow BitFlyer to streamline how transactions are finalised and eliminate complexity from price-setting mechanisms. This is is designed to make it easier for consumer to buy Bitcoin, but also increases the risks that BitFlyer takes on. While looking at the collapse of Mt Gox, as “one less competitor,” Kano feels that the fall of the former Bitcoin exchange has “left many Japanese with a very negative impression of Bitcoin….. Read more

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