Canadian exchange to shut as Bitcoin bad news continues

Vault of Satoshi owners to focus on more promising Netflix business

Canadian Bitcoin exchange Vault of Satoshi is shutting down next month in the latest bad news to hit the cryptocurrency.

The operators of the exchange said they are focusing on another business project that began six months ago, one that is not related to cryptocurrency.

Run by Global CryptoCurrency Solutions, the Brantford, Ontario-based exchange is no longer accepting new deposits and will close Feb. 5.

"We'd like to reassure the community that it has absolutely nothing to do with insolvency, stolen funds, or any other unfortunate scenario," the operators wrote in a post. "Our decision stems from opportunities presented by a new business that has forced us to reexamine our priorities."

The company did not immediately respond to a request for more information. Its cofounder Michael Curry is also behind TurboFlix, a Web service that allows Canadians to watch Netflix content available in other countries.

Vault of Satoshi launched in October 2013 and describes itself as "the first full proof-of-reserve exchange in the industry."

Its closure comes as European Bitcoin exchange Bitstamp said in a post that some of its operational wallets were compromised Jan. 4, leading to "a loss of less than 19,000" bitcoins, which is roughly US$5.1 million.

"The bulk of our bitcoin are in cold storage, and remain completely safe," Bitstamp co-founder Nejc Kodric wrote in a Twitter message.

The exchange, launched in August 2011, had tried to reassure customers that their coins are safe after a breach over the weekend forced it to suspend operations on Monday.

Bitstamp added that it is investigating the matter and communicating with law enforcement officials.

Such bad news about the cryptocurrency seems to have weighed on the value of bitcoin. It recently sank below $300 for the first time in over a year, down from a high of $1,242 in late November 2013 on MtGox, the Tokyo-based exchange that went under last year with some $370 million in bitcoins missing.

On Tuesday, one bitcoin was worth about $271, according to tracking website CoinDesk.

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Tags internetInternet-based applications and servicesBitstampVault of Satoshi

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Tim Hornyak

IDG News Service
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