Dispossessed Australian customers of igot call for  bitcoin regulation. Australian bitcoiners, wary of state controls, propose a “code of conduct” for local bitcoin industry that would safeguard customers’ interests.

Bitcoin exchange igot registered in Australia owes thousands of dollars to its customers, reports Australian news portal ABC. According to one of their customers, the company has been consistently inventing reasons for not paying the money back.

One of igot’s customers has been paid half of his money back but only after an interview to ABC in which he described the situation. Zhenya Tsvetnenko, Australian bitcoin entrepreneur, went to the court, claiming igot owes him $180,000. Others placed their complaints with national regulators, but seemingly in vain, as little can be done due of the lack of regulation in Australia.

Answering ABC’s questions, igot’s owner Rick Day admitted he had some problems with paying his customers but promised: “We have not run away with anything and we will return the money.” According to Day, the problems appeared only in the last few months.

However, the customers of the company have had problems with withdrawals and started calling igot a scam as early as in January 2015. A research conducted by Silicon Angle in August 2015, showed that the company could indeed be a scam: its foundation date was probably false, offices claimed in different parts of the world non-existent, and four out of seven “team members” whose photographs were published on igot’s web-site were impossible to identify. No blog posts have been published since July 2015, no posts have appeared on Facebook since December 2015 either.

In an interview to the Sydney Morning Herald, Bitcoin Group’s Martin Davidson said that the problem was caused by people storing their money with bitcoin exchanges the way they would do with traditional banks instead of simply exchanging their money. When a company is not licenced, nothing can be guaranteed:

“Anyone can set up a website with pretty pictures, set up PO boxes around the world and call themselves a bitcoin exchange.” 

Adrian Przelosny of Independent Reserve says that currently “there is a burden on the consumer to their own research on the companies that they deal with,” which i s aproblem that can be solved only with tighter regulation of bitcoin industry. The idea is supported by many of igot’s customers, some of whom argue that “regulators should be ahead of this game rather than waiting to decide on who should be in charge of this after problems start erupting.” 

Others still claim that enhanced governmental regulation might destroy Australian bitcoin industry. Nicholas Giurietto, CEO of the Australian Digital Currency and Commerce Association, proposes a voluntary code of conduct instead. When adopted, it would enhance the customers’ confidence, making sure that no money is lost anymore. While the details of the code are yet to be revealed, it is likely to include an obligation to recognize an external dispute resolution scheme and satisfy privacy and data security standards.

Alexey Tereshchenko