Mar 29, 2023
Bitso’s Mexico Chief Vows Solvency in Bid to Soothe Investors
(Bloomberg) -- As the crypto industry battles through its latest bout of turmoil, Bitso SAPI’s Mexico chief is looking to reassure both users and investors that the exchange is safeguarding assets and remains fully solvent.
Clients have access to 100% of their deposits if they want them, Barbara Gonzalez, the cryptocurrency exchange’s 32-year-old Mexico country chief, said in an interview in Mexico City. It’s a vow aimed at bolstering confidence amid an escalating US regulatory crackdown on the sector and a string of US crypto-friendly bank collapses.
“We’ve always seen ourselves as custodians of our customer’s funds,” said Gonzalez, who was previously Bitso’s global chief financial officer. “That’s what lets me sleep at night.”
Bitso is a Mexico City-based crypto trading platform that’s carved a niche in international payments. In 2022, the company moved $3.3 billion between the US and Mexico through money transmitters, it said.
Bitso’s reassurances come after the US Commodity Futures Trading Commission sued Binance, the world’s largest digital-asset exchange for allegedly violating derivatives regulations. Gonzalez said crypto users have also been demanding solvency reports from exchanges in the wake of FTX’s bankruptcy last year.
Gonzalez said the company is offering users more ways to see credible proof of reserves, including a Merkle tree, a privacy-centric data structure that encapsulates all client balances. That type of structure, however, only offers “a snapshot at a point in time,” according to Bloomberg Intelligence analyst Jamie Douglas.
Bitso is also seeking an external third-party auditor and has partnered with Proven to offer a “zero-knowledge” proof, which allows proof of solvency to be shared without exposing confidential information.
The company, which is backed by SoftBank Group Corp and Tiger Global, was worth $2.2 billion during a Series C funding round in 2021. Gonzalez said Bitso doesn’t need another round soon and has no plans for an initial public offering.
--With assistance from Sam Hall.
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