The owner of the IGOT bitcoin exchange confirmed that he was “struggling to pay customers“. It is currently thought of that IGOT may be in financial difficulties with thousands of dollars owed to customers.
Digital currencies are not regulated by the Australian Securities and Investments Commission (ASIC); if they were then an exchange (much like most regulated institutions) would be required to ‘safeguard’ client funds.
Under no circumstances would it be acceptable for a regulated institution to trade with client monies, unless, of course, the firm had the express authorisation of the client themselves. Nor would it be acceptable to co-mingle or use client money as operational capital.
In the absence of government regulation, it is obviously necessary for the industry to develop standards to protect consumers. The IBC Consumer Protection Standards is an initiative with UK government backing to build robust consumer standards.
In reaction to the pending downfall of IGOT, the Australian Digital Currency and Commerce Association (ADCCA) is to release a code of conduct for the industry to improve consumer protection.