After Mt. Gox collapse, these bankers want to build a safer Bitcoin exchange

Mario Gomez Lozada looks nothing like the shaggy hipsters that you encounter at Bitcoin meetups. At 40 years old, he’s obviously more seasoned, and his tailored suit and Franck Muller watch clash with the usual T-shirts and beards. The first wave of Bitcoin exchanges, like their creators, were a bit rough around the edges. Their lack of professionalism – mixed with a lot of naivete and too much libertarian idealism – eventually ended with the collapse of Mt. Gox and the evaporation of approximately US$400 million worth of the cryptocurrency. Gomez Lozada, a former CIO at Credit Suisse in both Japan and Singapore, represents the coming wave of Bitcoin 2.0 services – polished, professional, and well-versed in both finance and IT security.

Gomez Lozada and his team – almost entirely ex-finance professionals – launched Quoine at the end of June. The service is more than a post-Gox exchange, as it also offers a Bitcoin wallet and payments. Gomez Lozada actually left his cushy post at Credit Suisse before the Gox fiasco.

“We had been working on it for a while before Gox crashed,” he tells Tech in Asia. “My colleagues and I were watching and we knew something bad was going to happen. We anticipated a gap in Bitcoin services in Japan and knew we could take advantage of it when the time was right – but with a team that knows the financial landscape in Asia, where you’ve already got some of the strictest regulations in the world.”

“Gox was good and bad,” Gomez Lozada adds. “Bad in the short term, as it scared some people away. But good for purging the first generation of exchanges and giving way to the next gen ones that are built with banking processes and banking security in mind.”

Gomez Lozada’s co-founders – hailing from Barclays, HSBC, and the London stock exchange – are joined by a confidential angel investor from “a big telco.” He says that they will move Bitcoin forward by combining finance, business, and IT experience.

“Gox went down due to lack of security processes and an online wallet that was exposed to hackers. We use a 100 percent cold storage wallet – there’s a 12 to 24-hour wait time for a withdrawal, as it requires manual processes, but it is a good tradeoff for security. People can sleep at night knowing their bitcoins are safe.”

Beyond buy and sell

Quoine differentiates itself from other global exchanges, like Bitstamp and Kraken, by providing services beyond just buying and selling the cryptocurrency. It already offers margin trading, and Gomez Lozada says that derivatives will follow shortly (Kraken now offers margin trading, but no futures):

These are standard features on non-Bitcoin exchanges, but for some reason existing exchanges don’t have them. In Japan, we’re probably the only exchange that offers this and the only global service offering yen right now. After Gox, we want to bring yen back into the market.

Gomez Lozada won’t reveal user numbers but says Quoine has had “more volume than I ever imagined.” He says tens of thousands of dollars worth of Bitcoin are traded daily. The exchange charges a 0.5 percent fee for market takers, but market makers pay nothing. “We want to encourage people to bring liquidity to the exchange,” he says.

On the payments side, Gomez Lozada says his team is talking with major merchants in Japan, Indonesia, and the Philippines:

I just met the two biggest ecommerce companies in Japan – well, one is a payment aggregator and one is straight ecommerce – so I’m sure you can guess. When you sit down with them, there’s a log of education you have to provide from the outset. Half of the meetings were education – I was using a whiteboard trying to teach them how Bitcoin works in the first place.

Banking on Bitcoin