World’s leading Bitcoin exchange Bitfinex has partnered with multi-signature technology provider BitGo following the recent hot wallet compromise in which 1500 Bitcoins were stolen. The exchange announced the integration of the multi-signature technology via a press release.
Bitfinex will now provide a multi-signature wallet to each customer, allowing traders to keep track of their funds on the blockchain. With this development, the Bitcoin exchange also expects to avert any future hot wallet compromises or at least minimize the impact. Since each user will have an individual multi-sig wallet, a hacker will not be able to cause significant damage.
Zane Tackett, Director of Community & Product Development at Bitfinex said, “The trading community has long sought individually verifiable accounts without sacrificing security or performance. With the help of BitGo’s multi-signature technology, the Bitfinex team is very excited to be the first exchange in the world to automate Bitcoin settlements using ‘On-Blockchain’ customer segregated wallets.”
With this collaboration, Bitfinex has also become the world’s first real-time Proof of Reserve Bitcoin exchange. All funds and private transactions are secured with multi-institutional, multi-signature, two-step authentication and advanced policies that support individual and institutional trading activities.
BitGo’s CEO Mike Belshe said, “We’ve been working with Bitfinex for several months and are impressed by their dedication to security for their users. The industry has been clamoring for exchanges to adopt the multi-sig model, and we’re proud that Bitfinex selected BitGo’s platform to do it. This new level of transparency and security makes breaches such as those of Mt. Gox impossible.”
Interestingly, the former CEO of the failed Bitcoin exchange MtGox, Mark Karpeles recently called the current state of Bitcoin exchanges “a disaster waiting to happen.”
Founded in 2012, Bitfinex is the world’s leading Bitcoin exchange and provides the most advanced trading platform in the digital currency space. The exchange enables merchants, payment processors, individuals and traders access to the deepest pool of liquidity.