Building trust is key to regaining confidence among cryptocurrency traders after the death of a prominent exchange executive prevented thousands of people from accessing their accounts, according to Tyler and Cameron Winklevoss.
The twins, who run the Gemini Trust exchange, said investors were rattled after they were unable to access Bitcoin and other cryptocurrency accounts from the Quadriga CX exchange following the December death of its chief executive officer. Quadriga CEO Gerald Cotten held the electronic keys to access the cache, sending 115,000 users scrambling for ways to get back about C$260 million ($194 million). They’re still in limbo.
The Quadriga fiasco follows the bust of Mt. Gox’s crypto exchange in 2014, as well as several computer hacks that resulted in losses at multiple exchanges. The value of Bitcoin has tumbled 78 percent since its high in December 2017.
“There are a lot of carcasses on the road of crypto that we’ve seen and learned from,” Cameron Winklevoss said Friday at the South by Southwest conference in Austin, Texas. “At the end of the day it’s really a trust problem. You need some kind of regulation to promote positive outcomes.”
Better oversight and compliance will also help Bitcoin’s price recover to prior levels, he said, adding that it may be possible for Bitcoin’s value to increase in the coming years.
They also hope to reach the 1 billion people globally who are without banking options. “With a crypto address and a smartphone, all of a sudden you are in the system,” he said. “We are really just trying to extend the financial system, so you can send dollars anywhere in the world.”
An even bigger customer base will eventually be machines, rather than humans, they said. “These devices will need to transact value, and they’ll probably talk through companies like Gemini,” Cameron Winklevoss said.
The twins became well-known in 2010 for their portrayal in the movie “The Social Network,” which depicted their clashes with Mark Zuckerberg over the originator of the idea for Facebook. Since then, the 37-year-old brothers have started a self-regulatory organization to help crypto exchanges self-police.
“You want to have a couple of layers of checks and balances,” Tyler Winklevoss said. “We are here for the long haul.”