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Q&A: Ex-Mt.Gox exec Thomas Glucksmann-Smith shares the perils of the fintech frontier
For every success on a new frontier there is also a horror story. For many Bitcoin users that horror was Mt. Gox, the Japanese Bitcoin exchange that went from handling 70% of all bitcoin transactions in early 2013 to losing $473 million of the cryptocurrency a year later.
Thomas Glucksmann-Smith had a front row seat on the collapse. He joined the company a year before it closed and become the media’s go-to guy as the Mt.Gox crisis unfolded in its final months.
Investigations are still ongoing. Only last week Mt. Gox’s former CEO Mark Karpeles, AKA MagicalTux, was arrested anew in Japan on more embezzlement charges. Glucksmann-Smith shares a few thoughts with NexChange about his time with the startup and the legacy it has left for cryptocurrencies.
Q: How big was the Bitcoin phenomenon when you joined?
A: Bitcoin was something I learned about three weeks before I joined Mt.Gox. There was already an established global community of Bitcoin enthusiasts and traders when I joined but it was mainly limited to the hardcore libertarians, software engineers, and other niches groups. But after a couple of months, there was constant news from mainstream media about Bitcoin and its popularity gathered momentum quickly. A whole dialogue started around what Bitcoin was and what was going on, and at the time Mt.Gox was the biggest player so there was a lot of attention on the firm.
Q: How did the public react to Mt. Gox in the early days?
A: When you’re the first firm involved in a new type of innovation to get so big, you’re bound to be in the cross-hairs of banks, regulators, and the media. When the Bitcoin craze begun to take off, Mt. Gox’s customer base and trading activity grew at a ludicrous speed and we made serious money from trading fees. This naturally caught the attention of regulators and banks around the world who were still in the early stages of trying to understand the cryptocurrency.
Q: Where do you think the future of Bitcoin is headed?
A: The infrastructure behind Bitcoin is likely to have the most impact. Blockchain, as unsexy as it is, will probably be Bitcoin’s main influence on the financial industry in the near future. Further down the line, projects such as Ethereum, a decentralized platform that runs smart contracts that is inspired by Bitcoin, may eventually have greater impact on how business is conducted.
Glucksmann-Smith is currently managing consultant of La Porte Asia Consulting, a start-up marketing strategy firm focussed on connecting established fintech disruptors with new market opportunities in Asia.