Arguably the biggest bitcoin-related startup success in the U.S. is San Francisco-based Coinbase, which has reached 1 million consumer wallets.
Founded in June of 2012, Coinbase offers wallet services and a platform where merchants and consumers can transact with the cryptocurrency.
Despite success stories like Coinbase and that of other U.S. businesses, one U.S. lawmaker Wednesday displayed a knee-jerk reaction to the demise of Tokyo-based Mt. Gox, which was once the largest bitcoin exchange before it went offline this week.
Sen. Joe Manchin, a Democrat representing West Virginia, sent a letter Wednesday to the Treasury Department, the Federal Reserve, and other regulators calling for a ban on bitcoin because it encourages “illicit activity” while being “highly unstable and disruptive to our economy.”
The move is being seen for what it is, mostly a publicity stunt. Instead, U.S. and state regulators will likely expedite rules and possible restrictions on bitcoin activities that could make it more expensive for startups like Coinbase to assist businesses and consumers with cryptocurreny transactions.
Nonetheless, Silicon Valley’s Coinbase continues to expand at a rapid rate. In addition to 1 million wallets, its other metrics include 25,000 merchants signed on to its services and 4,000 API applications. Coinbase also provides U.S. bank integration for its customers.
Coinbase founders Fred Ehrsam and Brian Armstrong were among the bitcoin community leaders who signed a statement of unity in the wake of the Mt. Gox collapse.
Here is part of that statement:
“Bitcoin operators, whether they be exchanges, wallet services or payment providers, play a critical custodial role over the bitcoin they hold as assets for their customers. Acting as a custodian should require a high-bar, including appropriate security safeguards that are independently audited and tested on a regular basis, adequate balance sheets and reserves as commercial entities, transparent and accountable customer disclosures, and clear policies to not use customer assets for proprietary trading or for margin loans in leveraged trading.”