Uphold Squashes Insolvency Accusations and 'Misinformation'

Uphold, the commodity and financial trading service formerly known as BitReserve, has hit back at user accusations that it is insolvent.

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Victim of Transparency?

Social media users flagged up data from the company’s “Transparency” page indicating negative balances and overwhelming reserves of cash stored in little-known cryptocurrency Voxel (VOX), a clone of Litecoin.

Uphold released a statement several days after the findings were posted on Reddit, calling them “an attempt to spread false information.”

The data hosted on Uphold’s website states $113,589,243 USD of assets and $112,534,729 USD in obligations to its members, resulting in a total equity of $1,054,514. Of this, however, over $107 million is stored in the Voxel currency. When the Voxel reserves are subtracted from the balance sheet, a deficit is revealed of $120,000.

“Uphold owes its members more gold for example ($60k) then [sic] is held, Uphold also owes more Bitcoin ($600k) then [sic] is held,” the Reddit user who submitted the data commented on the findings.

Voxel’s specifications on the Bitcointalk forum meanwhile state that it is “fully premined” scrypt altcoin and that mining it is “not recommended.” Voxelus, the structure behind the currency and also founded by chairman Halsey Minor along with Uphold, called Voxel “the official currency of virtual reality” in a release on its crowdsale.

Minor, who is purported to have had a “co-founding” role in companies including Salesforce and CNET, filed for bankruptcy in 2013 following “bad bets on real estate and other ventures,” Bloomberg reported at the time.

A Frank Response from Uphold

Bitcoin.com contacted Uphold for comment regarding the Reddit post, and was pointed to a blog entry issued earlier Monday, signed by vice chairman J.P. Thieriot.

While specific information from Reddit is not explicitly mentioned, the company told Bitcoin.com that it is intended as “a response to the Reddit chain.” The text of the post primarily deals with the status of Voxel at Uphold, noting what the company calls “misunderstandings” surrounding the currency.

The post states:

Remove VOX from either side of our Reserveledger and anyone can confirm that Uphold is fully reserved. Supporting the VOX is an example of our commitment to enabling our members to hold value in any form […]. We believe VOX, as the in-platform currency of Voxelus and Reality Lab, has a very bright future.”

In a retort to the Reddit criticism, however, Uphold was more direct, stating:

Moving fast while hiding nothing can sometimes create confusion and give unscrupulous competitors and trolls the opportunity to spread misinformation. This happened yesterday when an ‘anonymous’, 12-hour-old reddit user sought to spread false information.

The post goes on to reiterate that funds are “accessible, available and removable at any time” by users.

What’s your opinion on Uphold’s reserve structure and claims? Share and comment below!

Images courtesy of Uphold.com, commons.wikimedia.org