A recent Reddit posting claiming that Uphold, a platform that provides various financial services and encourages fintech innovation, was heading to insolvency because of its VOX holdings drew a quick response from Uphold that caused the critic to recant.
The Reddit post a few days ago expressed concern over the fact that $107,936,914 of Uphold’s assets is comprised of VOX, a cryptocurrency for virtual reality games that Uphold helped to create. “There is no way ‘Voxel’ should belong on a reserve statement with national currencies as it is a speculative security that should be marked elsewhere,” the post noted. “Any attempt to sell this position would result in massive write-downs.”
Uphold responded in a blog that its support of VOX does not change its solvency picture. “Our support of the VOX doesn’t change this. Remove VOX from either side of our Reserveledger and anyone can confirm that Uphold is fully reserved,” Uphold stated.
Uphold further noted that supporting VOX is an example of its commitment to enabling its members to hold value in any form the way the Internet supports every possible form of information. Uphold said it will add more traditional asset classes, such as U.S. stocks. It said its support of VOX is also a proof-of-concept of how it can bring liquidity and convertibility to closed-loop currencies, including loyalty points, airline miles, in-game currencies and more.
Uphold encouraged readers to check out Voxelus, the virtual reality content platform and marketplace that uses the in-game VOX cryptocurrency. It said the value of VOX in the Uphold system is pegged to the VOX price at the end of its crowd sale which in turn is pegged to BTC. Once VOX is freely-tradeable upon the launch of the Voxelus marketplace (planned for the end of March), the VOX value in Uphold’s reserve and Uphold’s VOX obligations to its members will be based on market activity.
The Reddit poster then posted an update claiming that Uphold is solvent, stating: “It’s good to see my reddit post helped the company return to a surplus, reassuring they can pay customers if they demanded their assets out of their network.”
The poster’s update said they considered Uphold solvent, indicating they accepted Uphold’s explanation for listing VOX among its assets.
Several Reddit comments in response to the first post expressed concern about the VOX currency.
Uphold helped to create, distribute and support VOX. To bring virtual reality assets and games to market, Voxelus required its own cryptographically-secure, in-game currency.
CCN reported in December that Uphold users can order VOX on Uphold before its general release on March 30, 2016.
Voxelus allows users to create virtual reality games and experiences without having to rewrite code. It offers a virtual reality player app that plays content using the desktop content tool on Samsung VR or Oculus Rift and is developing even more features.
Uphold in November launched the ability for U.S. members to fund Uphold accounts by linking their bank accounts, debit or credit cards, in addition to bitcoin. The U.S. expansion marked the second phase of Uphold’s global growth, following the October rollout in Europe. Uphold noted that this functionality connects the legacy and fragmented financial ecosystem with the “Internet of Money.”
CCN reported in January that Uphold is partnering with China UnionPay, the largest bank card association in China. Uphold offers China UnionPay customers a safe, secure, and transparent suite of financial services.
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