Very interesting white paper about the Bitcoin Exchange Risk
http://fc13.ifca.ai/proc/1-2.pdfAbstract.
Bitcoin has enjoyed wider adoption than any previous crypto-currency;
yet its success has also attracted the attention of fraudsters who have taken ad-
vantage of operational insecurity and transaction irreversibility. We study the risk
investors face from Bitcoin exchanges, which convert between Bitcoins and hard
currency. We examine the track record of 40 Bitcoin exchanges established over
the past three years, and find that 18 have since closed, with customer account
balances often wiped out. Fraudsters are sometimes to blame, but not always. Us-
ing a proportional hazards model, we find that an exchanges transaction volume
indicates whether or not it is likely to close. Less popular exchanges are more
likely to be shut than popular ones. We also present a logistic regression showing
that popular exchanges are more likely to suffer a security breach.
