I appreciate that Bitstamp made a statement, but anyone who trusts this is a complete fool. Trusting Mt. Gox was precisely how I lost money in its demise.

I was also called a complete fool by someone on HN just before I lost my money. The comment made me angry. Me, a fool? Yet it was true, and I should have listened.

Run away, don't walk. They lost 5 million dollars. Let that sink in before deciding to trust them with any money you care about.

5 million dollars is about the same as a Series A round. They lost the equivalent of an entire company of programmers. You could employ 50 programmers for one year with that amount of cash. And it was precisely your money that they lost.

For all you know, this could now be a game of "musical chairs" where the last person to withdraw money from bitstamp will be left wanting. Don't let that be you. Guard yourself.

By the way, Mt. Gox lied through their teeth to me, all the way up until their service shut off. Leading up to the disaster, I was in constant communication with their support staff, and they were very reassuring. "No, of course no one will lose money. Withdraws will reopen soon." Too bad the support people were themselves being lied to by Mt. Gox management.

So, no, a statement by a bitcoin service isn't worth the weight of the paper it's printed on.

EDIT: It's distressing that HN downvoted the parent comment to the point where they felt like deleting it. Please try to downvote less in general. The parent comment was simply relaying Bitstamp's statement.

Those are customer funds, not the capital of the business. Bitstamp has to have 100% of customer funds, both fiat and Bitcoin, or they're insolvent.

(And, no, they don't get to do "fractional reserve banking". They're not a bank, and they don't have loans as assets.)

As I read it, that's a promise to users, not a statement about their balance sheet. It does not preclude the situation 'Animats is talking about, where they currently have less BTC than they credit their customers with, but they plan to make it up somehow before it becomes a problem.

That doesn't formally answer the question, though the fact that they will respect all withdrawals does suggest that they are unlikely to be insolvent. For example, they could be insolvent but allow withdrawals up to the last 19k bitcoins.

I don't mean to suggest that they are not solvent; I am only pointing out that the language doesn't seem to perfectly answer the question.