UK Banks Strangling Bitcoin Startups

The City of London is home to some of the worlds leading financial businesses and is no doubt the biggest centre across Europe. In fact according to the Global Financial Centres Index 2013, London ranks at a cool first place.

With that in mind one might assume that the UK would be the obvious adaptive leader for emerging financial technologies such as cryptocurrencies.

Unfortunately this is far from the case and has been confirmed by hundreds of Bitcoin related startups that have been denied business bank accounts in the UK due to the lack of crypto related regulations (and rampant bureaucracy).

Suggesting virtual currencies are too new or untested is no excuse anymore either. Cryptocurrencies are not ‘new’ at all, especially since their explosive growth in the past few years. For example Bitcoin, the most popular virtual currency to date has developed handsomely from its message board roots to becoming a mainstream digital currency that is flourishing globally with a total market cap value that is just short of £4.5 billion. Not too shabby.

Its success seems to have struck fear into the current financial community resulting in a very blasé corporate response (for the most part) despite Bitcoin related businesses extensively trying to work with banks as opposed to replacing them.

Although Bitcoin is decentralised and can effectively operate without a banking institution, it has become very obvious that banks are still required and will continue to have their place in a crypto world.

However rather than sharing ‘free hugs’ in celebration of this inevitable technology, crypto hopefuls are instead being met with pitchforks and abrupt rejections.

Is this just another show of centuries old, lethargic financial moguls flexing their power and stomping out any better alternatives.

The Financial Conduct Authority(FCA) is the independent regulatory body in the UK whose purpose is to regulate financial firms whilst providing services to consumers and maintaining the integrity of the UK’s financial markets.

The FCA has stated that it does not regulate digital currencies and has no future plans to do so.

The ramifications of not being legally authorised means banks can openly refuse support for crypto related accounts on the grounds that it is high risk money that could be associated with laundering, seamless transactions and cross border ease for financing crimes around the world.

This leaves for example Bitcoin businesses in a state of limbo where they are forced to hobble together self-regulatory protocols that are never officially approved. So despite their usefulness (and genuine legality) the wings of these services are indefinitely clipped.

It is looking more and more like the lack of regulation or guidance from the UK government is nothing more than a ruse to thwart crypto businesses and disrupt the growing ecosystem.

German based Bitcoin exchange Kraken has already signed an exclusive deal with Fidor, a bank that has seemingly taken Bitcoin by the horns and is providing a range of products in partnership with Kraken.

Bitcoin exchange Safello has already won the backing of Swedish bank ‘Handelsbanken’ which could be a hint that Scandinavian countries(highly ranked in the Index of Economic Freedom) could be early adopters of cryptocurrencies.

It remains to be seen just how long this tribal repression by the banks and UK government will continue.

MetroBank stopped working with Bitcoin exchange Intersango. Barclays also stopped working with Mtgox, Blockchain and Intersango.

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Q&A with telecoms operator pioneering Bitcoin in the Czech Republic

Czech telecommunications operator NETBOX now accepts Bitcoin as a valid payment method making it the first telecoms company in the Czech Republic to do so.

The company provides a plethora of telecoms services ranging from broadband, mobile phone plans right through to television subscriptions. NETBOX have over 100,000 customers using their services including governments, schools and other state bodies.

Although the company is embracing Bitcoin, they are still unsure as to whether adopting the digital currency will bring new customers or just add convenience for current users as an alternative method of payment..

The Czech’s have fell in love with Bitcoin since it’s launch in 2011. According to Google Trends the Czech Republic has drummed up the most internet searches for bitcoin related terms.

We caught up with David Otoupalík, Marketing Director at NETBOX to find out more.

What are the benefits of NETBOX accepting Bitcoin payments for customers?

Customer’s can use their Bitcoins and pay for internet and tv bills without any money transaction. We also accepting Bitcoins in our customer’s office.

Are you the first Czech ISP to accept Bitcoin? is this something customers requested?

Yes, we are the first ISP in Czech, which accept Bitcoin as regular payment method. All customers can login into customer’s self care and pay online all the bills.

Are Bitcoins becoming widely acceptable in the Czech Republic?

Not at all. We know only about some Subway’s which accept Bitcoins and also DameJidlo.cz, which is Czech food delivery service.

Have you had any customers use Bitcoin yet?

Yes, after launch, some customers paid their bills with Bitcoins and the transaction was realised successfully. So it works!

Do you see Bitcoin increasing NETBOX revenue?

Unfortunately not.

For more details about the official announcement please see here:

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Interview with Samuel Cox, founder of the self updating Bitcoin pricing tag

Meet Samuel Cox,  a creative technologist based in London and founder of the self updating price tag.

BitTag is on a mission to streamline the gap between retailers and customers by providing real time price conversion with a simple shake, cool eh!

BITTAG

BitTag is currently in the prototype stages of development but were showcased at the BoxPark shopping centre in Shoreditch. The device is priced at around £40.00(TBC) but seems to be aimed at quirky high end retailers and not your mass market shops. Think Liberty of London and Harrods etc.

The devices are permanently connected to a computer running the BitTag app using Bluetooth low energy technology. The tag automatically synchronizes the current Bitcoin price based on the set currency. If the connection is lost, the price freezeS to the value before connection loss.

BitTag also uses little processing power with its OLED display and a rechargeable LiPo battery.

Customers can simply shake the device to activate a QR code which can be scanned using the customers smartphone Bitcoin wallet, it couldn’t be any simpler.

BITTAG

We quickly interviewed Samuel, covering a few security issues that popped to mind and to find out when the device will hit the shops.

How safe is the tag in terms of security issues?

The tags don’t process the transactions. Bitcoin Wallets like Blockchain still handle that. So they payment side is external. Because it updates the price wirelessly, there’s a chance someone could possibly change the value. But we’re aware of that and are designing to prevent that. End of the day, no system is ever 100% safe.

What if the WIFI goes down?

If Wifi goes down, then it’ll just display the latest result before the wifi dropped. Again, because the users pay via their phones and are usually on 3G, it shouldn’t effect the transaction.

How do you intend to get popular retailers on board using BitTag? have you got any lined up to trial?

At the minute we’re exploring options with retails. Very much one step at a time.

What were you doing before BitTag? Are you from the fashion/clothing industry?

I’m a creative technologist, which means that i’m always designing objects and experiences that fit in-between the digital/physical with technology. So not from the fashion industry at all. Important to note that BitTag can work in other mediums outside of fashion.

Have you received any funding?

No funding yet – all my own money and time. Looking for raise now.

What is the cost per tag?

Pricing is still TBC as it’s currently a prototype. As low as possible.

You are based in London, how is the Bitcoin scene?

Bitcoin scene is bubbling up nicely here. We’ve got a few Bitcoin ATMs being installed soon, even a pop-up burger joint accepting it. There’s still some way to get it mainstream though.

When is the launch? when can retailers/merchants buy the tags?

Launch is still somewhat of an unknown entirety. Because Bitcoin evolves so rapidly, you almost have to make and run… hopefully in the right direction!

 

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BuyBitcoin.sg grows UK Bitcoin cash market

BuyBitcoin.sg, a Bitcoin reseller based in Singapore has successfully forged a deal with ZipZap allowing Britons to walk into 28,000 buildings across the country and easily purchase Bitcoins with cash.

The participating ‘points of purchase’ are for the most part corner shops who were already using the global cash payment network to provide various other services such as energy bills, phone credit etc at their local convenience stores.

This style of system has been present in the United Kingdom for some time now so retrofitting it for Bitcoin makes it a tried and tested, extremely safe way to purchase Bitcoins as the shops have previously been used by thousands of customers. In essence this means the participating establishments have already been vetted and have been using the payment network for sometime in a bricks and mortar business.

With the launch of BuyBitcoin.sg in the UK, obtaining digital currency for the none-tech savvy is becoming increasingly easier, removing the tiresome task of international payments to US based exchanges.

Some of the technology behind BuyBitcoin.sg is currently powered by California based ZipZap Inc who manages the cash payment infrastructure.

We caught up with Lasse Olesen, CEO of BuyBitcoin.sg

Who are you? what are your backgrounds before launching BuyBitcoin?

The team behind BuyBitcoin.sg is the same as the team behind www.BitcoinNordic.com, which has been running since early 2012 as one of the first and largest Bitcoin resellers in Europe.

Lasse Birk OlesenFounder and CEO Lasse Birk Olesen, B.Eng, b. 1987, has been a stable of the Bitcoin community since 2011 and has aided the Bankers Association and multiple government entities in Denmark with understanding Bitcoin.

Thomas Steen RasmussenCTO Thomas Steen Rasmussen, b. 1979, is systems developer and administrator. He has more than 10 years of experience in network and system security, system and database design and internet standards from IBM, Siemens, and more.

What cities have been the most popular in terms of using your services to buy Bitcoins? London?

Yes, the greater London area naturally sees a concentration of customers.

Are each of the locations where Bitcoins can be purchased vetted in anyway ?

We use ZipZap’s cash payment infrastructure. For details please contact ZipZap. But before us, the locations were already being used to pay other types of bills and online purchases – we’re just adding Bitcoin support.

Have you received any funding?

No, and we’re currently not looking, but may be looking for more capital in the future.

What are the plans for the future?

Plans are to expand accepting cash payments into more countries and making the entire Bitcoin consumer and end-user experience as comfortable, secure and easy as possible.

How many Bitcoins have been purchased through BuyBitcoin? What are you expect numbers?

Sorry, we’d like to not disclose that for now.

We are excited to present the easiest and fastest way to buy bitcoins in United Kingdom. This is a key piece of infrastructure that allows Bitcoin to grow further in the UK!

For more interesting Bitcoin news don’t forget to follow Coin Spectator on Twitter or like us on Facebook.

Support your corner shop!

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Interview with Bitcoin Investor Roger Ver

We catch up with 30 something Roger Ver to talk Bitcoin. More commonly known as the “Bitcoin Jesus”, Roger is a high profile Bitcoin angel investor who’s put his coins in a number of startup baskets. These companies have ranged from exchanges and trading platforms through to the Bitcoin foundation.

Roger first started to dabble in Bitcoins back in 2011 when purchasing his first Bitcoin for just $1. Since then then the cryptocurrency has seen explosive gains with one BTC being valued at $934 at the time of writing this article.

Although Roger has made a little fortune with Bitcoin, this was not his first success as an entrepreneur. MemoryDealers.com, a website selling computer parts made him his first one million dollars back in 2003.

Due to the recent arrest of Charlie Shrem, we thought it would be interesting to catch up with another prominent face within the industry to get a little insight into the funding and growth side of Bitcoin.

What kind of companies are you looking to invest in? exchanges/ gambling etc…?

I’m done investing in Bitcoin startups. I wanted to bootstrap the bitcoin ecosystem into a viable ecosystem. I think I succeeded with that goal.

Is your fund exclusive for US based startups?

Bitcoin is world wide, so investments in the ecosystem should be too.

How many more startups are you looking to fund in 2014?

Zero. I’m looking to help the companies that I have already invested in.

What Bitcoin sector looks the most promising in terms of growth?

I’m the most excited about new software tools such as blockchain.info and colored coins.

How many Bitcoin companies have you invested in?

Around a dozen.

Is the bad Bitcoin press reducing the potential risk ability of people wanting to launch a business in this industry?

The “bad press” is caused by governments doing bad things. Every time you hear about another stupid government regulation or law, it is more evidence that the world needs Bitcoin ASAP.

How are your current investments doing in terms of growth?

Most are doing great, and others no longer exist. The Bitcoin ecosystem as a whole is what counts, and that is doing amazingly well.

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Pop-up restaurant “BitBurger” launches

Feeling peckish, got a gap to fill or just fancy spending some Bitcoins? Well head on down to BitBurger, the first crypto-currency operated burger stall in East London. Customers can settle their bills with not one, but two cryptocurrencies! Bitcoin and Dogecoins.

beef burger

 

The stall can be found at the “Sunday Up Market” on Brick Lane and is housed in the historic Old Truman Brewery which accommodates over 140 entrepreneurs selling an array of goods from shabby chic clothing to funky accessories and street style food.

No doubt there are many benefits for small businesses and especially pop up stalls accepting cryptocurrencies. The on-going cost of renting chip and pin machines coupled with transactions fees are simply not feasible for startups.

Customers can pay for goods using a secure digital wallet located on their smartphone by simply scanning the QR code.

BitBurger will be feeding hungry punters from the 2nd – 9th of February every Sunday!. How does a bourbon steamed burger with crispy rosemary salted wedges sound? Fantastic? Well head on down to “Sunday Up Market” and support independent food entrepreneurs.

steamed burger

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Bank of Russia forces Metabank to call it a day

The Bitcoin industry has once again succumb to government pressure, as one of the fastest growing cryptoocurrency exchanges operating in Russia, Metabank — has come under regulatory stress from the Bank of Russia, leaving it with no choice but to close it’s doors and cease trading until circumstances change.

Metabank’s immediate closure was sparked by yesterdays earlier announcement by the Central Bank of The Russian Federation who released an official statement which was linked to from the Metbank homepage, warning entities providing services, goods or works for the exchange of virtual currency in rubles or foreign currency are illegal under Article 27 of Federal Law issue “money substitutes” on the territory of the Russian Federation is prohibited.

metabank bitcoin

Entities involved in virtual currency will be considered as potential money launderers and or financing terrorism. The statement also warns the Russian people about the potential risk involved dealing with exchanges and virtual currencies.
The statement mirrors previous government warnings around the globe on the use of virtual currencies, leaving businesses operating within the industry scratching their heads to how the current legal situation affects them whether they may be prosecuted.

Russia is a well documented “police state”, only recently a man named in the media as “Pyotr Pavlensky” nailed his testicles to the floor in Red Square to protest the developing situation. With that in mind, it’s unclear whether the government’s crackdown on Bitcoin is to masquerade the financial threat it may have to the banking system as a terrorist threat to stop the currency in it’s tracks.

russian man nails genitles

In the current light of events, it’s unclear if MetaBank will re-open in the future or whether further Russian exchanges will close.

Strangely the third largest bank in Europe, Sberbank which is owned by the Bank of Russia seems to have mixed views on Bitcoin. The head of the Bank was pro-Bitcoin when interviewed at the World Economic Forum:

“It’s a very interesting global experiment that breaks the paradigm of currency issuance.”

Time will tell, “In Bitcoin we trust”

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Co-Founder of Bitinstant arrested and charged with money laundering

Charlie Shrem, Co-founder of BitInstant and Vice Chair of the Bitcoin Foundation has been arrested and charged with running a scheme to sell and launder over $1 Million In Bitcoins through Silk Road, according to an official statement released by the United States Attorney for the Southern District of New York.

Shrem has been on the law enforcement radar for sometime now due to several customers filing a class action lawsuit against him back in August 2013, although this does not seem to be linked to the arrest made today.

BitInstant was also in the news for allegedly receiving a subpoena from the New York Department of Financial Services requesting information about the way in which it operates.

Special agents James J.Hunt, New York DEA agent, Tomi Weirauch and the IRS-CI filed the criminal complaint which was unsealed in Manhattan’s federal court. The complaint suggests Charlie Shrem and co-conspirator Robert Faiella ran a scheme selling Bitcoins through the Silk Road drugs portal at an increased markup whilst “knowingly contributing to and facilitating anonymous drug sales whilst earning substantial profits along the way”.

According to prosecutors Charlie Shrem himself has also purchased drugs from Silk Road although it is unclear as to whether this was for personal or 3rd party use.

Both men are charged with operating an unlicensed money transmitting business and conspiracy to commit money laundering which carries a maximum sentence of 20 years in prison. An additional charge of willful failure to file a suspicious activity report to the United States Treasury Department may also be applied. This carries a maximum sentence of 5 years imprisonment.

BitInstant was founded by Charlie Shrem in 2011 whilst attending Brooklyn College. A $10,000 initial investment came from family members however this was shortly followed with backing from Roger Ver, 34, who ran for California State Assembly in 2000 as a Libertarian.

MacGuire Capital, a member of whom is Winklevoss Capital Management also invested an unknown sum in to the business.

Charlie was also listed as a speaker at a Bitcoin conference in Miami which ended on Sunday.

 

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Leaked T-Mobile email suggests possible Bitcoin introduction

French and German owned telecommunications company, T-Mobile could well be driving the next Bitcoin price rise as they allegedly review the Bitcoin cryptocurrency as a payment method.

The exciting news was sparked after redditor Ryan Kinder sent a direct message to T-Mobile’s Chief Executive Officer, John Legere, who to his surprise personally responded saying that the cryptocurrency was:

“Under Review!”.

Within John’s reply, the Chief Marketing Officer Mike Sievert, Executive Vice President David Carey and Executive Vice President, Chief Financial Officer and Treasurer Braxton Carter were all subsequently CC’d into the response which suggests that the decision makers at T-Mobile are now well aware of cryptocurrency developments and taking them seriously.

bitcoin t-mobile

T-Mobile is currently the 4th largest mobile operator in the US and represents a massive 13.2% of the total smartphone sales. It’s recent rapid 4G network upgrade has now made the company a real contender in the US telecoms industry.

No doubt the future looks bright as they continue to consistently follow consumer trends and place themselves at the forefront of new technology. Only today have they announced “Mobile Money”, a debit card which can be managed with a smartphone app in partnership with Bancorp Bank.

If T-Mobile are seriously considering Bitcoin payments, to date they would be the largest telecommunications company in the world to accept the cryptocurrency. The news would be a mammoth step forward for the community and would add tremendous value and growth to the whole ecosystem, making it an excellent alternative to current fiat currencies.

This is great news for Bitcoin fans and comes as a pleasant surprise, especially when considering UK telecommunications company, Virgin Media recently suggested they will not be delving into the Bitcoin market.

Since accepting Bitcoin, another prominent US business, Overstock, has seen a massive $500,000 flow through the coffers, with everyday items from bed sheets to men’s shoes being purchased by customers using the cryptocurrency.

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Virgin Media Snubs Bitcoin

Virgin Media, one of the largest telecommunications companies have confirmed they have no plans to accept the Bitcoin cryptocurrency as a payment option for customers.

The company has long pioneered the UK telecoms industry, providing a range of services including lightning fast fiber-optic internet, television and mobile communications.

With speed being one of many touted benefits that Bitcoin offers to users, it comes as a surprise that Virgin Media has not already considered the crypto-currency. After all this coincides perfectly with Virgin Media’s current mantra and advertising campaign, where it features 100 & 200 metres world record holders Usain Bolt, suggestively promoting Virgin Media as a faster, more effective service provider, in particular emphasising the speed of their fiber-optic broadband.

With Virgin also now pushing customers further into the digital void by charging a £5.00 handling fee for paper-based statements, it seems counter-intuitive to ignore the ever growing influence and benefits of Bitcoin.

Bitcoin could ultimately provide a faster, simple and cheaper way for customers to pay their Virgin Media bills without the use of a 3rd party payment processor.

Having said that, one company within the Virgin Group that has adopted Bitcoin is Virgin Galactic. Sir Richard Branson recently announced that customers can pay their way to space with the virtual currency.

Belgium based mobile operator Mobile Vikings is one company which has publicly announced they are accepting Bitcoin payments. The company has around 160,000 subscribers in Belgium and has growing interested in other European countries, it will be interesting to see how early adopters will benefit from delving into crypto payments.

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