Category: News

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”

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.

 

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.

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.

Czechs hit by Bitcoin fever

The latest internet searches show that the Czech Republic have been intently following the Bitcoin cryptocurrency since it’s launch in 2011.

According to Google figures, the Czech Republic performed the most searches for the term “Bitcoin”, followed by Hong Kong, Estonia and then the Netherlands. Surprisingly the United Kingdom is not in the top 10.

However in recent months, interest has waned a little moving them down to 4th position and allowing Estonia to take the top spot in Bitcoin searches since the start of the new year.

Although Czechoslovakians/Czech’s have searched for Bitcoin information more than any other country, it’s hard to see if they are actually adopting the cryptocurrency due to the lack of exchanges and their dual use of the Czech Koruna(CZK) and Euro. Trading charts also put the Czech Koruna at around position 25 in currency volume, although it’s definitely higher due to the common purchases in Euros and neighbouring exchanges.

They have however received the green light to dabble in Bitcoin by the Financial Analysis Unit, the Czech Finance Ministry but were made well aware of the risk factors inline with Anti Money Laundering regulations, according to an official statement released on the 16th September 2013.

The document also warns that payment above 15,000 Euros should be marked as suspicious according to section 18 of the AML law, whether sellers/buyers have to inform the authorities is still unknown. It seems that the Czech Financial Action Task Force on Money Laundering Teams are concerned about money laundering which until recently was one of the widely abused uses of Bitcoin.

The document states that the “Financial Analysis Unit asks all required persons, that in relation to buying/selling of any digital currency, for example Bitcoin, to consider for appraisal any payment above the volume 1.000 EUR as very risky and as a candidate for decision about other measures, and to send notification about every payment about 15.000 EUR as a suspicious trade according to the section 18 of AML Law.

Bitcoin has had a rocky start in Czech Republic with one of the largest exchanges, Bitcash.cz, being subject to hackers who stole around 4,000 customer wallets amounting to around 2 million Czech koruna.

On the upside, economics daily newspaper Mladá fronta E15.za reported that a Men’s luxury shoe shop based in Pragues part Uhezd which is home to luxury shoe brands such as Church, Alden Vass and Alfred Sargent has attracted young people by accepting Bitcoin payment using QR codes.

Barely legal: India Bitcoin market continues to grow despite regulatory confusion

Despite ongoing regulatory confusion among Bitcoin exchanges in South Asia, BitQuick has expanded their trading operations in to India by launching BitQuick.in, an escrow-esque style Bitcoin exchange.

Whether or not BitQuick can completely circumvent current legal spats between the Indian authorities we are not sure. We recently documented the re-opening of the Unocoin exchange here after India’s top taxation expert, ‘Nishith Desai’ gave them the green light to continue trading despite prior raids by the Enforcement directorate. We are not sure if  same legal workarounds which Mr Desai found for Unocoin also make BitQuick legal in India? The regulatory practices behind the scenes may not be inline with the authorities.

The BitQuick exchange portal allows people to purchase Bitcoin using a variety of methods including National Electronic Funds Transfer(NEFT), Real Time Gross Settlement(RTGS), Immediate Payment Service(IPS) and cash deposits.

The exchange carries a 1% fee for buyers (which will increases to 2% from February 2013) and selling is currently free which makes it an attractive exchange for both parties.

Large trades can also be handled with a maximum transaction limit of 500,000 rupees which is around £5,000 or $8,000, more than other exchanges.

We spoke with BitQuick’s exchange operators to find out more.

1. Do you have official approval to launch the exchange from the Indian authorities ?

We do not currently, and given our lack of a physical presence in India, we do not have plans to formally register as a business with Indian authorities. The lack of well-defined virtual currency regulations make it difficult to categorize our role as a physical business in India.

2. What happens if you are raided/banned by the authorities. Are buyers/sellers wallets secure?

Absolutely, the escrow addresses’ private keys are held in encrypted files offline in locations separate from the web servers themselves. A direct ban by Indian authorities would solely result in the cease of operations, and the return of all pending escrow funds.

3. How does the exchange differ from current exchanges such as Unocoin/ buysellbitco.in?

Unocoin and Buysellbitco.in are fixed-rate exchanges. At all times, they have a fixed price and spread they are willing to buy or sell bitcoins for. Our exchange is different in that BitQuick.in does not directly buy or sell any Bitcoins. We simply allow users to list their Bitcoins for sale, and buyers to then make purchases. INR is sent directly from the buyer to the seller, and then the Bitcoins are released from the seller’s escrow address to the buyer once payment is confirmed. In this way, we act more like an escrow service and avoid the regulatory complications involved in handling FIAT currencies.

4. have you taken any legal advice to make sure what Bitquick is doing in India is legal?

Yes, we are always doing our best to stay on top of developing regulations by consulting our legal professionals.

Argentina could drive the next Bitcoin price explosion

  • We speak to Coin4ce’s operations manager and chief revenue officer at BitPagos.

The current financial situation is extremely worrying for the Argentinian people with the 25-30-percent inflation rate reducing the value of the Peso. This has resulted in an increased daily living cost for millions of people, which in turn is driving up the blackmarket trade in illegal Blue dollars.

The situation has been well documented for over a decade. Investment within in the dollar grew rapidly since the Argentinian government defaulted on the debt in 2001 causing a lack of financial trust in the people.

President Cristina Kirchner has since pushed several hard hitting legal measures to curb the dollar trade, one of which is stopping the exchange of the Peso to Dollar in many of the banks.

She then went on to increase the credit card tax to a whopping 35% on international purchases, which caused a further financial blow to the people.

Due to these clamp downs it has become increasingly hard for traders to keep up with the supply of dollars and avoid inflation. Black Market workers often have to cross the border to Uruguay to withdraw dollars from ATM’s to compete with the ever growing trade.

This has ultimately paved the way for an alternative currency, Bitcoin which is easier, more convenient and sustainable with the added incentive of bypassing inflation risks.

Bitcoin is growing extremely fast in Argentina, Localbitcoins.com ranks the country within the top 10 on their statistics page showing a healthy exchange network already developing in many cities.

Government regulation around the cryptocurrency has yet to be clearly announced, but due to the growth this could well change (very soon).

One company leading the way in Argentina is BitPagos whose main aim is to provide merchants and buyers with easy, cheap and fast electronic payments to Latin America, most notably Argentina.

We spoke to Fernando Paradiso the Chief Revenue Officer of BitPagos:

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What are your thoughts on Argentina adopting Bitcoin?

Argentina is going to be, perhaps, the first country in latin america to adopt bitcoin. But not only because of the dollar spread, but because we’re used to be early adopter in technology terms.

In terms of financials, bitcoin is a safe way to keep savings, make extra revenue because of the currency fluctuation and also stay safe from the inflation.

Are you seeing an increase in businesses using BitPagos to accept bitcoin?

In argentina there are several companies that are adopting bitcoin as a payment methods, most likely hotels, travel agency and tourism oriented companies and services.

The main reason of this behaviour it’s because nowadays bitcoin is being used a financial instrument, a saving method or a way for tourist to move money on a safe way, avoiding controls and so… it’s kind of a new “Amex Traveler’s check”

And at Bitpagos we’re reaching online companies like MMO’s social games and social networks to adopt bitcoin as a payment method, because there are no age restriction, there are no chargebacks, it has instant approval and since the fee is incredible low, this companies make more money out of micropayments.

Do you think the “Central Bank of Argentina” will try to stop people converting Pesos to Bitcoin ?

Bitcoin is way bigger than the Argentinean central bank… therefore, they first need to understand what’s a bitcoin and how other countries behave in terms of this currency.

On top of that, the dollar leak is bigger than you think, but it’s happening through other channels.

And here, bitcoin is considered a digital active, therefore is not illegal to buy them, sell them or save them.

How can people support the growth of Bitcoin in Argentina ?

Well, that’s a good question… truth be told, the current market it’s incredibly small compared to it’s potential…

Every day more stores, bars, restaurants and theatres are accepting bitcoin as a payment method.

Since there are lot’s of bitcoin here, exchanges are focusing on reaching them and we’re looking for ways to ease the access to bitcoin to anyone who wants to buy or participate in this world.

We’re going to set a network of offline payment methods we’re users are going to be able to buy bitcoin in places like drugstores or supermarkets.

In the meantime we encourage more and more companies, stores and services to accept this new currency as a payment method.

How fast is BitPagos growing in Argentina and the rest of Latin America?

Well I can tell you that currently at bitpagos we have more than 400 active merchants accepting bitcoin and we’re processing more than U$S100K monthly.

BitPagos has also been accelerated by Boost.vc in Silicon Valle and successful financial rounds from: Tim Draper, Naranya Ventures, NXTP Labs, Stanford Investment Club and several angel investors

Coin4ce is also on a mission to make it easy for people across Latin America to buy, sell, and use Bitcoins. They made headlines in the Panampost this week for developing an application to pioneer Bitcoin in a Chilean Nightclub.

We spoke with Coin4ce about the current Bitcoin situation in the Latin Americas region and asked if they are looking to expand to further countries.

Can you see Latin America overtaking China in terms of growth/volume?

 

Austin DeLonge – Coin4ce’s operations manager comments:

I am not sure about LatAm overtaking China in terms of Bitcoin growth/volume. I think both markets will have exciting developments happening, but they are in different stages right now, so I personally don’t really compare them against one another.

Right now we are focused on Chile, Mexico, Peru and Colombia. We would potentially like to expand to more countries down the road, but no plans at the moment.

We are more focused on helping consumers buy and sell Bitcoins, so we don’t actually have any other merchants using our solutions to accept Bitcoins, but are happy to assist in the process if there are merchants with questions.

We are hosting a big Bitcoin vent tomorrow night in Providencia, Santiago and everyone is welcome! http://www.meetup.com/startupchile/events/156808202/

We are very excited to see continued growth in Latin America as more people start learning about Bitcoin and starting to use it. We always recommend that people do research to understand Bitcoin first, as it is a fascinating new technology. We also have a blog that we encourage users to check out for some educational pieces and updates about Coin4ce.

So there you have it. Bitcoins continue to go from strength to strength with many around the globe crying out for an alternative currency that they, the people can control.

Will the Bitcoin train ever stop? Lets hope not!

India Gets The Green Light

Following a press conference organised by Bitcoins Alliance India, Unocoin,  one of the largest Bitcoin exchanges in India has been given the green light allowing users to continue accessing their accounts as of today (6th of January 2014) with regular trading commencing on the 8th January.

The conference was headed by India’s top taxation and legal expert Mr Nishith Desai, Founder & Managing Partner of Nishith Desai Associates. Mr Desai has meticulously analysed the techno-legal perspective of Bitcoin inline with current payment and currency laws and concluded that Bitcoins are in fact a legitimate currency and could provide many benefits to India’s economy.

The statement below was posted on the Unocoin website today:

After press conference organized by BAI headed by Mr. Nishith Desai, and after the take-aways of the conference are out to public through media, Mr. Nishith Desai has given us a green signal to start Unocoin operations which will be starting on 6th Jan 2014 when the logins will be enabled and Unocoin wallets will be accessible. Buying and selling of bitcoins will go live from 8th of Jan 2014. CoinMonk Ventures and Unocoin is very thankful to Nishith Desai and their team for being a part of press conference and guiding us through till here 🙂

Just before Christmas the Indian Bitcoin fever grinded to a sudden halt when the Reserve Bank of India (one of the most prominent banks) issuing a statement cautioning the public, traders and holders about the risks of dealing in the cryptocurrency.

The Reserve Bank of India is the central banking system tasked with controlling the monetary policy of the Indian rupee and are the governments ‘go to’ source regarding financial matters.

Although the bank only issued a warning, larger exchanges panicked which resulted in crypto trading grinding to a halt and access to wallets being frozen. As many put it, this was due the imminent risk of being arrested or breaking multiple foreign exchange and payment laws.

The leading Bitcoin exchange buysellbitco.in felt the full force of the Indian government four days after RBI issued a warning when their offices were raided in Ahmedabad by the Enforcement Directorate. The ED are the law enforcement agency and economic intelligence agency tasked with fighting economic and digital crime across the country.

As of today (06/01/14) buysellbitco.in still has the following message on their website:

Post the RBI circular, we are suspending buy and sell operations until we can outline a clearer framework with which to work.This is being done to protect the interest of our customers and in no way is a reflection of Bitcoin’s true potential or price.

It is yet unclear as to whether buysellbitco.in will continue trading, but we imagine most if not all exchanges will reshuffle their goals and frameworks and be trading again within the next few weeks.

All in all, great news for Bitcoin fans in India and around the world.

Mr Mahin Gupta, founder of the buysellbitco.in did not respond for comment.

“In bitcoin we trust”

 

Bitcoin price just breached the £620 mark

The price for a single Bitcoin has breached the £620 mark for a second time on the popular exchange platform, Mt. Gox.

Bitcoin reached the £620 price at approximately 8:30am Greenwich Mean Time (GMT) and 3:30 Eastern Standard Time(EST) if you’re across the pond.

We first witnessed a similar rise last November when the Chinese were investing heavily in the digital currency. However shortly after the rise it crashed as quickly as it rose due to China’s central bank imposing several legal restrictions on the digital currency. They ultimately denied third-party payment processors and financial institutions from handling Bitcoin.

Despite repeated crackdowns by the Chinese authorities which crashed the market by more than 50%, the most popular Chinese exchanges are still pushing high trading volumes suggesting a legal loophole in deposits for the time being.

At the time of writing nearly 70% of the Bitcoin market share is taking place on exchanges such as BTC China and Huobi, with the remaining spread across USD and several other currencies.

Due to the unknown situation in China regarding deposits via bank transfers the price may have fluctuated due to a workaround imposed by the Huobi exchange.

A rumour started in the popular Bitcoin Reddit section which pointed towards the CEO of Huobi accepting deposits through his personal bank account to avoid the imposed restricts.

The main concern in this scenario is how long the loophole will remain active and will it ultimately result in the authorities shutting down trade causing further cataclysmic price crashes.

When the price crashed to around £250 between December 17th to 19th, it not only affected Chinese trade which is now recovering but also mainstream development and currency adoption. Below are some of the milestones which could of caused increased the volatility of the recent crashes:

  • Wall Street Investors said they would move into Bitcoin in 2014 Q1
  • Max Keiser said Netflix would adopt Bitcoin payments
  • Porn.com started to accept Bitcoin
  • Zynga is testing the Bitcoin currency
  • Overstock.com planning to accept Bitcoin
  • Victoria’s Secret Stores partnered with Gyft
  • eToro accepting Bitcoin
  • Latin America ?
  • “Hello San Francisco, Hello Bitcoin” advertising campaign by arisebitcoin.com
  • Pastebin accepting Bitcoin

Netflix Gets The Bitcoin Fever

American movie streaming giant Netflix has been rumoured to be one of the first major companies to accept the Bitcoin digital currency as a payment method.

The rumour was started by Timothy Maxwell, famously known as Max Keiser from the popular financial report show “Keiser Report”. The prediction was made on the recently aired 545th episode.

The show itself provides a no bullshi* view on the shocking scandals which parade the financial headlines. He is the peoples financial cop known to lift the lid on elitist government lies.

Max Keiser posted the rumour on his official Twitter account @maxkeiser at 7:54 AM today to nearly 90,000 thousand followers causing the rumour to surface on the front page of Bitcoin Reddit.

We are unsure as to how legible the Netflix rumour is at this point, but it’s worth noting that Max Keiser successfully predicted the recent Zynga Bitcoin adoption before that too became public knowledge. This suggests he may well be correct again and have some insider  knowledge or close contacts at the company.

As a digital service it makes sense for Netflix to accept Bitcoin as it would open the services reach to a far wider global demographic.

The news, rumour or eventually truth is none the less fantastic for the Bitcoin community. Netflix adoption would ultimately raise awareness and promote the currency to millions of people strengthening the coin inline with current payment methods.

Long live Bitcoin (with or without Netflix)!