With MtGox effectively dead, Bitcoin can now enter the third stage of evolution, explains BitGo CEO Will O'Brien in an extensive essay. More »
Erik Voorhees, a respected Bitcoin entrepreneur who created SatoshiDice and now runs Coinapult, shares his views about MtGox and the future of Bitcoin. More »
Hollywood could learn a lot from Silk Road 2 about heightening stakes and creating suspense in this epic whodunnit thriller where 4000 bitcoins were stolen! More »
In this extensive video, Bitcoin Leah interviews Brock Pierce, Alan Meckler, Sam Cole, and companies including BitGo, GoCoin, Lamassu and more. More »
Meet the Bernie Madoff of Bitcoin: SEC Probes Bitcoin Ponzi Scheme
SEC Charges Texas Man in Bitcoin Ponzi Scheme
The SEC has alleged that Texas-based Trendon T. Shavers, who is the founder and operator of Bitcoin Savings and Trust (BTCST), offered and sold Bitcoin-denominated investments through the Internet using the monikers “Pirate” and “pirateat40.” Shavers raised at least 700,000 Bitcoin in BTCST investments, which amounted to more than $4.5 million based on the average price of Bitcoin in 2011 and 2012 when the investments were offered and sold. Today the value of 700,000 Bitcoin exceeds $60 million.
The SEC alleges that Shavers promised investors up to 7 percent weekly interest based on BTCST’s Bitcoin market arbitrage activity, which supposedly included selling to individuals who wished to buy Bitcoin “off the radar” in quick fashion or large quantities. In reality, BTCST was a sham and a Ponzi scheme in which Shavers used Bitcoin from new investors to make purported interest payments and cover investor withdrawals on outstanding BTCST investments. Shavers also diverted investors’ Bitcoin for day trading in his account on a Bitcoin currency exchange, and exchanged investors’ Bitcoin for U.S. dollars to pay his personal expenses.
“Fraudsters are not beyond the reach of the SEC just because they use Bitcoin or another virtual currency to mislead investors and violate the federal securities laws,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “Shavers preyed on investors in an online forum by claiming his investments carried no risk and huge profits for them while his true intentions were rooted in nothing more than personal greed.”
According to the SEC’s complaint filed in U.S. District Court for the Eastern District of Texas, Shavers sold BTCST investments over the Internet to investors in such states as Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, North Carolina, and Pennsylvania. Shavers posted general solicitations on a website dedicated to Bitcoin discussions, and he misled investors with such false assurances about his investment opportunity as “It’s growing, it’s growing!” and “I have yet to come close to taking a loss on any deal,” and “risk is almost 0.” Contrary to the representations made to investors, BTCST was not in the business of buying and selling Bitcoin at all.
Below is the SEC complaint filing.
CC image by Abode of Chaos.
Executive Coaching Firm Strategic Development Lets Clients Pay in Bitcoin
North Carolina Executive Coaching Firm Starts Accepting Bitcoin
Strategic Development, Inc., is a leadership development firm based in Research Triangle Park, North Carolina, and announced this week that it is the first such firm in North Carolina to offer clients the ability to pay in Bitcoin.
George Smart, Managing Partner at Strategic Development, said, “Our entrepreneurial clients are always looking for innovation and opportunities, including choice and flexibility in payment methods. As Bitcoin rises in prominence and use in the increasingly unstable global economy, so does the need to offer a universal digital currency payment option.”
Strategic Development is no stranger to payment innovation. In 1997, it was the first consulting firm in North Carolina to accept VISA, Mastercard, and American Express for professional services.
Bitcoin is increasingly being adopted as a global payment method because transactions are virtually instant, free, and nearly anonymous.
It is also gaining international popularity because it can accept payments from users in over 60 countries not served by PayPal, and in from countries where credit card use or acceptance are restricted because of political, fraud, and other reasons.
Strategic Development accepts Bitcoin using Mt. Gox, the world’s largest Bitcoin exchange based in Tokyo and Coinbase, a US-based exchange. Clients can use any conventional currency (dollars, euros, etc.) buy and sell Bitcoin through these exchanges for use with Strategic Development and any other businesses accepting Bitcoin.
About Strategic Development, Inc. and George Smart:
Over 400 organizations have trusted Strategic Development over the last 30 years for high-impact, relevant, practical leadership development simulations and executive coaching. Drawing from an MBA from Duke’s Fuqua School of Business plus training from the National Training Lab for Applied Behavioral Science, and the Center for Creative Leadership, Managing Partner George Smart conducts leadership development simulations to Fortune 500 companies and national associations on how to make the workplace less insane and more profitable. For more information, visit http://www.strategicdevelopment.com.
CC image by Dougtone
Top Bitcoin News Last Week: Royal Baby, SatoshiDice, Argentina, and More
Bitcoin News
A roundup of the top Bitcoin news from July 15 to July 21.
Monday, July 15
Tuesday, July 16
Thursday, July 18
Friday, July 19
Sunday, July 21
Work in Silicon Valley? Pay with Bitcoin at Coupa Café in Palo Alto
Coupa Café Starts Accepting Bitcoin
If you work in Silicon Valley, you know of Coupa Café. It’s a coffee shop in Palo Alto where the typical patrons are tech startup entrepreneurs coding away on a Macbook Air while they sip a latte.
Now this trendy coffee shop is becoming a payments pioneer by accepting Bitcoin at the register.
“It’s like when the Internet first started in the ’90s,” said Mike Landau in an interview with Palo Alto Online. Landau is a Facebook software engineer who helped build the technology that enables Coupa Café to accept Bitcoins.
“Bitcoin does two things,” Landau explained. “One is, it’s a currency. But it’s also a medium of transaction. You can imagine it being kind of like PayPal, but completely open source and decentralized. There’s no one company that’s in charge.”
Coupa Café’s cash register rings up a sale in both dollars and Bitcoin. Customers who want to pay in Bitcoin can use an app called Blockchain to scan the cafe’s QR code and send BTC for payment.
Bitcoin Gambling Company SatoshiDice Sold for $11.5 Million
SatoshiDice Sells to Undisclosed Buyer for $11.5 Million
SatoshiDice is an Bitcoin gambling company with a simple concept: send Bitcoins to SatoshiDice, the dice are rolled, and your winnings are sent back to you within 30 seconds in Bitcoin. The company’s revenue model is to apply a transaction fees on each wager (win or lose) of 0.0005 BTC.
Founded by Erik Voorhees, who has recently been based out of Panama City to operate the company, SatoshiDice claims to be the biggest Bitcoin gambling company in the world.
SatoshiDice now also has a new accolade: the first major Bitcoin acquisition. Mr. Voorhees announced on the company’s forum that SatoshiDice was being acquired for 126,315 BTC, or around $11.5 million.
SatoshiDice is being sold, in full, to a new company that will take over all ownership, operations, and management. The total sale price is 126,315 BTC, or 0.00126315 BTC per share.
To put the acquisition in perspective, the buyer paid about 1.1% of available Bitcoins to buy the company.
The buyer has not been disclosed, though some reports suggest the acquirer is a large gambling entity looking to expand into Bitcoin.
Up until the sale, shares of SatoshiDice have been traded on Romanian Bitcoin exchange MPEx under the ticker S.DICE. Voorhees clarified what this sale means for shareholders.
According to the MPEX Agreement, MPEX holders are entitled to receive 0.00126315 BTC per share, alongside other private owners. However, for the good of the MPEX holders and for the sake of the general Bitcoin community, which the site always has intended to support and nurture, SatoshiDice has arranged to pay MPEX holders an additional .00223685 BTC per share bringing the total to 0.0035 BTC per share.
This is a 277% premium over the sale price and a roughly 175% premium over the current market price of S.DICE shares on MPEX. It is also roughly equivalent to the average price of S.DICE shares at IPO (though BTC was $12 back then, and over $90 today).
As per the S.DICE agreement, asset owners do not have voting rights to effect operational changes, nor any rights to negotiate nor block a full buyout of the company. Nevertheless, SatoshiDice has kept the interests of the asset holders in mind throughout this negotiation process, and has intended to treat these holders fairly, above and beyond contractual obligations.
The next day, Voorhees confirmed the acquisition.
UPDATE July 18, 2013: SatoshiDICE was sold in full to a private party. S.DICE has been delisted and closed. S.DICE holders were paid .0035 BTC per share at close.
In liberty,
-Erik
SatoshiDice was launched in April 2012 when Voorhees acquired the technology from a Reddit forum user.
I have been running a bitcoin casino for a little over a week. It has made 146 BTC with an investment of around 45 BTC to get it started. I don’t want to run it any more because I am concerned about legal issues.
I’ve completed a deal with someone and the new site is up at http://satoshidice.com/
In 2012, SatoshiDice earned 33,310 BTC.
In March 2013, it started blocking IP addresses in the United States due to fears of U.S. regulation, given the laws governing online gaming. A company spokesperson told CoinDesk at the time, “SatoshiDice is building a ubiquitous global brand in the bitcoin space, and must take the coercive threat of government seriously.”
