Tag Archives: government

Germany Ministry of Finance Declares Bitcoin is Private Money

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail

Bitcoin

Germany Declares Bitcoin is Private Money

It seems that every government is starting to weigh in on Bitcoin. First, the Bank of Thailand advised local companies that Bitcoin is illegal. Then, a federal judge in Texas wrote that Bitcoin is money in a ruling about a Bitcoin ponzi scheme.

Now, Germany has ruled that Bitcoins are private money.

“The German Ministry of Finance does not classify bitcoins as e-money or as a functional currency; they cannot be regarded as a foreign currency. Nevertheless they have to be subsumed under the German term of ‘Rechnungseinheit’ as a financial instrument,” Martin Chaudhuri from the Ministry of Finance told CoinDesk. Rechnungseinheit translates to unit of account in English.

Via MarketWatch.

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail

Finding Business Model Opportunities in Bitcoin – Inside Bitcoins NYC

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail

Coinsetter Jaron Lukasiewicz Inside Bitcoins NYC

Trends to watch and how to think about Bitcoin as a business

At the Inside Bitcoins NYC conference, Coinsetter CEO Jaron Lukasiewicz spoke to a packed crowd. His message: the current financial system is outdated and relies on critically dated infrastructure.  He believes that “people involved in Bitcoin [are saying] this is not acceptable anymore.”

Exploring the current financial system he points to three to five fund transfer times under ACH payments and drawing experience from his previous startup in ticketing, companies paying over 40% of revenues out in credit card fees.  Basically, in 2013, it is still exceptionally difficult to send money to a friend and this is leading to a customer revolution.

Today, he proposes, Bitcoin is the dominant virtual currency.  Not simply in terms of transactions and value, but based on awareness – including awareness outside current users of the market.  The first mover advantage is significant and Mr. Lukasiewicz asks us to spend time thinking about how it has the potential to become an “IP address for money.”

Coinsetter is a leveraged forex trading platform, focused on active traders.  Originally he questioned the number of exchanges being set up at the moment and why there isn’t an original business model.  On reflection he thinks this is actually important. The more liquidity that comes into the Bitcoin system, the better.  It will draw more users; innovation and a greater focus on customers.  The latter being a key concern for Mr. Lukasiewicz, there is “room for a lot more exchanges to come online, but it is important to focus on a particular customer.”

Bitcoin Companies Working with Government and Banks

Focusing on the themes that will lead to business opportunities, he has concerns about government regulation and how banks will interact with Bitcoin.  One of his theories is that anonymous financial transfer systems will not be easily integrated into the current banking system.  Know Your Customer concerns and regulations will be a significant hurdle, along with security for institutions with large holdings.  When challenged on these points during Q&A, Mr. Lukasiewicz clarifies that he sees this as layers added on top of the current system, rather than a change to current Bitcoin protocols – apparently to the great relief of the audience.

In conclusion, he sees the best opportunities for those companies that firstly, concentrate on Bitcoin as a payments protocol, and secondly, have a strong focus on having a strong customer proposition and delivering an appealing experience.

 

Authored by Michael Smouha and Ronan Murphy, Contributors to On Bitcoin

 

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail

California Sends Cease and Desist Letter to Bitcoin Foundation

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail

CA Cease & Desist Bitcoin Foundation

California Goes After Bitcoin Foundation with Cease and Desist Letter

The State of California has concerns about Bitcoin.

The California Department of Financial Institutions has sent a cease and desist letter to the Bitcoin Foundation for engaging in the “business of money transmission without having obtained the license or proper authorization required by the California Financial Code.”

The penalties are severe, according to Forbes who first broke this story:

If found to be in violation of California Financial Code, penalties can be severe ranging from $1,000 to $2,500 per violation per day plus criminal prosecution which could result in fines and/or imprisonment. Additionally, it is a felony violation of federal law to engage in the business of money transmission without the appropriate state license or failure to register with the U.S. Treasury Department. Convictions under the federal statute are punishable by up to 5 years in prison and a $250,000 fine.

Below is a copy of the actual cease and desist letter. The Bitcoin Foundation has 20 days to respond in writing.

 

 

Via Forbes.

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail

Liberty Reserve Shut Down; What Will Happen to Bitcoin?

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail

Liberty Reserve Shutdown Bitcoin

Liberty Reserve Shutdown; What About Bitcoin?

Online currency exchange Liberty Reserve was shut down after allegations of laundering $6 billion. The New York Times reported:

The currency exchange, Liberty Reserve, operated beyond the traditional confines of United States and international banking regulations in what prosecutors called a shadowy netherworld of cyberfinance. It traded in virtual currency and provided the kind of anonymous and easily accessible banking infrastructure increasingly sought by criminal networks, law enforcement officials said.

So, what is the impact on Bitcoin? Is Bitcoin next, some media outlets pondered. Well, there are a variety of opinions:

The New York Times reflected on the differences between Bitcoin and Liberty Reserve, commenting that Bitcoin is not anonymous yet, but could be.

Contrary to conventional wisdom, Bitcoin is not anonymous. In fact, security experts say that if prosecutions like Liberty Reserve continue, the most likely targets are major payment systems like WebMoney and eForexGold, payment systems that security experts contend allow their users to move capital anywhere in the world without verifying their identities.

The Washington Post saw more similarities between Liberty Reserve and Bitcoin.

Of course, that description could just as easily describe Bitcoin. Anyone can create a new address for accepting bitcoins and then transmit funds to other Bitcoin addresses without furnishing identifying information. This feature has raised concerns that the currency has been used for activities such as drug dealing or illegal gambling.

Forbes saw a canary in the coal mine, asking is Bitcoin next.

Will prosecutors move on to shutting down Bitcoin (BTC)? After all the parallels between BTC and LR are strong — both are virtual currencies that use an exchange to convert legitimate currencies into electronic ones.

Patrick Murck, legal counsel for the Bitcoin Foundation, wants to avoid that comparison. As he told the Journal, “I think [the Liberty Reserve indictment] is just another giant, flashing warning light to bitcoin exchanges: If you’re not compliant, there are some serious risks, both at the federal and state levels.

Bloomberg was more optimistic, pointing out that Liberty Reserve’s demise is Bitcoin’s gain.

Bitcoin users should embrace the extra scrutiny and welcome the chance to ensure more security, making the currency less accommodating to criminals. Plus, as some Reddit commenters were quick to point out, the demise of Liberty Reserve will mean less competition for Bitcoin.

 

That’s the round up for the major press outlets. What do you think?

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail

Why Bitcoin Excitement is Staying Higher After Crash

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail

Bitcoin Crash Excitement

After the Bitcoin Crash

Although Bitcoin crashed hard last month, there are reasons to keep excited about Bitcoin, as GigaOm reports:

  • Bitcoin is becoming more liquid

Gift card site Gyft has started accepting Bitcoin as payment.

  • Real investors are starting to take Bitcoin seriously

This week, the WSJ reported that Fred Wilson’s Union Square Ventures is investing $5 million in Coinbase, a service that provides an online wallet and easy conversion between BitCoin and traditional currencies.

  • Bitcoin is getting easier to understand

Forbes reporter Kash Hill kept a day to day diary of how she lived on BitCoin (albeit with difficulty) in San Francisco for a week.

  • The government wants a piece of Bitcoin

 Commissioner Bart Chilton of the CFTC — the agency that regulates futures contracts  – says he’s thinking of regulating BitCoin.

 

Read the full report at GigaOm.

Like this? Share it.TwitterFacebookGoogle+LinkedInReddittumblrbufferEmail