Tag Archives: regulation
China Tells Banks They Cannot Operate in Bitcoin; Price Falls Sharply
The People’s Bank of China has issued a notice restricting banks from handling Bitcoin.
“The Notice clarifies the status of Bitcoin,” read the statement. “Bitcoin is not issued by a monetary authority, it does not have the status of legal tender and obliged acceptance status of currency, it is not currency in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market. But, the general public have the freedom to participate in Bitcoin trading as a commodity trading on the internet on the condition they carry their own risk.”
The notice further clarified that banks should not buy or sell Bitcoin, and any organization that operates in Bitcoin should pay special attention to Know Your Customer (KYC) requirements and other regulation that targets money laundering.
In the notice, Bitcoin was called a “virtual currency.” In 2009, the Chinese government first defined this term when it outlawed “gold farming,” the practice of selling currency from the popular game World of Warcraft for real money.
The implications of this notice are as follows:
- Bitcoin trading platforms are allowed to operate, as long as they comply with applicable laws
- Consumers can buy and sell Bitcoin
- Banks are not allowed to handle, buy, or sell Bitcoin. Therefore, financial institutions will not be able to purchase large volumes of the currency.
- This may ultimately slow down the trading volume growth we have seen in China if large financial institutions are prohibited, but should not cause a catastrophic effect to the currency’s value.
In response, the price of Bitcoin on the exchange BTCChina, and across the world, fell sharply then stabilized.
BTCChina 2-day price/volume chart from BitcoinCharts.com
Below is the full notice translated by Reddit user felix123.
In order to protect the public’s property rights, to protect RMB’s official currency status, to prevent money laundering risk and to protect financial stability, the People’s Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission jointly issued “The People’s Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission Notice on preventing Bitcoin risk” (2013 no.289, “Notice” hereinafter)
The Notice clarifies the status of Bitcoin. Bitcoin is not issued by a monetary authority, it does not have the status of legal tender and obliged acceptance status of currency, it is not currency in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market. But, the general public have the freedom to participate in Bitcoin trading as a commodity trading on the internet on the condition they carry their own risk.
The Notice requires, at this stage, all financial institutions and payment institutions must not use Bitcoin to set price for product or services, not buy or sell Bitcoins, not act as a market maker for Bitcoins, not underwrite insurance related to Bitcoin or cover Bitcoin in insurance, not directly or indirectly provide other Bitcoin related services, including registering, trading, clearing or settlement; not accept Bitcoin or use Bitcoin as payment tool; not start a Bitcoin and RMB or foreign currency exchange; not start a Bitcoin saving, trust or mortgage service; not issue Bitcoin related financial services; not use Bitcoin as the investment in trusts or funds.
The Notice requires, that Bitcoin websites that act as the main trading platform, should follow the Telecommunications Act and the Regulation on Internet Information Service, and register according to law. Also, because Bitcoin has a higher risk of money laundering and being used by criminals, the Notice requires the relevant organizations to follow the requirements of the Anti-Money Laundering Act and fully comply with the legally required anti-money laundering procedures like KYC and suspicious transaction reporting, to prevent Bitocin related money laundering risks.
To prevent virtual goods like Bitcoin using the name of “virtual currency” to over-promote, damaging the public interest and the RMB’s position as legal tender, the Notice requires financial organizations and payment organizations in their daily tasks to use the correct concept of currency, to emphasize on public education about currency, and to add to public financial knowledge education the contents of correct knowledge of currency, correct views of virtual goods and virtual currency, rational investment, control of investment risk and defending one’s financial safety, in order the public have correct views on currency and investing.
In the future, the People’s Bank will do its duty and continue to closely monitor the Bitcoin trend and related risks.
Below is the Notice
People’s Bank of China
Ministry of Industry and Information Technology
China Banking Regulatory Commission
China Securities Regulatory Commission
China Insurance Regulatory CommissionNotice on preventing Bitcoin risk
Recently, a so-called Bitcoin calculated using certain computer programs gained widespread worldwide attention, there are also organizations and persons in China taking this opportunity to promote Bitcoin and related products. In order to protect the public’s property rights, to protect RMB’s official currency status, to prevent money laundering risk and to protect financial stability, according to the People’s Bank Act, the Anti-Money Laundering Act, the Commercial Bank Act, Telecommunications Regulations etc, the following notice is made:
1 Correct knowledge of Bitcoin
Bitcoin has four main characteristics: no central issuer, limited quantity, no geographical limits and anonymity. Although it is called currency, it is not issued by a monetary authority, it does not have the status of legal tender and obliged payment status of currency, it is not currency in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market.
2 Financial institutions and payment institutions must not start Bitcoin related business
At this stage, all financial institutions and payment institutions must not use Bitcoin to set price for product or services, not buy or sell Bitcoins, not act as a market maker for Bitcoins, not underwrite insurance related to Bitcoin or cover Bitcoin in insurance, not directly or indirectly provide other Bitcoin related services, including registering, trading, clearing, settlement; not accept Bitcoin or use Bitcoin as payment tool; not start a Bitcoin and RMB or foreign currency exchange; not start a Bitcoin saving, trust or mortgage service; not issue Bitcoin related financial services; not use Bitcoin as the investment in trusts or funds.
3 Strengthening regulation of Bitcoin websites
According to the Telecommunications Act and the Regulation on Internet Information Service, websites that provide Bitcoin services like registration, trading etc should register with the telecommunications regulation authorities.
The telecommunications regulation authorities, following the determinations and punishment opinions of the relevant management authorities, should close down illegal Bitcoin sites according to law.
4 Prevent possible Bitcoin money laundering risk
Branches of the People’s Bank should closely monitor the trends and activities Bitcoin and other similar virtual commodities with the characteristics of anonymity and easy cross-border access, seriously consider its money laundering risk, research and implement targeted preventative measures. The branches should include lawfully established organizations that provide Bitcoin registration or exchange services in its area into its anti-money laundering monitoring, and supervise them to strengthen their anti-money laundering monitoring.
Bitcoin websites should earnestly carry out their anti-money laundering duty, confirm the identities of their users, have them register using their real names, and register their name and ID card number. If financial institutions, payment institutions or Bitcoin websites discover suspicious transactions involving Bitcoin or other virtual commodities, they should immediately report it to the China Anti-Money Laundering Monitoring and Analysis Center, and cooperate with the People’s Bank’s investigation; if they find evidence of fraud, gambling, money laundering using Bitcoins, they should report it to the police.
5 Strengthening public education on money knowledge and investment risk
Departments, financial organizations and payment organizations should in their daily tasks teach the public the correct concept of currency, to emphasize on public education about currency, and to add to public financial knowledge education the contents of correct knowledge of currency, correct views of virtual goods and virtual currency, rational investment, control of investment risk and defending one’s financial safety, in order the public have correct views on currency and investing.
Financial monitoring authorities can set implementation details according to this notice
Would the People’s Bank branches please distribute this Notice to financial organizations and payment organizations in their area. Any new situations or questions arising from this notice please report promptly to the People’s Bank.
Senate Committee Listens to Bitcoin Experts, Expresses Open-Mindedness
Expert Witnesses Ask Government to Enable Innovation
Today, a select group of U.S. officials and expert witnesses convened in Washington to discuss the current challenges facing law enforcement and regulatory agencies before the U.S. Senate Committee on Homeland Security and Governmental Affairs, in a hearing called “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies”.
Senator Tom Carper, a Democrat from Delaware and Chairman of the Homeland Security and Governmental Affairs Committee, presided over the hearing.
Bitcoin Like the Early Internet
Senator Carper opened his first question by comparing Bitcoin and digital currencies to the early days of the Internet. When the Internet was first growing in popularity, a lot of people jumped to concerns about cyber crimes, consumer protection, and privacy. But no one, at the time, could have imagined some of the achievements, from Google search to YouTube videos to connecting the world through social networks. Sen. Carper asked the first panel to comment on this comparison.
The panel, composed of representatives from FinCEN, the Attorney General, and the Secret Service, called the comparison relevant. There is a lot of innovation that can come from digital currencies. Governmental bodies need to stop crimes without stifling progress.
“We want to operate in a way that does not hinder innovation,” said Jennifer Shasky Calvery, Director of FinCEN, It’s important to “strike a balance,” she said.
Mythili Raman, Assistant Attorney General for the Criminal Division, added “virtual currency services in and of themselves are not illegal, so long as they obey laws.” She said that her group recognizes that there are legitimate uses of digital currency services.
Who Moves Faster? Criminals or Law Enforcement
Senator Carper also asked the panel how equipped and capable they felt in chasing digital currency criminals. “How confident are you that we will be able to deal with the potential criminal behavior in virtual currencies?” he asked. And, “What role does the legislative body have to play to make sure you have the resources you need?”
Edward Lowery of the Secret Service explained that law enforcement agencies have been successful in stopping virtual currency related crime. The Secret Service, in particular, has investigated many first-of-their-kind criminal activities.
Liberty reserve was called out as the largest money laundering case ever. Silk Road was mentioned as well.
Lowery made an important clarification that, although Bitcoin is in the spotlight, the predominant Eastern European cyber-criminals have not gravitated toward Bitcoin, but rather toward digital currency in locales with less aggressive laws.
Raman also asserted confidence. “We’re nimble and aggressive enough to keep up with the threat,” she said. But added that they are not ignorant to the challenges such as anonymity, working with other countries who have differing degrees of the law, and so on.
Bitcoin for Good
With so much emphasis on financial crimes, Sen. Carper asked for examples where digital currency has worked for the good?
Some of the examples provided included serving the unbanked or underbanked in our society through structures like stored value cards. Also online banking was called out as a way to make business more efficient and therefore better for the consumer.
Raman stated that there is “plenty of opportunity for virtual currency to operate within existing laws.” With respect to addressing financial crimes, we just need to “keep pace” and “remain vigilant.”
Bitcoin Experts Encourage Government to Build Supportive Environment for Innovation
In the second panel, Bitcoin experts from the Bitcoin Foundation, Circle, and George Mason University commented on what was needed to encourage innovation and consumer protectionism.
Patrick Murck, General Counsel for the Bitcoin Foundation, gave an overview of Bitcoin in his opening statement, calling it “like email for money” and “programmable cash.” He emphasized that while we think about Bitcoin as solely a currency now, it could have wide-spread benefits to non-financial services applications like identity verification and property management.
Murck said that Bitcoin can reduce exploitation of underbanked people, even in the U.S. where financial exclusion is a problem. “Access to financial services directly correlates to increases in dignity and self-liberation,” said Murck. Bitcoin can help move people from being unconnected to connected via the digital economy.
Law enforcement may need to develop new methodologies, Murck said while at the same time complimenting the examples of success in adapting to increasingly digital and connected world.
Murck said that the Bitcoin Foundation is “looking beyond the Silk Road,” adding that the markets (the price of Bitcoin) expressed relief when the Silk Road owner and operator was arrested.
Related: The Fall of Silk Road
Who is Bitcoin?
There was some confusion expressed by Sen. Carper about who originally created Bitcoin and who manages it.
“It wasn’t Al Gore, was it?” joked Carper, to which Jerry Brito from the George Mason University Mercatus Center jested back, “he hasn’t denied it!”
Fundamentally, Sen. Carper wanted to know what the risk was in that the original author of Bitcoin, Satoshi Nakimoto, has remained anonymous.
Mr. Murck explained that the Bitcoin Foundation exists to serve the Bitcoin ecosystem, but there is no Bitcoin company.
Bitcoin is decentralized and therefore is inherently transparent, making it difficult for sustained illicit behavior.
While everyone is grateful for the work of Satoshi Nakimoto, said Mr. Murck, more than half of the original codebase has been rewritten. Mr. Brito added that because the protocol is open-source, some of the top technical minds have scrutinized it.
“At the moment, whoever Satoshi is seems largely irrelevant.” said Mr. Murck, adding that maybe that was by design.
Jeremy Allaire adds the Entrepreneur’s Perspective
Jeremy Allaire, veteran entrepreneur and CEO of the newly formed Circle Internet Financial, provided a perspective on the challenges of growing new Bitcoin businesses.
Mr. Allaire confidently asserted that digital currency, and Bitcoin in particular has the potential to decrease business costs, decrease fraud risk, and increase consumer privacy. In short, it’s a game-changer.
He added, “it’s important that federal authorities understand how [Bitcoin] works.”
Mr. Allaire explained that the Internet had been at the center of global innovation in recent decades, especially thanks to open platforms, but financial services have been largely insulated until now. “The same level of advancement can be achieved with Bitcoin,” said Allaire.
For his part, Mr. Allaire’s new high profile startup, Circle, intends to fully comply with all applicable laws, has registered with FinCEN and is applying for licenses with states.
Read: Circle, A High Profile Bitcoin Startup, Raises $9M with Seasoned Team
Mr. Allaire suggested that there are risks of not moving fast enough as regulators. While US regulators and law enforncement are justifyable focused on bad actors, there is “also a risk if government doesn’t enable new startups to drive financial services innovation.” The US could fall behind on innovation, he said, explaining that the largest Bitcoin exchanges are now in China and Europe.
Regulatory Tools are Sufficient
It seemed like the areas of greatest agreement were three-fold.
First, everyone on the panel agreed that Bitcoin has the potential for incredible innovation. Second, regulatory bodies must understand the digital currency in a swift manner. And third, the existing regulatory tools are sufficient to govern the use of Bitcoin.
Mr. Murck gave an example of how businesses that even have the word “Bitcoin” in their description are getting bank account applications rejected due to fear and uncertainty about a currency that is only 4 years old.
Mr. Brito compared Bitcoin to 3D printing, saying that 3D printing can be used for good, but it can also be used to create illicit guns. We must understand that the positives outweigh the risks.
With respect to the financial services regulation as it exists, Mr. Allaire acknowledged that the “bar needs to be higher for financial services in the U.S.” He compared the creation of a Bitcoin exchange to a photo sharing app like Instagram. “It’s not appropriate for it to be as easy for financial services,” said Allaire, explaining that Circle raised the appropriate capital upon launch to secure licenses and hire experts.
Mr. Murck made reference to the reciprocity framework in the EU, offering that legislators could look at that as a model. This framework allows businesses to more swiftly get licensed in an EU country if they have been licensed by at least one EU country already.
Wrapping Up: Quoting Einstein and Mrs. Einstein
In closing the two-panel session, Senator Tom Carper quoted Albert Einstein and his wife
Einstein was known to have said, “in adversity lies opportunity,” which Sen. Carper felt was an apt analogy to the current state of Bitcoin.
With respect to his own understanding of the digital currency, he quoted Mrs. Einstein who, when asked of her familiarity with her husband’s work on relativity, responded, “I understand the words, but not the sentences.”
Senator Carper said that he is trying to understand and wants to find solutions that minimize the bad while maximizing the good.
You can watch the 2.5 hour session in entirety on C-SPAN.
The price of Bitcoin rose sharply to $650 following the conclusion of this public hearing.
Coin Validation Causes Controversy Among the Bitcoin Community
Tracking System Proposes New Regulatory Power over Bitcoin
As the digital currency Bitcoin has grown in popularity and price, the increased attention has also brought about threats of regulation and control that could stifle the growth and the original purpose of a semi-anonymous, decentralized protocol.
This week, that threat is in the form of a new company called Coin Validation, at least in the eyes of the avid Bitcoin community.
Coin Validation is a private company founded in 2013 which interfaces with United States government and regulatory bodies in order to facilitate the legal, regulated, and compliant operation of Bitcoin-based money service businesses in the US. Coin Validation aims to provide Bitcoin businesses with a service and guide for operating and remaining compliant in US regulated markets.
More specifically, Coin Validation aims to build a database of real identities connected to Bitcoin wallet addresses, with the goal of finding and weeding out nefarious or illegal activity. The company believes that they can help grease the skids of regulation by offering a solution for business owners to opt in to the tracking program which the government can monitor.
Coin Validation was founded by three individuals: Matt Mellon, former chairman of the New York Republican Party Finance Committee, Alex Waters, former CTO of Winklevoss-backed BitInstant, and Yifu Guo, a young entrepreneur and owner of Avalon who has made a fortune selling Bitcoin mining equipment.
Photo by Forbes. Read more about Coin Validation at Forbes.com
Fear and Controversy Among Bitcoiners
The news of this proposal comes at an interesting time. Bitcoin has soared to its highest price ever, over $400, and mainstream media is all over it. The anonymous drug marketplace Silk Road was seized by federal authorities, and yet a Silk Road 2.0 popped up less than a month later. And the government is holding hearings next week to discuss the key risks and opportunities with Bitcoin business leaders in Washington.
Bitcoin was born in 2009 as a counter-culture vehicle. It was created by a person, or group, that no one has ever met and only goes by the pseudonym Satoshi Nakamoto. The system was designed to allow for commerce and trade without trust or government control. Anarchists and libertarians immediately fell in love with the crypto-currency and its perfect design.
But as the Bitcoin economy has grown, now over $5 billion, the currency has moved from the archives of Reddit into the pages of the Wall Street Journal, and more sophisticated players have entered the market to try to sustain growth. One of these is the Bitcoin Foundation, a non-profit organization that “standardizes, protects and promotes the use of Bitcoin cryptographic money for the benefit of users worldwide.” Another is the for-profit startup Circle Internet Financial, founded by veteran Jeremy Allaire.
Read: Circle, A High Profile Bitcoin Startup, Raises $9M with Seasoned Team
Some of the early adopters of Bitcoin, however, seem to resent these new organizations like a child resents his or her parents at a certain age.
“What uniqueness about Bitcoin will be left if it remains no more an open source currency? It will turn useless and won’t serve the actual purpose that Satoshi made it to” wrote one user on a Bitcoin forum.
Another user wrote, “BOYCOTT anything that places control of bitcoin to any authority (Verisign, US FinCEN, Bitcoin Foundation or Anything) – instead of being a very decentralized payment network and digital currency.”
Other users have provided more of an academic criticism of the Coin Validation scheme. In addition to tracking, there is a proposal to “taint” Bitcoins that have been used by bad actors, creating what is called a redlist. Think of this like confiscating money used in a drug deal. Here is an explanation of redlisting by Mike Hearn, an integral member of the Bitcoin Foundation.
Consider an output that is involved with some kind of crime, like a theft or extortion. A “redlist” is an automatically maintained list of outputs derived from that output, along with some description of why the coins are being tracked. When you receive funds that inherit the redlisting, your wallet client would highlight this in the user interface. Some basic information about why the coins are on the redlist would be presented. You can still spend or use these coins as normal, the highlight is only informational. To clear it, you can contact the operator of the list and say, hello, here I am, I am innocent and if anyone wants to follow up and talk to me, here’s how. Then the outputs are unmarked from that point onwards. For instance, this process could be automated and also built into the wallet.
The problem with using a redlist lies in the way bitcoins are fungible by design. Tainting bitcoins should simply take them out of the economy, but instead sophisticated criminals could use Bitcoin laundering services to exchange tainted bitcoins with clean units, and the tainted currency could end up in the wallet of an unsuspecting consumer who would end up holding the bag.
Overall, it creates an additional layer of complexity possibly tied to a central authority on what is an elegant, decentralized protocol.
Who Would Benefit from Coin Validation?
The biggest benefit from a Coin Validation concept at scale would come to Bitcoin exchanges, like Coinsetter, Mt.Gox, and Bitstamp. Each of these exchanges require users to jump through hoops to validate their identity, and run the risk of aiding criminal activity if their exchanges are used for laundering or illegal trade. A Coin Validation scheme would pass the buck from the exchanges to a centralized system of trust.
Another group that might benefit is small businesses that want to accept Bitcoin for payment. Currently, any merchant who starts accepting Bitcoin has similar risks to those facing exchanges. Would a service that certifies Bitcoins and Bitcoin wallets make this easier? Surely. But would it make payment processing more expensive? Undoubtedly.
Coin Validation’s proposal is not too dissimilar from some of the early services to come to the Internet, like SiteAdvisor or TRUSTe. The goal of those services was to help consumers know whether a website was trustworthy or not. Coin Validation wants to do the opposite, help businesses and governments know if customers are trustworthy.
What’s Next?
It’s unclear how much momentum Coin Validation has, and it’s also unclear whether the U.S. Government cares about the concerns of the most vocal Bitcoin purists.
One thing is clear though: any attempt to centralize authority on Bitcoin will be met with fierce resistance from early adopters. And it’s important to remember that early adopters happen to be the same people who control Bitcoin mining, the critical step in providing liquidity and sustainability to the currency.
Silk Road 2.0 Launches, Government Authorities and Users React
Silk Road is Reborn With Stronger Security Measures, Senate Responds Immediately
A so-called Silk Road 2.0 has been launched, just one month after the original Silk Road was seized and its operator, Ross William Ulbricht, was arrested. Silk Road was an anonymous online marketplace that mainly enabled the buying and selling of drugs for Bitcoin. Over 2 years, the marketplace generated $1.2 billion in transaction revenue.
Read: The Fall of Silk Road
“It is with great joy that I announce the next chapter of our journey. Silk Road has risen from the ashes, and is now ready and waiting for you all to return home,” wrote a user in a launch announcement on Reddit. “Over the last 4 weeks, we have implemented a complete security overhaul. This overhaul marks the dawn of a brand new era for hidden services.”
In response to the unearthing of a new Senator Tom Carper (D-Del.), Chairman of the Senate Homeland Security and Governmental Affairs Committee, released a statement on the launch of the Silk Road 2.0:
This new website – launched barely a month after Federal agents shut down the original Silk Road — underscores the inescapable reality that technology is dynamic and ever-evolving and that government policy needs to adapt accordingly. Rather than play ‘whack-a-mole’ with the latest website, currency, or other method criminals are using in an effort to evade the law, we need to develop thoughtful, nimble and sensible federal policies that protect the public without stifling innovation and economic growth. Our committee intends to have that conversation – among others – at our hearing this month on virtual currency.
Chairman Carper and Dr. Coburn’s committee on Homeland Security and Governmental Affairs began a formal inquiry into virtual currencies in April 2013. In August 2013 Chairman Carper and Dr. Coburn wrote to the Departments of Treasury, Homeland Security, and Justice, as well as the Securities and Exchange Commission, Commodities Futures Trading Commission, and the Federal Reserve.
Here’s a screenshot of the homepage. Note the tongue-and-cheek use of the Federal seizure notice.
Silk Road 2.0 uses the Tor protocol to provide anonymous access to the site. That’s why you see the .onion at the end of the URL.
Reaction from Users: Excitement and Caution
The reaction for users of the original Silk Road is best understood by reading Reddit threads on the topic.
Immediately after the demise of the original Silk Road, users on Reddit began discussing the development of a Silk Road 2.0, one that would be more protected from the pitfalls that caused the collapse of the original marketplace. Users discussed having stricter requirements around using Tor, 2-factor authentication, and Bitcoin laundering.
With the launch of Silk Road, some users are jubilant. “DPR is dead, long live DPR!” wrote one Reddit user. DPR refers to the Dread Pirate Roberts, the alias used by Ulbricht during his reign over the original Silk Road.
Other users are cautious. “Does anyone know if it tumbles coins?” asked one user in a forum. Tumbling coins refers to the process of laundering Bitcoin. Since every Bitcoin transaction is stored in a public ledger, you have to run Bitcoin through a series of wallets before cashing them out to distance yourself from the original transaction. “This is important. Bitcoins can be tracked,” replied one user. Another added, “Bitcoinfog. Don’t trust others to tumble for you.” Bitcoinfog is a Bitcoin laundering service that takes a 1-3% fee.
Some users went right to conspiracy theory, suggesting that the new site was a honeypot, or trap set by the federal authorities. Here was one elaborate idea:
My prediction – Ulbricht was offered a deal where if he cooperated, he’d get a reduced sentence. Some # of the former admins were ID’d and flipped as well. The new PGP key addition is to be able to more closely tie a specific person to an online account making for easier convictions.
They’ll let this run for 1-2yrs, logging and tracking everything, maybe making incidental arrests where they can get away with it, without letting on that the site is compromised. At the end of the run, they’ll coordinate a massive global arrest of everyone involved to prevent tipoffs, then we’ll see a big news story after the fact bragging about the operation and how they pulled it off.
Impact to Bitcoin
There was no noticeable negative impact to Bitcoin following this announcement. In fact, the price of Bitcoin continued to soar past $300 in all-time high this week.
But longer term, if Bitcoin is part and parcel to anonymous drug marketplaces and anti-government sentiment, the digital could come under further regulatory scrutiny.
Silk Road 2.0 Launch Announcement
In an extensive post, a user on Reddit announced the launch of Silk Road 2.0 with the title “We rise again” which we have syndicated here.
Dear Community
It is with great joy that I announce the next chapter of our journey. Silk Road has risen from the ashes, and is now ready and waiting for you all to return home: http://silkroad6ownowfk.onion
Welcome back to freedom.
Over the last 4 weeks, we have implemented a complete security overhaul. This overhaul marks the dawn of a brand new era for hidden services, and it would not have been possible without the patient support of this community. So for waiting patiently; for offering encouragement; for keeping the community spirit alive in Silk Road’s temporary absence; for all of this and more, each of you has my deepest and most sincere gratitude.
It took the FBI two and a half years to do what they did. Divide, conquer and eliminate was their strategy… but four weeks of temporary silence is all they got. And as our resilient community bounces back even stronger than ever before, never forget that they can only ever seize assets – they can never arrest our spirit, our ideas or our passion, unless we let them.
We will not let them.
Please enjoy the marketplace, but be aware – although the site is both functional and stable, we are still in the early phases of development. Despite us having worked through any major bugs that might prevent full-functionality or compromise security, you may notice minor bugs. Please bring these to our attention. More so, even though security has been our top priority over the last few weeks, we encourage you to continue reporting both theoretical and even proven exploits. You will be rewarded for doing so.
Please also be aware, that because we expect a large surge in Bitcoin deposits when we open up our transaction system, there may be delays with account withdrawals and deposits initially. These delays should become less as the marketplace settles, but at least for the earlier stages, please do not report coins as missing unless 12 hours or more have elapsed.
You might also notice that the re-launched marketplace lacks a number of features from the original marketplace – we will be working hard over the next few weeks to implement improvements, and we continue to study each and every post made in the Feature Requests forum. Your opinions matter to us, and we will not neglect the thoughts of the community.
We are proud to announce though, that our new security measures include emergency strategies to ensure that, in the event of Silk Road’s demise once more, no member will lose their coins. We have learned hard lessons from the unfortunate events of recent weeks, and the man hours that have gone into this new release are phenomenal. We look forward to helping Silk Road grow on the back of these lessons, and look forward to helping this community flourish even more beautifully than before.
We have already committed a large percentage of our revenues to good causes, charities, and organizations who support our cause or have similar interests. We are also contributing back to the Tor network with our relay fund.
But without a doubt, the re-launch of our beloved marketplace will create a ripple throughout the world’s various media channels, and not all of these channels will see our cause as positive. You don’t need telling that there are very powerful media outlets controlled by various world governments, who will seek to muddy our name and reputation. But it is up to us to embrace this newfound exposure in mainstream media, rather than hide from it – and for this reason, I have chosen to speak briefly with a number of journalists who I am confident will report this memorable day without the pull of governmental strings. I have also conducted an exclusive interview with Mashable. In light of the FBI’s recent ‘victory’, it would be impossible for Silk Road to stay off the radar – it is therefore our responsibility to make sure that our mark on the radar is the right one. So I would advise you all to prepare yourself for a spike in media attention, and to review your personal security measures to ensure your anonymity is protected.
We will be hiring staff to handle Silk Road’s marketing shortly – formal offers may be made to members who have already demonstrated their marketing prowess.
And it goes without saying that if you are in touch with anybody who may not be aware that Silk Road has risen once more, now is the time to spread the word. Open communication with your old suppliers and customers; let this wonderful news be taken to all corners of the Tor network and beyond.
Let us never forget this recent hurdle in our battle for freedom. But let us not allow it to stop our fight, either – it is now time to simply pick ourselves back up, dust ourselves off, and continue fighting this revolution like we’ve never fought it before.
I’m proud to have you all at my side.
Yours Loyally
Dread Pirate Roberts
Top Bitcoin News Last Week: Tradehill, Regulation, ATM, FinCEN, More
Bitcoin News
A roundup of the top Bitcoin news from August 26 to September 1:
Tuesday, August 27
Wednesday, August 28
Thursday, August 29
Friday, August 30
