Log inRegister

Coin News

chamber of digital commerce The Chamber of Digital Commerce (CDC) has submitted its official comments to the New York Department of Financial Services (NYDFS) regarding the BitLicense proposal. Launched in July, the Washington-based lobbying group led by president and former Forbes contributor Perianne Boring is seeking to influence broader bitcoin policy in the US, while advocating for smart regulation that will support the digital currency industry. The CDC offered a broad critique of the proposal, suggesting that the NYDFS needs to revise its definition of ‘virtual currency’ and ‘virtual currency business activities’ to avoid what it called an “egregious act of regulatory overreach”. The full 10-page filing goes on to suggest that the NYDFS should include a safe haven provision for startups, exempt small businesses from regulation, make better use of existing regulation and extend its current 45-day comment period so that the industry would have more time to fully respond to the proposal. Further, the CDC offered its services to the NYDFS, suggesting that it could provide the department’s members with the necessary information to revise the proposal, and expressed its hope that its comments could provide a similar service to the community. Boring said: “We have been very vocal in encouraging the industry to submit comments to the NYDFS. The Digital Chamber’s comments are posted on our website and the industry is welcome to use them as a resource.” The news follows a similar 6th August filing submitted by the Bitcoin Foundation, and comes amid a period of increasing scrutiny for the proposed laws. In recent days, Circle CEO Jeremy Allaire and the Mercatus Center’s Eli Douardo and Jerry Brito have criticized the regulations. Small business exemption Perhaps most notably, the CDC advocated for small businesses, defined under New York law as those that employ 100 people or less, to be excluded from the law. Businesses that hold under a certain amount of assets, Boring said, should also be exempt from compliance. Boring argues: “Startups are hotbeds for innovation; they often keep larger players on their toes by offering superior products at lower prices. The regulator of a market should avoid building any artificial barrier to entry. Artificial barriers to entry so will deter intelligent minds from developing interest in the market, make existing players complacent and hurt consumers.” The filing further states that the NYDFS is required to accommodate small businesses when writing its proposed rules, saying that this is mandated by Section 202-B of the New York Administrative Procedures Law. Freedom to invest and innovate The CDC also took aim at Section 200.8(b), which relates that bitcoin businesses maintain their profits and earnings in permissible investments denominated in US dollars, arguing businesses should be able to invest profits without restrictions provided they maintain full reserves. Under the proposal, permissible investments include certificates of deposit, money market funds, state or municipal bonds and US government securities. Section 200.10, the provision that requires bitcoin businesses to receive written approval from the NYDFS for any new product, service or activity, was also cited for revision. Arguing that the provision be struck from the proposal, Boring said: “It is dubious that NYDFS has, or can be expected to develop, the technical and business sophistication to make quick and astute decisions as to product development.” She added: “Having a regulator calling the shots in the marketplace, rather than protecting consumers, would cripple any industry and would take NYDFS far outside its competence and appropriate role as regulator.” Images via Chamber of Digital Commerce / Shutterstock Chamber of Digital CommerceNYDFS
Original author: Pete Rizzo

tax accounting
Libra has announced the imminent release of LibraTax, a new software suite designed specifically for digital currency users. The California-based software developer said LibraTax allows individuals and small businesses to comply with the latest IRS regulations and file returns reporting bitcoin, XRP and other cryptocurrency transactions. The suite should become available by the end of August. LibraTax allows bitcoin users to comply with accounting requirements put forth by the IRS earlier this year. Libra said the software will accommodate “all 2013 and earlier” digital currency users as well as those who filed for extensions in spring 2014. “Even those who have already filed will want to amend their tax returns once they discover that reportable capital gains may be significantly reduced with optimized accounting options,” the company said in a statement. Automating bitcoin accounting Libra pointed out that recent IRS guidance on digital currencies requires that taxpayers report digital currency gains and losses on state and federal returns. The problem with this approach is that it requires a lot of manual calculation, making it extremely time consuming and prohibitively difficult. LibraTax was developed to automate the accounting process by retrieving the user’s transaction history from the block chain. Once it collects the necessary data it synchronizes the value with the digital currency’s historical fair market value. All types of taxable events are supported, including donations, gifts and income. This allows the software to dynamically compute gains or losses in a few seconds and Libra says it can output a “tremendously beneficial” report to realize minimized or no reportable gains. More software on the way Libra said it is also working on a new product suite designed for small businesses and enterprise needs. There is still no word on a launch date for the new suite, but the company said pre-registration will commence with the public beta. “Our primary objective is to have approachable, convenient software that simplifies the end-user experience associated with taxpaying – ultimately saving users precious time and money. We’ve accomplished that without a doubt,” said Libra founder and CEO Jake Benson. Libra has been working on LibraTax for months. The company revealed its plans back in April, when it promised to deliver an accounting suite compliant with IRS guidance in the third quarter of 2014. At the time, Benson told CoinDesk that compliance is one of the most critical issues surrounding digital currencies. He pointed out that tax software might not be the “sexiest business” in the digital currency industry, but it is one of the most essential ones at the moment. Image via Shutterstock complianceIRStax
Original author: Nermin Hajdarbegovic

CoinDesk is pleased to announce the launch of its new Bitcoin Sentiment Index (BSI), which goes live at 15:00 (BST) today. The BSI is a measure not of the value buyers and sellers place on their bitcoin, but whether individuals feel the digital currency’s prospects are increasing or decreasing at any given moment. Bitcoin Sentiment Index screenshot Powered by data collected by Qriously, a startup that leverages mobile ad infrastructure to deliver questions to millions of people across the globe, the index provides a snapshot of the general attitude towards bitcoin at the time of questioning. Qriously co-founder and CEO Christopher Kahler told CoinDesk: “The motivation behind the Bitcoin Sentiment Index is to create a time-series tracking the popular sentiment towards bitcoin, in particular how important people think bitcoin will be in the future. A lot of the interest in bitcoin at present is based on assumptions of this data, so we think being able to track and quantify it will be valuable and revealing.” Survey methodology In order to gauge public attitudes to bitcoin, Qriously reaches out to members of the public in the UK and US via its mobile polling service. The firm asks randomly selected smartphone users one simple question: “The importance of bitcoin in 12 months will: (Increase/Decrease/Stay the Same)” In terms of numbers, 85 people are asked the question per day in the UK and 50 in the US. Fifty responses per day is the minimum required to have statistically significant distributions of answers with a seven-day moving average, Kahler said. Qriously ad Qriously then computes a relative ‘sentiment’ score by adding the percentage of positive results to 100 and subtracting the percentage of negative results to create an index value. Instead of daily values, a seven-day moving average is used. The question itself is served in the place of a mobile advertisement unit on both iPhone and Android users, who are selected at random to reflect the average smartphone-using population (as a proxy for the general population). While currently opinions are gauged from individuals in the UK and the US, CoinDesk hopes to expand the geographical range of the survey to other countries in the near future. Voice of the people CoinDesk already provides the Bitcoin Price Index, an up-to-the-minute average price for the digital currency based on data from carefully selected major global exchanges. However, while following the price of bitcoin can be interesting, at times perplexing and sometimes profitable, looking at general attitudes to bitcoin should provide a different kind of insight into state of bitcoin, now and in the future. “The popular opinion, as opposed to expert opinion, for bitcoin is interesting and its utility is intrinsically tied to widespread adoption,” said Kahler. Visit the Bitcoin Sentiment Index here. The sentiment index is something of an experiment for CoinDesk and we value any feedback our readers may have on its value and potential improvements. Please email comments to [email protected]. Bitcoin Sentiment IndexCoinDesksurvey
Original author: CoinDesk

BitX Cover.001 Emerging market-focused bitcoin services firm BitX has completed a SGD$1m ($824,000) seed funding round. Investors include London-based Ariadne Capital, Barry Silbert’s New York-based Bitcoin Opportunity Corp. (BOC) and Palo Alto-based financial innovation investor, Carol Realini. CEO Marcus Swanepoel told CoinDesk the funding would help Singapore-based BitX accelerate its business, furthering international expansion of its wallet and exchange services, assist with merchant acquisition and help the company develop some new products it has in the pipeline. Silbert praised the BitX team’s progress, saying: “In a very short period of time, the BitX team has successfully built a highly scalable, unique model that has enabled them to quickly grow a global footprint and demonstrate success in a number of markets. BitX have a very strong team with a differentiated business model and a great track record.“ Expanding via emerging markets BitX is a subsidiary of Switchless, which acquired the original South Africa-based exchange last October with a plan to expand it internationally. It is building a global cryptocurrency platform that provides bitcoin products and services including wallets, exchanges, merchant integration and APIs to consumers, businesses and developers particularly in emerging markets. Dealing with the variety of regulations and levels of infrastructure in these markets could often slow progress for bitcoin companies, Swanepoel said, adding that he had years of experience working with both authorities and financial institutions in such places, and remained confident. Of Silbert’s Bitcoin Opportunity Corp, he said: “They’re bullish on emerging markets, so it plays well to our investment hypothesis.” The need for and impact of cryptocurrencies will be the biggest in those markets, he said. BOC has also recently funded Mexico’s Volabit and India’s Unocoin, both bitcoin exchanges. BitX’s focus on emerging markets has lead to impressive momentum for the business. It now operates bitcoin wallet services across Africa, South East Asia, Eastern Europe and Latin America, with active exchanges in South Africa, Namibia and Kenya. Investors praise unique strategy Other investors involved in the deal said they were attracted to the potential of BitX’s focus on alternate markets in new areas. Julie Meyer, CEO of Ariadne Capital, commented that the investment reinforces Ariadne’s strategy of backing talented entrepreneurs and management teams building global companies that can disrupt at a large scale. Carol Realini added: “BitX has the right team and the right strategy to capitalize on the enormous opportunity for bitcoin in emerging markets. It is impressive how much they have already accomplished with multiple country implementations and a major partnership.” BitX also recently partnered with South African payment provider PayFast to provide the largest emerging market bitcoin merchant roll-out to date, enabling over 30,000 merchants the ability to accept bitcoin, including one of the largest e-commerce companies in Africa, Takealot. BitX plans to launch services in more markets soon. Image via BitX AfricaAsiaBarry SilbertBitXSingaporeSouth Africa
Original author: Jon Southurst

blockr-add2 Coinbase has acquired Blockr.io as part of an undisclosed deal. With the move, the San Francisco-based bitcoin financial services startup will add a popular block explorer service to its list of assets. Coinbase already offers merchant processing, secure vault storage and consumer wallet hosting, and extends its presence to yet another vertical with Blockr.io. In a blog post announcing the purchase, Coinbase cited Blockr.io’s sleek, intuitive user interface and API as the chief motivating factors, writing: “We’re always keeping an eye out for other companies and individuals making waves in digital currency and helping make bitcoin easy to use. One such company is Blockr.io” Coinbase adds to core team Blockr.io was created by a team of Slovenia-based bitcoin enthusiasts that included software developer Sašo Matojina and designer Samo Drole. Both will join Coinbase as a result of the acquisition. Matojina and Drole will focus their efforts on further developing the Coinbase API and Coinbase’s own bitcoin node, the company said. Coinbase added that Blockr.io will continue to operate “for now”, though there is no word yet on future development. Notably, Matojina has a background in automated functional and regression testing for banking software and developed a number of news platforms for Slovenian media. Drole previously worked as a freelance designer. This is the latest in a series of acquisitions and hirings completed by Coinbase. For example, in May it acquired the development team behind content sharing platform Kippt, while it bolstered its team with industry veterans from Amazon and Facebook earlier this year. Emphasizing ease of use Launched last December, Blockr.io conducted extensive beta testing of its platform prior to the sale. The service features integrated parsers for bitcoin and litecoin, and can be modified to parse any other coin running on a bitcoind fork. Blockr.io also supports automatic scripts using its own API. The service is designed to allow for ease of use, highlighting the block chain and its data through a clutter-free interface. Users can quickly access addresses, see balances and bookmark or share any information they may find useful with the service. Blockr.io even includes some fun features, such as a trivia section that lets users track accounts with the most coins or other outstanding characteristics. Merger image via Shutterstock acquisitionsBlockr.ioCoinbase
Original author: Nermin Hajdarbegovic

jason oxman, ETA Due to bitcoin’s perceived benefits as a more efficient and less costly alternative to traditional payment options, many in the digital currency industry view incumbent payment service providers as antiquated competitors – firms that will be disrupted out of business when the technology matures. Now, at least one notable payments industry trade association indicates that its members may be recognizing that bitcoin possesses this disruptive potential, and that this may soon lead to a rise in partnerships between traditional electronic payments providers and bitcoin startups. In an interview with CoinDesk, Electronic Transactions Association (ETA) CEO Jason Oxman talked at length about his organisation, how the digital currency can better execute its agenda in Washington and bitcoin’s potential appeal to the traditional payments industry. Notably, Oxman evoked Napster in his comments, comparing bitcoin to the controversial file sharing service that rocked the record industry. Citing it as a cautionary tale that is resonating with the payment industry, he said: “They went all the way to the Supreme Court to shut [Napster] down. That is traditionally how incumbents react to innovation.” Oxman, however, believes the payment industry will take a different approach to emerging technologies. In particular, he noted the recent partnership between Global Payments and BitPay as one that suggests the payment industry will not turn a blind eye to innovation. Under the terms, Global Payments has agreed to refer customers interested in bitcoin to BitPay’s service. He added: “I think our industry has the opposite story to tell, and I think that’s embodied [by] the BitPay, Global Payments deal.” Founded in 1990, the ETA represents more than 500 companies in the merchant-acquiring industry, fighting for its interests in Washington, DC. Notable members including Amazon, MasterCard and PayPal, along with BitPay – the ETA’s only bitcoin industry member. Embracing innovation equally Throughout the conversation, Oxman sought to frame his sector of the payments industry as one that is willing to work with emerging tech startups, including those in bitcoin space. He noted, however, that his support is likely to extend equally to providers of all forms of electronic transactions. Oxman suggested the ETA itself does not advocate for bitcoin over other new and novel means of transacting, nor does it have an official position on its advantages or disadvantages when compared to other offerings. “At bottom, our industry is in the business of facilitating electronic transactions, and those electronic transactions are going to take the form of whatever the customer or merchant of choice agrees is going to be the form of their electronic transaction,” he said. Oxman further argued that this inclusive viewpoint could be beneficial to the bitcoin industry. As the payments industry has been broadly considering innovations in mobile payments for some time, he suggested his members may now be more inclined to embrace bitcoin and its potential through strategic partnerships: “I think it will continue to happen going forward.” Facilitating connections To date, just one bitcoin company has joined the ETA, but according to Oxman, that doesn’t mean ETA members haven’t been given more exposure to bitcoin. The Bitcoin Foundation has played a central role in educating the ETA and its members about the benefits of bitcoin, he said. As an example, Oxman recalled a 2013 ETA event at which Bitcoin Foundation general counsel Patrick Murck spoke, lauding it as a strong sign that both bitcoin and the broader electronics transaction industry can find common ground. He explained: “[Murck] did a good job of putting a business-focused backing to bitcoin. With that kind of introduction, our members look to bitcoin as an interesting development in the industry, and at least one of our members has seen fit to strike a deal with a bitcoin processor.” Oxman went so far as to frame the ETA as a potential ally in the expansion of bitcoin’s use amongst consumers. Given the large number of merchants accepting electronic payments – between eight and nine million in the US alone –  he believes bitcoin could be expanded greatly through the reach of ETA members. “No company, no new startup in the bitcoin world has the infrastructure to reach all those merchants to make the pitches to why they should accept bitcoin,” he said. Promoting smart regulation Given his expertise as a liaison to Washington, Oxman also commented on New York’s proposed bitcoin regulations, drawing on his experience educating the 20-plus federal agencies that are involved with regulating payments about industry innovations. The ETA, Oxman noted, spends most of its time ensuring that governments don’t stifle innovations in the field of electronic transactions. In the past, this has meant his organisation has needed to pave the way for new and controversial payment options such as those offered by PayPal and prepaid card providers. Above all, Oxman stressed that he feels it is important for the bitcoin industry to tell its story to regulators, but that he understands the initial reaction of the government. Regulators simply aren’t used to payment methods that don’t offer certain forms of protections, he said. Oxman explained: “In the world of new payments technologies, any regulators are going to ask questions about the level of consumer protection available through alternative payment systems. The less those systems are established and deployed, the more regulators are going to feel compelled to step in and protect consumers where those protections are not otherwise available.” When asked for his opinion on the BitLicense proposals, Oxman also struck a balanced tone. He suggested that he sees both sides of the issue, but that he believes New York needs to conduct more research into bitcoin and its underlying technology. “I do think that it’s important to sound a cautionary note that regulators should not apply reflexive rules just because something is new. What they should do instead – hopefully New York will undertake this, but the early signs are cause for concern – they should take a real in-depth look at how bitcoin’s systems operates, how the block chain operates, how bitcoin providers like bitcoin processors take additional steps to protect consumers, to protect merchants.” “I’m not surprised to see that interested parties have asked for more time for comments to be filed in New York,” Oxman concluded. Image via The Paypers Electronic Transactions Associationpayments
Original author: Pete Rizzo

BTCTrip Travel agency BTCTrip has officially expanded its payment offerings to include litecoin and dogecoin. The online flight and hotel booking service was one of the first in its industry to serve the bitcoin community, launching in June 2013 as a cryptocurrency-focused alternative to sites such as Expedia and Travelocity. Speaking to CoinDesk, BTCTrip founder and CEO Martin Fernandez said that he is excited to add the popular altcoins to the company’s payment options because they allow BTCTrip to tap into growing communities in the developing digital currency industry. In particular, Fernandez cited the high levels of enthusiasm surrounding the dogecoin community as a key motivating factor behind the decision, saying: “I follow this community and I think they are very fresh. They are trying to do new things, so for us, it was very important to accept dogecoin. [...] For me, BTCTrip is a company, but it is also an experiment in cryptocurrency communities.” BTCTrip will continue to accept bitcoin through its long-time merchant processing partner BitPay, however, it will integrate processing services provided by GoCoin to facilitate its litecoin and dogecoin transactions. Diversifying demographics Throughout the interview, Fernandez stressed his desire to appeal to new digital currency users as the impetus for adding litecoin and dogecoin payments, suggesting he sees the altcoins as a smart, long-term business strategy. Still, he did indicate sales might have been a motivating factor, noting that his company’s bitcoin conversion levels taper off when bitcoin’s price is on the rise. Litecoin and dogecoin payments could provide some additional support during these times, as evidenced by the strong buying power reported by at least one major merchant serving both communities. While Fernandez talked most excitedly about the dogecoin community and its recent progress, he lauded litecoin as well, saying: “Litecoin was, for me, always the second coin in the market.” David vs Goliath Fernandez also addressed how the new payment methods will help BTCTrip better compete against other major travel sites serving the bitcoin space such as CheapAir and Expedia. CheapAir now accepts bitcoin for hotels, flights and Amtrak bookings, while Expedia added bitcoin as a payment option for hotel bookings in June. Although he evoked classic David vs Goliath imagery when referencing these companies, Fernandez said he feels his company’s emphasis on community will help it find success, saying: “I always repeat the same sentence, we are not accepting bitcoin [and dogecoin], we are accepting bitcoiners and dogecoiners. We are accepting the cryptocurrency community.” As a sign of its ability to compete against bigger rivals, Fernandez cited BTCTrip’s recent inclusion as part of PhoCusWright’s Travel Innovation Summit to be held this November. Notably, BTCTrip won a scholarship to attend and speak at the leading global travel industry conference, one that required it to “demonstrate the greatest potential for success”, among other qualifications. Tourists image via Shutterstock dogecoinlitecointravel
Original author: Pete Rizzo

bitlicense revisions
The 45-day window for public comments on the New York Department of Financial Services’ (NYDFS) recent BitLicense framework continues to shrink, but the barrage of reactions from industry professionals has yet to lose its momentum. Most recently, two research fellows from George Mason University’s Mercatus Center co-authored a 14-page response to the BitLicense proposal, highlighting some of its most critical shortcomings. Jerry Brito and Eli Dourado made a point to laud NYDFS Superintendent Ben Lawsky for his department’s “forward thinking” in outlining rules and regulations specific to virtual currencies, but criticized many of the stipulations found in the BitLicense proposal. Bitcoin’s “unique characteristics” Lawsky has stated that the fundamental goal for the BitLicense framework is to “strike an appropriate balance that helps protect consumers and root out illegal activity … without stifling beneficial innovation”. Brito and Dourado commend this goal in their proposal, but argue that the BitLicense framework as proposed fails to strike such a balance. Their response notes that through BitLicenses, the NYDFS aims to develop rules and regulations “tailored specifically for the unique characteristics of virtual currencies”. To this effect, BitLicenses mirror similar rules and regulations already in place for traditional money transmitting businesses, but Brito and Dourado say that the BitLicense regulations are often more strict than incumbent money transmitting licenses, defeating the purpose of accommodating to the “unique characteristics” of bitcoin and other virtual currencies. Brito and Dourado argue: “The obligations faced by BitLicensees should not be any more burdensome than those faced by traditional money transmitters. Otherwise, the new regulatory framework will have the opposite effect of the one intended [...] If it is more costly and difficult to acquire a BitLicense than a money transmission license, we should expect less innovation.” Before highlighting specific instances where the BitLicense framework is particularly onerous, the authors praise Lawsky’s acknowledgement that the rules of BitLicenses should not be “so burdensome or unwieldy that the technology can’t develop”. A need for more clarity Part of the problem with the BitLicense framework as proposed, the authors argue, is that some of the definitions included are so broad that non-financial services like Namecoin would be unnecessarily subject to regulation. They also highlight the distinction between a web wallet like Coinbase and a software wallet like Electrum; since a software wallet provider like Electrum never holds either the public or private key for its users’ bitcoin wallets, they should not be subject to the same regulations as a wallet provider like Coinbase. Citing the lack of clarity in the current BitLicense proposal, the paper suggests a revision to section 200.2(n)(2) to read: (2) securing, storing, holding, or maintaining full custody or control of Virtual Currency on behalf
of others; Brito and Dourado also point to further clarifications that are needed in regard to mining pools and operations, notably the ambiguous language classifying individual miners versus mining pool operations. Unnecessary stipulations A major problem with the BitLicense framework as proposed is the inclusion of regulations that puts BitLicensees at a disadvantage compared to traditional money transmitting licensees, the authors argue. Pointing to examples like the requirement for all employees to submit fingerprints to the NYDFS (for traditional money transmitting licenses, only the applicant must submit fingerprints) and the requirement to collect physical addresses of all parties involved in any transaction, Brito and Dourado criticize the BitLicense proposal as “impractical and counterproductive”. They note: “As one commentator put it, requiring that Virtual Currency businesses identify all parties to a transaction would be much like requiring Gmail or Yahoo! Mail to identify and gather the physical address of the recipients of the emails their customers send.” These stipulations neglect to consider the uniquely open nature of a decentralized currency like bitcoin, and as the authors mention, may very well result in stifling innovators who wish to explore the bitcoin market further. An on-ramp for startups Brito and Dourado continue to argue that many of the tedious and burdensome regulations that must be met by BitLicensees are more apt for traditional financial firms, not software-focused startup companies. The authors point to the requirement that changes to business must be approved by the superintendent as particularly troublesome, as constant iteration is essential for startups and business model pivots are not rare for young companies: “Indeed, it is unlikely that Silicon Valley would even exist today if entrepreneurs had to receive written approval from regulators every time they wanted to make a material change to their business model [...] The industry has thrived on permissionless innovation.” Brito and Dourado point out that traditional money transmitter licensees do not face the same requirements for changing their businesses, and that the NYDFS needs to take a more balanced approach in working with startups so that they “do not have the same compliance expenses that the world’s largest financial firms have on day one of their existence”. In conclusion, they explicilty commend Lawsky and the NYDFS for proactively approaching bitcoin regulation, but call for further revisions to be made to the BitLicense framework. The authors suggest an additional 45-day comment window to be instated for final comments to be made on the new draft of the BitLicense regulations, in hopes of finding the right balance between preventing money laundering and fostering innovation in New York state. Brito Dourado NY Virtual Currency Comment 081414 by CoinDesk Revisions image via Shutterstock Ben LawskyBitLicensefinancial regulationNew York
Original author: Tom Sharkey
  1. Russian Tech Magnate’s First Bitcoin Project Launches in Beta
  2. Price of Bitcoin Drops Below $400 in BTC-e Flash Crash
  3. CFPB Warning Ignores Bitcoin’s Consumer Protections
  4. Security Firm Claims New Leads in Search for Missing Mt Gox Bitcoin

Page 1527 of 1655