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judge, mt. gox
The ongoing legal battle over the future of Mt. Gox took a sudden turn on 29th April, when it was announced that Sunlot Holdings, the investor group seeking to buy what remains of the business, and lawyers representing the company’s global consumer creditors had struck a settlement deal.Under that proposal, former exchange users would support Sunlot’s bid to buy and relaunch Mt. Gox in exchange for a 16.5% equity stake in the new business and settle with key defendants including former Mt. Gox chief marketing officer Gonzague Gay-Bouchery and original site creator and equity stakeholder Jed McCaleb.But, while potentially promising for frustrated former exchange users, the plan is not guaranteed.As Jay Edelson, managing partner of the Colorado-based law firm heading the US class action suit, explained to CoinDesk, tomorrow’s 1st May hearing will provide the first chance for the supervising judge to decide if the proposal moves forward.Edelson said:“The judge will consider a number of options. The judge can accept the proposal, reject the settlement or take more time.”Still, Edelson is confident in the plan put forth by the international legal representation working on behalf of Mt. Gox’s consumer creditors, and hopes it will be well-received due the benefits it could provide to former exchange users, some of whom have lost thousands or even millions in BTC as a result of the exchange’s collapse.Edelson said:“We think that the overall plan gives consumers and creditors the best chance of being made whole or even more than whole if things go well.”Striking the dealSpeaking to CoinDesk, Edelson elaborated on the settlement, saying that it was effectively kick-started by the sudden 16th April decision by the Japanese courts to change the status of Mt. Gox’s bankruptcy from a restructuring to a liquidation.As a result, Edelson said the timing of key efforts needed to be accelerated.Edelson went on to describe how the combined legal representation of Mt. Gox’s international consumer creditors and Sunlot worked day and night mediating the deal with a retired federal judge, in what he called a “larger process” than what has been portrayed in the media.Continuing action against KarpelesWhile the settlement would end the case against certain defendants, other prosecutions will move forward.For example, Edelson said that lawyers representing international creditors will be continuing actions against CEO Mark Karpeles, Mt. Gox’s parent company Tibanne, Japan-based megabank Mizudo and other as-yet-unnamed defendants.Edelson suggested that the settlement could also improve the position of class members against these entities, stating:“As part of the deal, Gay-Bouchery and McCaleb and Sunlot have agreed to cooperate in the prosecution. I’m sure you can imagine that having Gay-Bouchery agree to tell us all he knows is incredibly helpful.”Edelson also reiterated that the consumer creditors he represents will still be pursuing the funds allegedly lost by the exchange in the run-up to its insolvency.Edelson told CoinDesk that he believes that other entities may be holding assets that belong to members of the class he represents, and that efforts are being made to determine the validity of this assertion.He said:“We are pursuing that through the class action and Sunlot. If they are approved to take over the company, they also have an independent obligation to pursue that, so we’ll be able to go after the money in two different ways.”Rights of former users remainEdelson also made clear that former exchange users who have previously not exercised their rights through any of the associated class actions are still free to do so. For instance, he noted that an international creditors committee is being formed in an attempt to contact as many affected parties as possible.US and Canada classes are still accepting former users who may wish to join, Edelson said, while existing class members will have the ability to opt out as they wish as more individual cases in the ongoing prosecution emerge.Judge via ShutterstocklawMt. GoxSunlotUSA
Original author: Pete Rizzo

california, regulation
The California Department of Business Oversight (DBO) and the New Mexico Taxation and Revenue Department (TRD) have both issued new releases warning consumers in those states about the potential downsides of investing in digital currency.The California DBO oversees a number of financial service and product providers in California, including banks and credit unions, money transmitters, investment planners and independent escrow agents, among other entities, while the New Mexico’s TRD is responsible for collecting governmental revenue.Overall, the releases take a broad look at digital currencies, with a particular focus on the risks associated with exchanging, investing in and otherwise holding monetary value in such assets.In an interview with CoinDesk, Mark Leyes, director of communications at the California DBO, spoke about how his organisation’s release is part of its ongoing study of digital currencies.Leyes said:“We’re still deliberating on the approach we’re going to be taking for digital currency, and in particular, digital currency exchanges and how those fit into state money transmitter regulations. In the meantime, we wanted to provide some information to consumers and investors who have expressed interest in the topic.”Leyes indicated that the DBO is exploring how different digital currency businesses can secure licensing under state laws and the current regulations that may be applicable in these instances.According to a report by the New Mexico Telegram, the New Mexico TRD is also looking into digital currency as part of ongoing fact-finding.Alan Wilson, Director of the New Mexico Securities Division, told the media outlet.“We are studying how virtual currency is used to pay for products or services and how consumers are invited to invest in virtual currency as a commodity.”More detailsLeyes indicated that this latest release was spurred in part by recent events.For example, he noted that the Conference of State Banking Supervisors (CSBS) and the North American Securities Administrators Association (NASAA) recently released a model advisory and that this influenced the timing of his own organisation’s release, and he expects more states to follow suit.The DBO’s full document touches on topics such as the bankruptcy of Japan-based bitcoin exchange Mt. Gox, the volatility of digital currencies, the irreversibility of digital currency transactions and how digital currencies are not regulated by the US government, leaving consumers little recourse should they be the victim of fraud or theft.New Mexico’s reportedly echoed many of the same topics, talking about the recent fluctuations in the price of bitcoin, the ongoing crackdown against bitcoin-friendly financial providers in China and the threats users face from criminals who take advantage of digital currency services.Read the TDR’s release:“Investors must rely upon the strength of their own computer security systems, and third parties security systems, to protect their e-Wallets from theft.”Ongoing researchLeyes indicated that the DBO is currently speaking with local members of the bitcoin community as it seeks to refine its understanding of the subject.Leyes said:“Several players have approached us in terms of licensing and they’ve been working with us on what their business models are.”Though he wouldn’t say how long the department has been studying digital currencies, Leyes said it has been “considering the issue for quite a while”. Further, his comments suggest more regulatory guidance could be forthcoming.New Mexico’s TDR could not be reached for comment as of press time, though the Telegram’s report indicated that it is “evaluating the developing market for bitcoin and other forms of virtual currency”.Roles in the bitcoin economyThe guidance from California is particularly noteworthy given that San Francisco and Silicon Valley have become fertile areas for the development of bitcoin startups.Notable San Francisco-based bitcoin startups include Coinbase, Kraken and Ripple, among others.New Mexico’s unique laws have also aided bitcoin’s US expansion. For example, the state does not require its businesses to obtain money transmission licenses, which proved integral in the launch of what was widely regarded as the first bitcoin ATM in the US.For more on how both state’s are contributing to the burgeoning bitcoin economy, read our latest report on the ongoing bitcoin job boom in the US, featuring a breakdown of current employment in key states.California capitol building via ShutterstockCaliforniaUSA
Original author: Pete Rizzo

687474703a2f2f692e696d6775722e636f6d2f68596c694534352e706e67
The decentralised ‘successor to Silk Road’, DarkMarket, has been copied and given a new, more palatable name, OpenBazaar.A proof of concept developed at the recent Toronto Bitcoin Expo hackathon, DarkMarket uses the bitcoin protocol to create a marketplace that is impossible for any government to shut down.Now the open-source code for DarkMarket has been forked – a coding term that means ‘to create a separate branch’ – by developer Brian Hoffman, who says he wants to build an alternative market “without the ‘Dark’ stigma”.“I felt the [DarkMarket] project had merit, but we need to sidestep the stupid name issue if we were going to make progress,” Hoffman told CoinDesk via email.He says his aim isn’t to build a platform for people to buy drugs or other illegal goods:“The goal is not to make it simple to find drugs or guns. Period. I am not spending my time contributing to something to help others buy drugs, I’m trying to help sellers save money on transaction and payment processing costs, and open up new customer bases. There’s a lot more here than drug or gun sales.”However, like the DarkMarket team, he notes:“We won’t control, or be able to control, who sells what on the network.”Decentralized storesThe idea behind DarkMarket is to create a decentralised trading platform run by each of its participants, instead of one run by a central authority, which can control trades (and be held accountable for them).“Orders placed on [OpenBazaar] would be encrypted and transmitted to peers directly. If the Feds came knocking on our door to provide something, there’s nothing to provide,” says Hoffman.Hoffman, who works as a consultant to the US Department of Defense and Veterans Affairs on health programmes, specifically on an encrypted, secure, health-messaging system called the Direct Project, says he doesn’t have an official launch date for OpenBazaar yet, saying:“There are some obvious holes [in the DarkMarket code] and it’s nowhere near production-ready right now.”Words of powerFollowing the creation of DarkMarket, some in the bitcoin community called on the DarkMarket team, which includes anarchist bitcoin developer Amir Taaki, to change the name:“By calling this important invention the DarkMarket I’m afraid Amir et al are playing into the system’s hands,” wrote one redditor who created a petition to alter the branding.Taaki rejected the calls, writing:“People need to stop being afraid and reclaim these words of power used to control us [...] Our team is not here to fit in nicely with the status quo – we are here to challenge it.”He also added: “If you’re bothered enough, then create the change you want to see.”With the advent of OpenBazaar, it seems his words were heeded.DarkMarketmarketplacesOpenBazaar
Original author: Kadhim Shubber

digitalcoin
UK retailers are exploring alternative payment options and moving away from traditional cash payments due to relatively high costs, according to a new survey compiled by payments provider Sage Pay.The company’s research reveals that UK retailers now spend a whopping £17.8bn (almost $30bn) a year just to process cash payments. As a result, they are looking at cheaper alternatives, but it seems most of them are staying away from bitcoin.This general trend is not new. The British Retail Consortium (BRC) has been keeping track of retail transactions for years and the volume of cash transactions has been going down.Cash is still the most popular payment method and it accounts for one out of every two retail transactions carried out in the UK. However, in 2012 the use of cash in retail fell 10% and the drop is currently accelerating.Costly cashAccording to the survey, the average British retailer spends £3,638.57 handling cash payments every year.That figure includes security, lost or stolen cash, and costs incurred due to counterfeits. More than half of all retailers surveyed by Sage Pay said that cash is the most troublesome payment method in terms of accounting issues.It’s not just businesses, however; consumers prefer alternative payment methods too, hence retailers are trying to adjust and offer more choice.The survey found that 36% of consumers are more likely to spend their money in a shop that offers more payment methods, while 31% of consumers are willing to take their business elsewhere if their preferred payment method is not supported.Sage Pay Chief Executive Simon Black believes the industry is going through a payments revolution and the findings back up his claims, as more than a third of consumers and businesses believe Britain is becoming a cashless society, the Telegraph reports.Changing landscapeBlack points out the retail landscape is changing, with an emphasis on omnichannel operations and a seamless consumer experience whether online, in physical stores or on mobile devices. Although the new model necessitates the use of digital wallets, prepaid cards and similar technologies, Black does not see much room for cryptocurrencies.Cryptocurrencies were dismissed as a fad by 61% of businesses surveyed by Sage Pay. Two thirds of consumers awarded it the lowest possible mark as a payment method and just 1% of consumers admitted to using bitcoin in the past month.To put the figures in context, a recent survey carried out by communications agency Clarity found that 57% of online shoppers in Britain are familiar with bitcoin. One in five said they experimented with it, but only one in five said they would consider using it in the future.Black argues that many businesses are using bitcoin as nothing more than a PR gimmick:“Too many businesses are focusing on bitcoin when they should give customers the options they really want, like credit, debit, and contactless payments, or Paypal online. The majority of Brits happily manage with one currency: sterling.”On a more positive note for the digital currency, the survey also revealed that 29% of surveyed merchants view bitcoin as an important technology that could have an impact on future payments systems.retailsurveyUK
Original author: Nermin Hajdarbegovic

btc
The bitcoin ‘China Syndrome’ fills the news these days with attempts by Chinese authorities to steer bitcoin legitimacy. This gives us an excellent opportunity to contemplate and reiterate the core attributes of bitcoin’s overall strength.Bitcoin shows that national fiat money systems are an artificial construct. The debates around regulation are really restrictions on getting into or out of the US dollar rather than getting into or out of bitcoin. Dollar and other national currency endpoints will always be regulated.Aside from the fact that bitcoin survives and outlasts political institutions just like the Internet does, its greatest strength lies in the fact that it does not require government or other third parties to sanction its legitimacy. Bitcoin’s legitimacy derives from its market adoption and continued usage among its participants.The exchanges, or on-ramps to the legacy financial world, are just convenient enablers and it makes sense for some threatened political institutions to clamp down on the facilitating enablers. Incidentally, it also reveals to the world which nations feel the most threatened by the existence of an incorruptible, non-political monetary unit.Far more important to bitcoin’s future are the robust mining communities and the decentralized global nodes. Ultimately, any new bitcoin regulation yields market-based reactions to that jurisdiction’s regulation. Outright bans simply do not work. Price discovery still finds a way.Of course, people in certain countries get annoyed when they cannot use an exchange to acquire or sell bitcoin and instead must go to excellent sites like LocalBitcoins to arrange a transaction. It can make you feel like you’re engaging in something seedy, but that is the intent of the regulators and the Fourth Estate. They drive it underground to dampen or slow adoption.The way forwardWe can do something. There is a solution. First, don’t worry every day about the USD or EUR price of bitcoin. Manage the risk via currency diversification.Secondly, don’t fall victim to believing that nation-states can bestow legitimacy on a monetary unit. The most that governments can do is demand a favoured monetary unit in payment for taxes and other payments to the authorities, thus declaring a legal tender. A declaration such as that has little to no effect on person-to-person digital exchanges.Also, reject the premise that bitcoin must be mainstream in order to be massively successful. Of course, it wouldn’t hurt for bitcoin to go mainstream, but not at the risk of diluting some of its core attributes.Bitcoin needs to be successful on its own terms unlike PayPal, which capitulated from its original mission to then become a watered-down version of itself, enabling the same third-party choke points and legacy financial roadblocks that it originally set out to challenge.Lastly, while research articles may tout a seductive future where ‘Bitcoin’s Promise Goes Far Beyond Payments‘, it is unlikely that a future of block chain-like applications will dispense with the original building blocks of bitcoin.Bitcoin stands to winDistributed trust networks are built upon gradually expanding computational strength provided by the network’s increasing hash rates. The incentive for continued mining is directly related to the value of the network-embedded monetary unit which is the bitcoin unit.Side chains that exploit bitcoin’s early mover advantage are more likely to be the future of block-chain applications than government-managed trust networks that centralize and malign the incentives.Therefore, bitcoin wins more broadly even though payments may only represent the first application of block-chain technology. The bitcoin monetary unit is the inseparable part of the world’s largest and computationally strongest distributed computing network.Like languages, value standards trend towards commonality, which is why we will never see over 300 independent altcoin valuation standards succeed.A standard for measuring value is similar to a standard for measuring volume, length, or temperature. The world may accommodate a few competing standards (like Fahrenheit and Celsius), but the market will reject an abundance of counterproductive competing standards.Issues that broad adoption solvesAs bitcoin is a global unit, we must talk about adoption on a global scale. It is insufficient to talk only of bitcoin adoption within a single country because its global nature breaks down borders for more robust international trade and transactions.Unlike boundary-specific monetary units, bitcoin facilitates exchanges between different jurisdictions, thus weakening the advantage of the providers of the regional monetary unit. Bitcoin does not recognize the relevancy of jurisdictional borders and sees them as damage that it needs to route around.“"New bitcoin is being transacted and used in some manner generally within 24 hours"”Many positive things begin to happen with broad bitcoin adoption. For instance, the need for online local fiat exchanges begins to diminish because people on the receiving end of bitcoin are also able to spend bitcoin. A closed loop is created.Also, the focus of bitcoin-related businesses shifts to usage rather than concerns around regulation, because if people are not exchanging bitcoin with fiat there become fewer regulatory endpoints to the legacy financial system.All that remains are people trading digital scarcity ‘tokens’ for goods and services via their personal electronic wallets. Economic growth is centred around the participants of that new economy which reinforces market-based legitimacy for bitcoin.Strategies for increasing adoptionHow can we increase bitcoin adoption? This is the famous chicken-and-egg question. Do consumers lead the way for merchants to provide bitcoin payment choices, or do merchants provide fabulous bitcoin offerings that drive consumers to enthusiastically acquire their first bitcoins?Both can be correct and there is no right or wrong answer. Aggregate consumer purchasing power could indeed influence merchant payment choices, while the fabled ‘killer app‘ for bitcoin will probably be merchant-driven.Local groups and bitcoin nonprofits around the world could start holding contests with awards for the merchants that have the greatest bitcoin sales in a given period. ‘Bitcoin Accepted Here’ decals could be distributed in the same way that other payment decals are distributed. Large and influential merchants could debut shippable products to parts of the world that have no ability to purchase goods in the global economy without a bank card.The existing bitcoin merchant processors like BitPay, BIPS, and Coinbase play a significant role in increasing adoption, especially since they provide streamlined apps and plugins for existing e-commerce software packages.This will continue to be a high growth area as both physical and virtual merchants seek to plug into the rapidly growing bitcoin economy.Consolidated consumer pressure promising large Groupon-like sales volume could also be directed at favoured merchants, thereby adding new bitcoin merchants to the ecosystem. This also creates a reason for consumers to acquire bitcoin. Source: MIT Technology ReviewAs the chart above demonstrates, we are already witnessing greater bitcoin payments turnover than we were in the early years. This is encouraging because it means that new bitcoin is being transacted and used in some manner generally within 24 hours.Furthermore, all of this has happened without an official government pronouncement or declaration of a legal tender. The future belongs to bitcoin.Follow the author on Twitter.Chinaconsumer adoptionpeople's bank of china
Original author: Jon Matonis

Bitcoin jobs
Bitcoin reached a small but significant milestone this week. It has nothing to do with the price, there isn’t a new update to the protocol, and a bitcoin startup didn’t break the record for venture capital funding.Notably, reddit’s r/Jobs4Bitcoin subreddit reached 5,000 subscribers. Hardly earth-shattering news, but this modest achievement is an indicator of a broadening pool of jobs that not only pay in bitcoin, but are within the bitcoin industry itself.Most of these jobs, according to statistics derived from LinkedIn, are in the US. Despite the hype about regulation in the US killing bitcoin innovation, America is indisputably the preeminent breeding ground for tech entrepreneurship, and that applies as much to digital currencies as it does to any other technology sector.A Google search of LinkedIn profiles associated with bitcoin, which is arguably a close approximation to the number of professionals active in the bitcoin sector, returns 7,560 results.Taking a sample of around 500 shows that around 50% of those professionals are in the US. The UK and Canada are a distant 2nd and 3rd at 9% and 8% respectively. It is worth noting that this method of measuring bitcoin jobs is obviously skewed to users of LinkedIn and will exclude places that use non-Latin alphabets, such as China.Within the US itself, California – or, more specifically, Silicon Valley – would be the obvious location of the majority of these bitcoin professionals. And the data bears that out: 40% of those bitcoin professionals from LinkedIn are in California. New York is in second place and Texas is in third.Bitcoin jobs in AmericaBut as well as the people who work full-time on bitcoin or bitcoin-related businesses, bitcoin is now being used as a payment option for casual work contracted out to strangers online. As bitcoin is still a fairly niche currency in terms of the types of people who use it, this work tends to be programming.One site that exclusively lists jobs that pay in digital currency is Coinality. Since its launch last year, almost 1,000 jobs have been listed there.Judging by the 200+ jobs currently listed on Coinality, around half are freelance positions but sizeable proportion (29%) are full-time jobs.Bitcoin job listingsThe general trend of the increasing number of jobs that pay in bitcoin can be seen in the above graph from indeed.com. The volume is still minuscule when compared to the whole, but it is increasing quickly.‘Hire me’ image via ShutterstockCoinalityjobs
Original author: Kadhim Shubber

Bloomberg Bitcoin Ticker
Bloomberg has started providing bitcoin pricing to more than 320,000 subscribers via its Bloomberg Professional service.The service will allow users to monitor and chart data from Coinbase and Kraken. It will also track digital currency news and relevant social media posts from more than 100,000 sources.All users need to do to access the new service is type VCCY<GO> on the Bloomberg Professional service.Bloomberg was rumoured to be working on a bitcoin price ticker last August. At the time an inside source told BTCGeek that Bloomberg employees could access the new feature on their Bloomberg terminal and look up bitcoin pricing.Mixed reactionsThe Wall Street Journal described Bloomberg’s decision to start providing bitcoin pricing as a “key stamp of approval” and the move will surely be welcomed by many in the bitcoin community. However, Bloomberg has pointed out that opinions on bitcoin are mixed:“Everyone from Warren Buffett and Marc Andreessen to the Winklevoss twins and the Internal Revenue Service has opined on the viability of the digital currency. Depending on your vantage point, bitcoin may be the biggest technology innovation since the Internet or a fad whose crash will be as precipitous as its meteoric rise.”Although bitcoin has some notable detractors in the financial community, Bloomberg argued that it is simply impossible to ignore the digital currency due to high-levels of interest, adding:“It’s worth noting that we are not endorsing or guaranteeing bitcoin, and investors cannot trade bitcoin or other digital currencies on Bloomberg.”Fostering innovationBloomberg said its decision to start providing information about a controversial market like bitcoin was prompted by several reasons. The company believes it can offer better transparency and it can help foster innovation.“While bitcoin and other virtual currency markets are still nascent, they represent an interesting intersection of finance and technology. Given that Bloomberg sits squarely at that intersection, providing pricing for this underdeveloped market is a natural fit for us,” Bloomberg pointed out.Lastly, Bloomberg said it is merely responding to client demand. Bloomberg clients are increasingly interested in bitcoin and other digital currencies, so they need tools to better monitor developments in these emerging markets.Bloomberg included a number of caveats in its announcement, saying that interest in global currencies is going up, but they still represent just a fraction of global fiat currency usage. The company also pointed out that reaction from governments has been mixed and the regulatory environment remains unclear.“While bitcoin has thus far survived intense media scrutiny, scandal and wild price swings, there certainly is no guarantee that bitcoin will persevere,” the company concluded.bloombergprices
Original author: Nermin Hajdarbegovic

The Reserve Bank of Australia (RBA) has issued a briefing document in which it calls bitcoin a “limited” risk to the country’s payment systems. The document was published some time ago, but was only recently made public.The briefing (which can be read at the bottom of this article) describes bitcoin’s method of confirming transactions as “an inefficient use of resources” and says that the digital currency faces an uphill battle in dislodging the current payments infrastructure:“The appeal of low fees and fast transaction times are not themselves sufficient for the wide adoption of bitcoin as a payment system.”Prepared for the bank’s Payments System Board in May 2013, the briefing document was recently acquired through a Freedom of Information request and posted on Reddit.Primarily an informational document, the briefing notes a number of risks posed by the potential widespread adoption of bitcoin to the RBA, including a “reduced ability to implement monetary policy”, a fall in revenue from the minting of money, and a potential to destabilise the financial system if there was a rush to sell bitcoins “because of a loss of confidence in the core bitcoin system or large third-party service providers.”The document argues that a significant amount of computing power is wasted in the winner-takes-all race to mine blocks, and points out that the first-mover advantage, which makes it difficult for bitcoin to replace existing payment systems, also makes it likely that it will remain the pre-eminent digital currency.If nothing else, the slightly out-of-date document, which includes references to Mt. Gox’s trading volumes, for example, shows a remarkably strong understanding of the ins and outs of digital currencies.Government regulation around bitcoin, the document suggests, is born not from ignorance, but perhaps because they understand the implications all too well.Reserve Bank of Australia Bitcoin Briefing by CoinDeskReserve Bank of Australia image by Newtown GraffitiAustraliapaymentsregulationReserve Bank of Australia
Original author: Kadhim Shubber
  1. Lobbyists Put Bitcoin on the Agenda in Washington DC
  2. Blockchain Seeks Community Assistance for Product Testing
  3. FinCEN: Digital Currency Cloud Mining, Escrow Services Aren’t Money Transmitters
  4. Shrem Pleads Not Guilty to Money Laundering Charges

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