China news.....
BTC38 Suspends Trading, Cites China Central Bank Guidance
Published on April 2, 2014 at 16:41 BST | Exchanges, News, Regulation, US & Canada
China-based bitcoin exchange BTC38 announced to its users that its services will be suspended following a shift in policy from the People’s Bank of China (PBOC), the nation’s central bank.
The posting seemingly confirms earlier reports that the PBOC would seek to tighten its enforcement of earlier guidance issued in December, thereby blocking its domestic banks from working with digital currency companies.
Further, the release corroborates recent statements by BTC China CEO Bobby Lee, who has suggested that the PBOC has been seeking to implement a “stricter interpretation” of its past ruling.
Informal translations of the notice suggest that BTC38 has confirmed that the rumors are true, as it stated that it received the news from banks and third-party payment providers.
Read the statement:
The comments suggest that trading between digital currencies will continue via BTC38, but that no fiat-to-digital currency conversions will be allowed on the platform.
Past research on BTC38 indicates that the exchange has been active since October, and that the majority of its traffic comes from China, though it does support some US users.
No further details
Following this statement, BTC38 stated that its assets have not been affected by the announcement and that it still has more than 100% of user reserves in an effort to downplay potential concerns about its finances.
Still, the exchange was not able to offer more details. The company stressed in its posting that it did not have any further comment at this time, and did not indicate when further updates would be available.
Read the statement: “We are temporarily unable to reveal more.”
Call for support
The exchange ended its post with a call for the industry to come together amid the uncertainty that has caused the price of bitcoin to deflate in recent weeks.
BTC38 referred to the state of confusion, noting that it has “hurt the industry”, and called on everyone with a stake in the ecosystem to “resist chaos”.
Furthermore, it suggested that it would look to continue to emphasize customer support and focus on the development of the digital currency industry.
CoinDesk is monitoring this developing story, and will post updates as more information becomes available.
BTC38 Suspends Trading, Cites China Central Bank Guidance
Published on April 2, 2014 at 16:41 BST | Exchanges, News, Regulation, US & Canada
China-based bitcoin exchange BTC38 announced to its users that its services will be suspended following a shift in policy from the People’s Bank of China (PBOC), the nation’s central bank.
The posting seemingly confirms earlier reports that the PBOC would seek to tighten its enforcement of earlier guidance issued in December, thereby blocking its domestic banks from working with digital currency companies.
Further, the release corroborates recent statements by BTC China CEO Bobby Lee, who has suggested that the PBOC has been seeking to implement a “stricter interpretation” of its past ruling.
Informal translations of the notice suggest that BTC38 has confirmed that the rumors are true, as it stated that it received the news from banks and third-party payment providers.
Read the statement:
The comments suggest that trading between digital currencies will continue via BTC38, but that no fiat-to-digital currency conversions will be allowed on the platform.
Past research on BTC38 indicates that the exchange has been active since October, and that the majority of its traffic comes from China, though it does support some US users.
No further details
Following this statement, BTC38 stated that its assets have not been affected by the announcement and that it still has more than 100% of user reserves in an effort to downplay potential concerns about its finances.
Still, the exchange was not able to offer more details. The company stressed in its posting that it did not have any further comment at this time, and did not indicate when further updates would be available.
Read the statement: “We are temporarily unable to reveal more.”
Call for support
The exchange ended its post with a call for the industry to come together amid the uncertainty that has caused the price of bitcoin to deflate in recent weeks.
BTC38 referred to the state of confusion, noting that it has “hurt the industry”, and called on everyone with a stake in the ecosystem to “resist chaos”.
Furthermore, it suggested that it would look to continue to emphasize customer support and focus on the development of the digital currency industry.
CoinDesk is monitoring this developing story, and will post updates as more information becomes available.
and.....
Chinese Bitcoin Exchanges
OKCoin, FXBTC Report New
Deposit Freezes
Following on the heels of the news that China-based bitcoin exchange BTC38 would suspend fiat-to-digital currency trading, rival China-based exchanges OKCoin and FXBTC have received official notices from financial partners notifying them that certain accounts will be terminated.
The new announcements are the latest indication that China’s central bank, the People’s Bank of China (PBOC), may be following through on its decision to more actively enforce prior rulings related to how domestic financial service providers can interact with the bitcoin exchanges.
For example, while OKCoin was contacted by its third-party processor, FXBTC has been contacted by commercial banking providers.
China previously banned third-party payment services from dealing with bitcoin exchanges this past December. However, its domestic bitcoin exchanges had found a workaround for this issue by accepting payment into corporate accounts.
A new report from The Financial Times has suggested that the PBOC is now looking to close this loophole.
Notifications received
OKCoin revealed via its website that it had been contacted by one of its third-party payment processors, and that as a result, it will stop servicing deposits via prepaid card. Debit cards and yuan withdrawals, however, are not affected.
FXBTC’s situation at press time was perhaps more dire. It posted an emergency notification on its website that noted that it has received word from commercial banking partners who are looking to terminate certain accounts.
FXBTC indicated that it would stop debit card deposits as of 3rd April, and temporarily halt withdrawals after Sunday, 6th April. As of press time, however, it said its third-party processing channel – operated by Tencent’s TenPay – was still active.
Huobi reported that it had not received official notification that any of its accounts were affected.
Still no official notice
Together with the day’s earlier announcement from BTC38, the reports suggest that the PBOC may be pressuring the country’s commercial banks and payment companies to close bitcoin trading accounts.
Earlier reports had suggested that all accounts would need to be shut down by 15th April. However, the PBOC has yet to make an official announcement regarding any changes in policy.
This official notice may be unlikely, however, as BTC China CEO Bobby Lee has indicated that the PBOC is simply following a “stricter interpretation of the written rules” regarding bitcoin and digital currencies.
Community reaction and prices implications
Reaction to the news on reddit was still skeptical, with many indicating that the announcements don’t actually confirm that the PBOC will be looking to enforce the broad crackdown that has been suggested.
As of press time, the price of bitcoin on the CoinDesk USD Bitcoin Price Index(BPI) was down 8.41% on the news, having fallen $40 from the day’s opening total of $478.
Prices in China were affected similarly, according to the CoinDesk CNY BPI, which at press time was down 7.25% from the day’s open of ¥2,861 at ¥2,653.74.
Additional reporting provided by Rui Ma.
Neeo and Bee updates.......
http://www.cryptocoinsnews.com/news/breaking-bitcoin-enterprise-neo-bee-insolvent/2014/04/02
Breaking: Bitcoin enterprise Neo & Bee insolvent?
Neo & Bee CEO Danny Brewster broke a long silence today. He claimed Bitcoin enterprise Neo & Bee is insolvent.
A few days ago, trading of LMB Holdings Bitcoin shares on Havelock Investments exchange had been suspended. Reason for this was “an increase of abnormal activity”. LMB Holdings is the parent company of Neo & Bee, a Bitcoin company that tries to offer Bitcoin users a bank-like experience. Just a little while ago, it opened a flagship store in Cyprus. Rumours kept spreading about this news. Neo & Bee’s Bitcointalk forum thread was flooded with worried people. All that time, Neo & Bee’s spokesperson remained silent, until today.
Insolvency and threats
It seems Neo & Bee are insolvent. Danny Brewster, aka Cryptocyprus at the Bitcointalk forums,replied in the official Neo& Bee thread today. He explained his reasons for the long silence (which was what caused people to worry in the first place) and gave insight into Neo & Bee’s situation. After coming clean, he locked the post.
The start of his post was dedicated to reassuring people he did not leave Cyprus for good. Nothing was shipped and Bitcoins are still where they need to be. Brewster claims his reason for leaving were threats. He says he and, more importantly, his daughter received direct threats. Authorities were informed, but he felt safer leaving Cyprus.
“My recent silence has been forced due to the actions of two people, one of which has been posting on here thinking they know me and have the inside knowledge about my life that is largely false, and they really should obtain some better sources, however, those posts had much wider ramifications than they probably assumed they would have, so I hold them partially responsible for what has occurred since their posts.
I left Cyprus on a short term temporary basis for reasons that will follow, I have not shipped anything from Cyprus and I certainly have not run away with company or peoples money or bitcoins. Following those posts on the forum, I received direct threats targeted directly at my daughter; they have been reported to the relevant authorities, Once those threats were made I took the advice to remain outside of Cyprus and remove contact with anyone that could be responsible for the threats, this included not speaking with members of staff that could be responsible.”
Threats are never a fine way to resolve issues like these, but neither is complete silence. The past months have proven that an open communication with customers yields respect and gives you more time to get things done. Silence is usually a very bad sign and this is proven by what follows in his statement. Threats weren’t the only reason for leaving Cyprus.
“My reason for leaving was to raise additional capital for the business through the sale of my equity as we had run out of liquidity, I had exhausted all of my own liquidity too through directors loans to the company. Every single Bitcoin raised and spent is accounted for, any claims of embezzlement are nothing but empty claims with no foundation.”
It seems the Bitcoin community was right to fear the worst. Neo&Bee ran out of liquidity and Brewster left for the United Kingdom in order to gather funds. Even though he states “every Bitcoin raised and spent is accounted for”, this still leaves many questions unanswered. How could a promising company turn from hero to zero in such little time? A brief explanation was given, saying coins were lost in certain projects, as well as people still owing money to the company.
“There were coins lost in BitFunder/WeExchange that I personally covered and assumed that debt of 1420BTC to ensure the company could continue unaffectedly, UKYO also owes me an additional 260BTC separately from the 1420BTC. I also have 369.8BTC of my own Bitcoin stuck with MtGox that would have been given to the company to settle all creditors and continue operations whilst more capital was raised. Having funds on MtGox was a personal risk that I assumed and no company funds were ever held on there.”
New Mt. Gox?
A new Mt. Gox in the making? What happened cannot be changed anymore, unfortunately. So the interesting part of it all is the solution. How does Neo & Bee expect to become healthy again? At first, Brewster wanted to sell some of his own equities in order to raise more capital. The threats toward his daughter seem to have scared him, seeing he plans on selling all his shares now. When the sale is complete, the new owner will be able to appoint a new CEO. A special agency was hired to handle all of this the best way possible.
“My original plan was to raise more capital to allow the company to achieve its potential through the sale of some of my equity. The moment threats were made towards my daughter this plan changed and I decided I would sell all of my equity, allowing the new owner to appoint a new CEO.
The whole process will be completed and handled through an agency that specializes in these matters, once the final details are completed, the agency details will be made available to interested parties who wish to purchase 100% of my equity in LMB Subsidiaries Ltd thus taking full control of all subsidiaries. I shall also be providing the new owner full rights over the Bitcoin debts currently owed by BitFunder/WeExchange as I know people are working on a solution to recovering those debts for everyone that has funds stuck there. This process will also write off all directors loans I have made to the company and I shall not receive any financial compensation through this sale process.”
Another promising Bitcoin company seems to bite the dust. For all we know, these are growing pains for a new technology that is still trying to find its place in this world. However, Bitcoin hadits fair share of setbacks now, this has got to stop soon. People’s faith in cryptocurrencies is low at the moment and this can only harm that trust even more.
The Neo & Bee story is still ongoing, CCN will provide further updates as more details become available.
Danny Brewster photo by kathimerini.com.cy
and more on same....
and more on same....
Neo & Bee CEO Moves to Reassure Investors Following Insolvency Confusion
Earlier this week trading of LMB Holdings bitcoin shares were halted, after an apparent request filed by the company. LMB Holdings is the parent company of Neo & Bee, an innovative bitcoin firm which recently set up shop in Cyprus. The stocks were traded on the Havelock Investments exchange.
In a statement posted on Havelock Investments on Monday, the exchange said it was formally informed by Neo & Bee that there “may be a high possibility of questionable trading activity”. Therefore Havelock Investment halted trading, awaiting further instructions from Neo & Bee.
The unusual move caused a fair amount of concern, which is hardly surprising in light of recent developments, namely the failure of Mt. Gox.
The plot thickens
Neo & Bee did not issue a public statement explaining the decision to halt trading, nor did Havelock Investment offer any further details. Neo & Bee CEO Danny Brewster was not in Cyprus at the time and this fact created a lot of buzz on various public forums, as people started to question Neo & Bee’s liquidity.
Brewster confirmed that he is not in Cyprus, but he stressed that he is away on business and that he is working to resolve “big issues” which were only compounded by people spreading allegations online.
On Wednesday morning Brewster posted a lengthy explanation of his predicament on The Bitcoin Talk forum. He confirmed that he was not in Cyprus and stressed that he left temporarily, without taking any money or bitcoins.
Brewster said his silence was “forced due to the actions of two people” including one forum member, who posted false information about his life and family.
“Those posts had much wider ramifications than they probably assumed they would have, so I hold them partially responsible for what has occurred since their posts,” wrote Brewster.
The last bit is perplexing, as it seems that Brewster might have had a falling out with key staff members.
Why did Brewster leave Cyprus?
Brewster insists that his decision to leave Cyprus was business-related and nothing more.
“My reason for leaving was to raise additional capital for the business through the sale of my equity as we had run out of liquidity, I had exhausted all of my own liquidity, too, through directors loans to the company. Every single bitcoin raised and spent is accounted for, any claims of embezzlement are nothing but empty claims with no foundation,” he said.
However, Brewster admitted the loss of bitcoins due to the closure of BitFunder/WeExchange, but he pointed out that he personally assumed that debt of 1,402BTC in order to protect the company.
Brewster continued:
Original recovery plan derailed
Brewster claims his plan was to raise more capital through the sale of some of his assets, but that he was forced to change his plans as soon as threats were made towards his daughter. Following the threats, he decided to sell all of his equity and allow the new owner to appoint a new CEO.
Brewster then outlined his backup plan:
He went on to say that his biggest mistake was using BitFunder/WeExchange during the fundraising process. Had he not had to cover the losses incurred due to the BitFunder failure, Brewster says he would have enough capital to cover all creditors and OPEX for the foreseeable future.
“I am working towards having this entire process completed within a short period of time to enable the business to recover, to ensure that those invested do not lose out following this process,” he said.
“I apologize for my silence but I would like to reiterate that ZERO customer funds are under my control and none have been lost or used for business purposes. My decisions are based on what I deem to be the best option for my family.”
The end of the road?
Neo and Bee was endorsed by several high-profile figures and had received a largely positive response from the bitcoin community upon its launch in Cyprus.
The company emphasised security: holding full bitcoin reserves, KYC and AML compliance, as well as top notch multisig cold storage. On the other side of the spectrum, it also had an expansive advertising campaign working to target mainstream consumers rather than bitcoin enthusiasts.
If Brewster manages to secure capital or find a buyer for his equity, Neo & Bee could survive, albeit under new management. However, for the time being it appears that his plans are on hold, at best.
http://www.cryptocoinsnews.com/news/cryptorush-mt-gox-alt-coins/2014/04/02
CryptoRush: The Mt. Gox Of Alt-Coins
The CryptoRush logo.
(c) Crypto Rush
(c) Crypto Rush
Today the soap-opera surrounding the CryptoRush exchange began heading towards the season finale, as publicized by an official statement at Moolah’s blog.
CryptoRush has faced scandal after scandal in the last thirty days, and is looking like they are down for the count. For a history of their troubles, see the section at the end of this article.
Enter Good-Guy Moolah.
I personally approached the CryptoRush team to see if there could be any attempt at salvaging them, [...]We would assume the liability, take over the operation (fold it down), and slowly repay people over time based on a % of our profits. We would be doing this solely to help the community, and prevent people from being (quite bluntly) screwed over. After finding out more information, I retracted the offer.-Moolah’s official statement.
Moolah retracted the offer after learning that CryptoRush’s management (who is mostly anonymous) was aiding the fraud of the exchange’s users by pumping and dumping certain coins, as well as selling an in-house scam coin called “CryptoRushShares.”
This Is Where It Gets Weird
After learning of the fraud at CryptoRush, Moolah encouraged the owner to do the honest thing and shut down the site and file bankruptcy, to which the owner replied that once he “regains his power” he will “finish” Moolah.
Moolah was later invited without warning to a Skype conversation with CryptoRush operator “Linkandzelda” and another individual claiming to be representing CryptoRush in a legal capacity. The “lawyer” would not provide their name, only that they practiced with the firm Di Tanno.
After threatening to “release” already public knowledge about Moolah (the fact that they have operated remotely), the CryptoRush lawyer made demands to Moolah,
“so, you are pleased to stop using the word fraud, either in private or public statement”“referng, but not liited, to twitter statement, facebook, other social media, and any other form of public and private communication”“now i understand when the privious owner contacted me, stating that you was the most inhumane person ever met, what he meant“
Multiple people have insisted on Moolah’s behalf that this is not connected to April Fools Day.
What exactly being “finished” entails for a company like Moolah has yet to be seen, but hopefully the community has seen the last of the damage caused by the negligence and lies of CryptoRush.
History
In just under a month, CryptoRush has experienced separate losses of both Zeitcoin and Blackcoin, each of which were caused by wallet issues allowing users to withdraw more funds than they had in their account.
After the losses incurred by those incidents, CryptoRush announced that they would issue CryptoRushShares that would pay holders dividends. That’s right, huge losses of over 1000 BTC, followed by the release of an in-house cryptocurrency, nothing shady here.
Right on cue, a support worker calling themselves DogeyMcDoge leaked what was going on with CryptoRushShares:
I was informed of the plan to announce CryptoRushShares, a currency that would pay % fees to holders. And the kicker? Fyrstikken would announce 60% ownership of them. But in the back room?[3/14/2014 10:48:15 PM] ”Basically, he’s helping me gain capital back from share buyers. He started by announcing 60% shareholding, but he actually owns only 10%.”
Around the time this fraud came to light, a mysterious “new owner” stepped in that is even more anonymous than the old ones. Only time will tell how much worse the saga can get.
http://blog.coinbase.com/post/81407694500/update-on-coinbase-data-security
Update on Coinbase Data Security
Apr 1st, 2014
Despite speculation on a few forums, there has been no data breach of names or emails at Coinbase. We wanted to take this opportunity to address any concerns.
Specifically with regard to the ‘request money’ feature of Coinbase, it is highly inaccurate to suggest that names or emails were leaked or that there has been a breach. Our new Director of Security Ryan McGeehan responded accordingly in our whitehat responsible reporting tool. Here are the high level points:
Requesting money as spam
It is intentional that Coinbase users are able to send invoices to an arbitrary number of email addresses. Allowing lists to be invoiced is core functionality of our service, and this functionality is intentionally built into our API, which is rate limited:
This process simply sends an email with a request. It does not initiate any bitcoin transfer without confirmation from the recipient, and would not be any more effective than more traditional phishing methods, which we spend a considerable amount of time preventing.
Email address / user enumeration on Coinbase
It’s important to note that using an email address to determine if someone has an account on a service is the norm across most internet sites today. You’ll find that user enumeration is possible on Facebook, Google, Dropbox, and nearly every other major internet site.
You’ll also find many leading payment services allow user enumeration, including Paypal, Venmo, Square Cash, and many others. One simply needs to try sending or requesting money using one of these services to an email address to see this in action. The name of the user or business will be revealed on the next step.
Using user names in our service is an important component in providing a positive and responsive user experience. And to be clear - a sender would need your email address in advance to be able to send you a request for money.
We’ve spent a good amount of time investigating this behavior and we believe that the risks are minor.
Information disclosure of coinbase accounts (first and last name)
For individuals who list a name, our product and Privacy Policy make it explicitly clear that this contact information can be displayed - and in turn, make Coinbase a more human user experience.
We’d also like to address the claim of a “leaked” list of Coinbase emails and user names. This list (the size of which is less than one half of one percent of Coinbase users) was not the result of a data breach at Coinbase. This list of emails was likely sourced from other sites - probably Bitcoin related ones. It’s clear there was no data breach because no other user information is provided.
Conclusion
Though we believe this type of spam and user enumeration activity doesn’t represent a significant risk to Coinbase customers, we absolutely recognize that it can be an inconvenience and cause confusion. We have already implemented a number of things which make this type of activity less convenient for would-be spammers. For example, we employ rate limits around sensitive actions, such as requesting money, to prevent them from being abused at scale. We’re fine tuning this existing rate limiting to make it more restrictive. To those who have received spammy requests, we apologize.
We are continually striving to make Coinbase as safe and secure as possible for all of our users, and in the coming weeks, we will perform a more extensive overview of the existing controls we have in place to see how they can be improved.
We will continue to update this blog post as more information is made available. As always, if you have any questions or concerns about the security of your account please visit us at http://support.coinbase.com/ .
Coin Desk......
Ross Ulbricht’s Attorney Cites IRS
Guidance in Motion to Dismiss
Charges
Published on April 1, 2014 at 21:35 BST | Regulation, Silk Road News, US & Canada
An attorney representing alleged Silk Road mastermind Ross Ulbricht has asked that a federal judge dismiss four charges against his client as part of his ongoing New York indictment.
In a 64-page filing submitted to the District Court of the Southern District of New York this weekend, Ulbricht’s defence attorney, Joshua Dratel, argues that one count of money laundering, running a criminal enterprise, narcotics conspiracy and conspiracy to commit computer hacking be dismissed, stating that they are vague and do not cover his client’s alleged conduct.
Perhaps most interestingly, Dratel took issue with the money laundering charge, adopting the position that bitcoin does not qualify as a money instrument under the law, due in part to the wording used in formal FinCEN and IRS guidance on the issue.
Read the filing:
Were Ulbricht and his attorney to win this motion, the report suggests he would still face criminal charges in Maryland relating to a separate federal indictment.
Recent IRS ruling plays key role
In his motion, Dratel made the case that money laundering is clearly limited to the use of certain money instruments, of which bitcoin is not named.
Further, he pointed to last week’s ruling by the Internal Revenue Service (IRS), which ruled that bitcoin should be treated as property and, not a currency, as added evidence that the charges listed against Ulbricht don’t fit his alleged crimes.
According to a Wired report, the charges listed by Dratel represent most of those filed against him in New York. The 30-year-old Ulbricht was indicted earlier this February, and eventually entered a plea of not guilty to the charges.
Silk Road case continues
The filing marks the latest chapter in the ongoing saga of Silk Road, which has spawned a variety of cases, including those by the site’s supposedly legitimate sellers.
Started in 2011 with the intent to become a kind of anonymous Amazon.com, Silk Road quickly captured the public’s imagination as an illicit underground marketplace. Following the arrest of Ulbricht in connection with the case in October, the case itself quickly became the focal point of those who feared Silk Road would be used by the government to pass restrictive regulations on the new digital currency technology.
Despite these concerns, however, governments have increasingly warmed to the idea of digital currencies, with New York most recently opening applications forregulated bitcoin exchanges it expects to be in operation by the end of this year.
For more on the latest filing in the case, read the text in full below:
Gavel image via Shutterstock
Judge Orders Mark Karpeles to
Submit to Questioning in US
Mark Karpeles, the CEO of troubled Japan-based bitcoin exchange Mt. Gox, must travel to Dallas, Texas, this month to take part in his formal deposition, a form of sworn testimony that will lay the groundwork for his future defense.
Karpeles had previously suggested that the deposition take place in Taipei, Taiwan, though this motion was strongly opposed by lawyers representing US-based former exchange users.
Further, Karpeles will have compelling reason to make the trip, as the judge suggested that the journey will be necessary if he wants an extension of the company’s bankruptcy protection in the US.
A Reuters report today quoted US Bankruptcy Judge Stacey Jernigan as saying:
More details
Under Chapter 15 of US bankruptcy law, protection from creditors is not granted or extended automatically. However, Mt. Gox KK, the company’s Japanese entity was granted an initial stay by the courts earlier this March. The stay has thus far prevented lawsuits from threatening this part of the company’s assets and shielded it from fact-finding.
That stay was not granted to Mt. Gox Inc., its US entity, Tibanne KK or Mark Karpeles personally.
A hearing is scheduled for 20th May to decide whether Mt. Gox deserves to continue with such protection, and courts are likely to view the matter less favorably if they don’t have Mt. Gox management’s full cooperation.
Karpeles will have to appear at the offices of Baker & McKenzie, the firm representing Mt. Gox both in the US and Japan, in Dallas on 17th April, according to Jernigan’s order.
Mt. Gox’s Chapter 15 bankruptcy was filed in Dallas, though depositions are informal and generally take place outside of a court.
A reluctant witness
To date, Karpeles has shown a strong reluctance to appear personally in the US since his once-dominant bitcoin exchange imploded in February, though he did allegedly meet with lawyers in the US around the time of Mt. Gox’s initial bankruptcy filing.
Karpeles had offered to hold the deposition in Taiwan instead, suggesting US representatives unable to question him there could use a video link instead.
The bankruptcy hearings are separate to Mt. Gox’s other legal problems in the US, such as Illinois resident Gregory Greene’s class action suit. Mt. Gox also wants to delay any US action until after its bankruptcy proceedings in Japan are completed.
Further, these cases are joined by its as-yet-unresolved dispute with former partner Coinlab, which dates back to early last year.
Losing patience
There was a hint of frustration in Jernigan’s words, particularly when Baker & McKenzie attorney John Mitchell said Mt. Gox may replace Karpeles as its ‘foreign representative’ in US bankruptcy court. “He filed the case,” she replied.
Mt. Gox has been fulfilling its local legal obligations and doing most of its communicating in Japanese first recently, but its largest customer base by far was the US.
Karpeles, who was born in France and lives in Japan, speaks English as a second language and may be unsettled at the prospect of facing questioning from a US court, or even angry US customers in person. He is, however, probably also the only person with any idea of what truly happened to Mt. Gox’s finances.
According to previous reports from company employees, who were all on short-term contracts, no-one outside management had any access to the Gox’s records and attempts to ask Karpeles to prove the company’s reserves were rebuffed.
Central Bank of Colombia
Says ‘Bitcoin is Not a
Currency’
Published on April 1, 2014 at 22:57 BST | News, Regulation
On Tuesday, 1st April, Banco Central de Colombia, the central bank of the South American nation, issued new statements regarding bitcoin, confirming that the digital currency is not considered a currency or a means of legal tender in the country.
The news comes roughly one week after the Superintendencia Financiera de Colombia (SFC), the government body with jurisdiction over the Colombian financial system, issued a ruling that domestic banks would be barred fromholding, investing in or brokering bitcoin transactions.
Said the central bank, according to reports:
The central bank also reiterated the SFC’s 26th March finding that bitcoin does not meet the definition of a currency because it is not backed by a central bank.
Bitcoin discussions continue
Colombia has been increasingly active on matters relating to digital currencies in recent weeks, following the 20th March rumours that the SFC would move to ban bitcoin transactions altogether.
This report later turned out to be exaggerated, as Colombia issued guidance similar to that originally posed by China and Mexico, barring its banks from interacting with the sector.
Speaking to CoinDesk, members of the local Colombian digital currency community were optimistic at the time that this represented a first step in relations between regulators and local enthusiasts.
Community reaction
Roman Parra, CEO and founder of Colombia-based bitcoin buying and selling service Bitcoin Suramérica, confirmed the statements were a continuation of past guidance. However, Parra found them particularly troubling given that they represent what he considers a lack of interest from the government in developing or building the local bitcoin ecosystem.
Still, he notes, the question of whether bitcoin is money in Colombia does have an impact on local business.
According to Parra, as in much of the world, it’s still unclear how bitcoin transactions completed in Colombia should be treated for tax purposes.
Explained Parra:
Bitcoin in South America
Research from BitLegal suggests that only a few South American governments have spoken out about bitcoin and digital currencies. Its records show Colombia. Brazil and Argentina have all issued guidance to their local communities.
Further research from the US Law Library of Congress indicates Chile has also issued formal statements.
However, even countries that haven’t addressed digital currencies, such as Venezuela, have seen a recent rise in bitcoin enthusiasm, suggesting more countries in the region may need to follow suit.
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