Tuesday, May 6, 2014

Bitcoin News for May 6 and 7 - 2014 ---- China front and center ( BTC China halts yuan deposits , Ping AnBank and China Everbright Bank unilaterally ban bitcoin related accounts or accounts with bitcoin or litecoin activity , Five Chinese Exchange CEOs pull out of Global Bitcoin Summit set for Beijing ) ........ US and General News Round up !


China And Bitcoin: Two Chinese Banks Announce 

That They Will Cancel Accounts Associated With 

Bitcoin Or Litecoin

Flag of the People's Republic of ChinaThe latest Bitcoin news from China is in.  A handful of Chinese banks have decided to kick off the week by unilaterally banning Bitcoin-related accounts.   Tuesday morning in China, Ping An Bank and China Everbright Bank both posted notices to their website announcing that they would suspend accounts of individuals or organizations caught participating in Bitcoin or Litecoin transactions.  Both banks explicitly mentioned the PBOC as the source of this decision.  Also, both banks call for the public at large to report any individuals or organizations that might be involved with Bitcoin or Litecoin trading.  Recently, Chinese banks have started halting deposits into Chinese Bitcoin exchange, and a smaller Bitcoin exchange has even thrown in the flag.
Over the last several months, the Chinese Bitcoin exchanges have jumped through many hoops to get Chinese RMB into and out of their coffers.  Some exchange heads used their personal bank account to receive and transfer Fiat in and out of the exchange once Chinese banks started cracking down on Chinese Bitcoin exchanges months ago.  Most otherChinese Bitcoin exchanges eventually adapted to a voucher/code  system that was originally pioneered by BTC China.  Now, though, the Chinese banks that have promised to suspend any Bitcoin or Litecoin related accounts have also explicitly banned the funding of voucher codes, one of the harshest blows to the Bitcoin community yet.  However, the light at the end of the tunnel isn’t a quiet resting place; instead, it is the intrepid light of hope.  Bitcoin ATMs have started to spring up all around China and BTC China has promised to release a Picasso web application that will turn any willing Chinese into walking and talking bi-directional Bitcoin ATMs.  The web-app will be able to run on any smart phone since it operates within a browser, unlikeMyCelium’s Local Trader App which has similar functionality but is only available on Android.
Below are the translated announcements from Ping An Bank and China Everbright Bank.
English Translation:
In accordance with the PBOC’s notice on the prevention of Bitcoin risk (No. 289), and for the protection of the public’s interests, and to safeguard the legal status of the Yuan currency as well as to prevent money laundering risks… From this day forward, any organization or individual that participates in Bitcoin or Litecoin trading withdrawals or deposits, purchase or sale of recharge codes, or other related transactions are not allowed to use their bank account to transfer funds for that purpose.  If found, the bank is entitled to suspend such transactions and cancel such accounts.
If the public finds out about such acts, they can be reported to the bank online.
This announcement is hereby certified.
English Translation:
In order to protect the public’s interest, maintain the exclusive legal tender status of RMB and to prevent money laundering risks…From this day forward, any organization or individual that participates in Bitcoin or Litecoin trading withdrawals or deposits, purchase or sale of recharge codes, or other related transactions are not allowed to use their bank account to transfer funds for that purpose.  If found, the bank is entitled to suspend such transactions and cancel such accounts.  If found, the bank is entitled to suspend such transactions and cancel such accounts.
If the public finds out about such acts, they can be reported to the bank online.
This announcement is hereby certified.
That’s right; both banks use the same wording after slightly different introduction sentences.  I wonder where a Beijing Bank (China Everbright Bank) and a ShenZhen Bank (Ping An Bank) would get the same exact “certified” words from… I’m looking at you PBOC.  The PBOC originally released the infamous Notice No. 289 back in December of 2013.  Chinese banks ignoredprevious deadlines set by the PBOC which drew their direct attention and resulted ininquiries/interviews with Chinese banks and third party payment processors.  The result of the recent PBOC crackdown is becoming very clear.  Bobby Lee still maintains that he hasn’t seen anything from the PBOC; however, even BTC China has been forced to close Fiat deposits due to action from their bank: Bank of China.
As Nassim Taleb tweeted, then retracted, almost a full calendar year ago (a millennium in Bitcoin years):
“For bitcoin to make it it needs to be banned by a few governments and critiqued by policy makers. Otherwise it will fade. #Antifragile.”


BTC China Halts Yuan Deposits 

from Bank of China

 (@southtopia) | Published on May 6, 2014 at 11:15 BST | AnalysisAsiaBTC China,CompaniesExchangesNewsRegulation
BTC China announced to its English-speaking users via Twitter today that it has suspended yuan (RMB) deposits from the Bank of China.
In its second such announcement since 26th April the exchange said:
Chinese exchanges have suffered major setbacks recently after banks finally responded to repeated directives from the People’s Bank of China (PBOC) – China’s central bank – and shuttered all relationships with bitcoin businesses.
All are said to be looking for new business opportunities after seeing trade volumes plummet.

Bank forces closures

Some smaller exchanges have shut down their businesses altogether, including FXBTC and the boutique exchange Linkcoin.
Both exchanges cited central bank policy as the reason for shutting down, acknowledging they could not stay in business without banking access.
Linkcoin, which reportedly had only a handful of customers, posted the following statement:
“May 1st announcement: due to policy reasons the deposit channel is blocked – our site will be closed on May 11th. Users please withdraw your RMB and cryptocurrency. If you still have assets after the 11th our website [sic] you can contact us to process it manually.
We will keep the contact channel active for one month, if there is any policy change we don’t deny the possibility of bringing our website back online.”
In further news, CoinDesk reported earlier today that CEOs of five major Chinese bitcoin exchanges have withdrawn from this weekend’s Global Bitcoin Summit in Beijing, also in relation to central bank restrictions on bitcoin activity.


Five Chinese Exchange CEOs 

Pull Out of Conference

 (@southtopia) | Published on May 6, 2014 at 08:26 BST | AsiaBTC ChinaExchanges,NewsRegulation
CEOs of five major Chinese bitcoin exchanges have withdrawn from this weekend’s Global Bitcoin Summit in Beijing, after banks forced most of them to close accounts related to bitcoin activity.
The five exchanges: OKCoinHuobi,BTC ChinaBtcTrade and CHBTC, made a lengthy joint statement on Weibo late Tuesday that they would no longer participate in large bitcoin meetings or gatherings. The statement continued that the companies agreed to: Curb excessive speculation and protect investors, comply with all state policies and regulations, promote transparency in exchange processes, pay a flat fee for high-frequency trades, and report the latest industry developments to authorities.
The speakers’ list would have included OKCoin’s Star Xu, BTC China’s Bobby Lee and Huobi’s Leon Li. Pulling out of the event will lower the exchanges’ profile and avoid provoking unhappy authorities into further action by having management speak in public.

Conference still fine

Despite the People’s Bank of China’s (PBOC) disapproval of bitcoin, ticket sales for the two-day Summit on 10th-11th May are said to be “stellar” and representatives from other bitcoin businesses will still play a part.
There is far more to China’s bitcoin economy than just exchanges, and Summit speakers will discuss new innovations, startup advice, communication with outside markets and future directions for bitcoin in China.
The Summit’s president is Li Xiaolai, whose bitcoin private equity companybitfund.pe is organizing the event with UBM China.

Other Summit speakers

Scheduled international speakers who still plan to attend the Summit are Roger Ver, Ethereum’s Vitalik Buterin and Anthony di Iorio from the Bitcoin Alliance of Canada. The list also includes a number of representatives from Chinese bitcoin startups and organizations including Peat.io, BTC123, BitAngels and Bifubao.

What actually happened in China?

Commenters on bitcoin forums have been bewildered at events in China this year, sometimes mistaking the actions of businesses and central bank for a series of policy backflips and creating the inaccurate ‘China banned bitcoin again‘ meme.
In reality, nothing much changed. The PBOC announced its desire for banks not to engage in business with bitcoin exchanges in December last year, and has not changed its position since then.
Bitcoin entrepreneur Zhang Weiwu put events into perspective with thisexperienced analysis of Chinese business politics and the orders of magnitude affecting both profit and power.
Bitcoin, he wrote, represents too small a sector for an authority the size of the PBOC to deal with directly on a political level, leaving consumer banks confused as to how to act. This allowed exchanges to sidestep the directives for a time, until the PBOC was forced to reaffirm its opposition to bitcoin in more certain terms.
This may also explain why bitcoin exchanges never received any official notice from the PBOC itself: An authority representing 1.3 billion people does not deal directly with local business, and bitcoin is still relatively obscure.

What’s next for bitcoin?

The way forward for other sectors of China’s bitcoin economy will be interesting. Businesses less reliant than exchanges on fiat-crypto gateways, such as merchant services and secure wallets, and the ASIC hardware manufacturers keeping China’s booming mining operations equipped, are reportedly shrugging at the bank bans and pushing on with their growth plans.
As for exchanges themselves, they will go about their business under the guidelines listed in their joint statement above, guides that appear to keep a tight rein on their activities.
CoinDesk will be attending the Global Bitcoin Summit in Beijing for further reports.

US News......

Bitcoin Speakers Announced for 

US Banking Task Force Hearing

 | Published on May 6, 2014 at 17:15 BST | BitPayNewsRegulationUS & Canada
The US Conference of State Bank Supervisors (CSBS) is planning to hold a public hearing on emerging payments issues, including digital currencies.
The hearing will be organised by the CSBS Emerging Payments Task Force and it will take place in Chicago on the 16th of May.
The task force was formed earlier this year to examine new trends in payment systems and determine their potential impact on consumer protection, banks and laws governing the industry.
The CSBS says the purpose of the hearing will be to obtain information from a variety of entities and individuals involved in the payments system.
The hearing will include panel discussions on legacy payment systems, retail payment innovations and digital currencies, and will be open to both the public and the media.
The digital currency panel will feature executives and representatives from four prominent bitcoin companies:
  • Bryan Krohn, Chief Financial Officer, BitPay
  • Karsten Behrend, Head of Compliance, Xapo
  • Megan Burton, Chief Executive Officer, CoinX
  • Annemarie Tierney, EVP Legal and General Counsel, SecondMarket

ATM industry report upbeat on bitcoin

In related news, the Electronic Funds Transfer Association (EFTA) and the ATM Industry Association (ATMIA) have released the findings of a research report on bitcoin.
The commissioned report was compiled by Value Partners Management Consulting, which also produces bi-annual reports on ATM trends.
Called ‘Bitcoin: Virtual Currency with Real Opportunities’, the document appears to be largely positive, as the title indicates.
ATMIA CEO Mike Lee said the ATMIA and the EFTA are keen to develop industry positions on bitcoin and he sees room for synergy, adding:
“This excellent report presents a history and comprehensive international analysis of bitcoin, while at the same time showing how virtual currencies and ATM systems can interface for their mutual benefit.”

Bitcoin is here to stay

As for the future of bitcoin, Lee does not appear to be overly concerned:
“I think bitcoin will still be standing, despite its ups and downs, in the medium term, perhaps even in the long-run.”
Franscesco Burelli, Partner at Value Partners, said digital currencies are proving to be a “new opportunity” for ATM operators.
“The ATM is an ideal touch-point channel between the not-so-intuitive cryptocurrencies and the consumers who may want to leverage the new payment methods but may not be sufficiently technically savvy to liaise directly with exchanges and cryptographic wallets,” he said.

News Round up......

Bitcoin News in Review: Bitcoin Price, 

Sean’s Outpost, Operation Choke Point, 

and More

CCN Week in Review: Bitcoin Price, Sean's Outpost, Operation Choke Point, and MoreWelcome to another Bitcoin News in Review, where we feature our top Bitcoin and cryptocurrency stories of the week. This week, we analyzed the Bitcoin price, saw troubles at Sean’s Outpost, saw the results of the DOJ’s “Operation Choke Point”, and more. Calvin Tran‘s back with another excellent video, which you can watch below. After that, keep scrolling to see our biggest stories this week on CryptoCoins News.

Bitcoin Price Stability?

Bitcoin Rollercoaster
Is bitcoin price no longer a roller coaster?
Bitcoin is considered by many to be one of the most volatile investments possible. However, for the past few weeks, the price seems to have been dancing around $450 on most exchanges. Despite this short-term stability, CCN’s Venzen Khaosan predicts another price drop before BTC starts taking off again. Bitcoin price is difficult to analyse and predict since the currency is so new. There are several external factors that can have huge impacts on the price, although the external factor effect seems to be declining recently. What do you think? Will bitcoin make it to the moon? Or will we see more price drops?

Sean’s Outpost Faces Adversity

outpost cots
The Outpost Thrift has been doubling as a shelter while Pensacola recovers from flash floods.
Sean’s Outpost is well-known amongst the bitcoin community for helping out the homeless. The Pensacola-based homeless outreach has used over $100,000 in BTC to provide the homeless with food and shelter. However, Sean’s Outpost has seen quite a bit of trouble recently. In February, Pensacola made it illegal to sleep in public with any type of covering in the hopes of forcing the homeless to relocate. This ordinance was fortunately abolished after the city received pressure from citizens affiliated with Sean’s Outpost. Soon afterwards, the city tried to prevent Sean’s Outpost from allowing homeless people to camp in Satoshi Forrest, a campground established by the Outpost. But as if the organisation weren’t facing enough adversity already, Pensacola was hit by a massive storm this week with two feet of rain and massive flash-floods. However, the team isn’t giving up.
“At some charities, people are making a hundred thousand dollars salary, and I can tell you we’re not making anywhere near that (I wouldn’t want that), but we are successful by our definition. As long as we are able to help someone, that’s success.”
If you’d like to help Sean’s Outpost help the homeless community, please visit their donation page. They accept bitcoin, Litecoin, Dogecoin, and other cryptocurrencies.

Operation Choke Point

Operation Choke Point
Operation Choke Point has forced many industries to turn to bitcoin.
You can always count on the U.S. Department of Justice to come up with sinister names like this. “Operation Choke Point” is the DOJ’s effort to “choke” out specific industries by restricting their access to financial services. The DOJ encourages banks and third party payment processors to close the accounts of individuals and businesses associated with firearms, pornography, online lending, and other high-risk merchant categories. Interestingly (if not unsurprisingly), this has driven many of the affected industries towards bitcoin. However, even bitcoin payment processors are feeling pressure from Operation Choke Point. Coinbase and BitPay have both refused to work with legal marijuana distributors. However, industries affected by Operation Choke Point can still easily accept bitcoin without third party payment processors. With bitcoin, you really do get to “be your own bank”.

More Scrypt ASICs

Innosilicon A2 Terminator Scrypt ASIC
Meet the Innosilicon A2 Terminator.
There’s no stopping scrypt ASICs. This week, Innosilicon announced new 28nm chips for their miners. Their prices are relatively high, but Innosilicon will be delivering 28nm sooner than all of its competitors. The company’s chips hash at around 1.7 MH/s while consuming 13 Watts of power. Meanwhile, FibonacciMining ASICs Technologies, and KnCMiner are getting ready to deliver their miners and have promised to fulfill preorders before the end of 2014.