Virtual Currencies

2014-07-01 Crypto-Timeline

Here is a log with relevant legal, regulatory, law enforcement and business risk milestones in the race of crypto-currencies to maturity with links to trusted sources.

The  Key JUNE 2014 Crypto-Events were:

• 6/2/14 – Dutch Central Bank warns banks and payment institutions about virtual currency risks
• 6/4/14 – Swiss regulators block Zurich bitcoin ATM launch
• 6/6/14 – European central bankers argue digital currency requires institutional control
• 6/10/14 – Isle of Man outlines plan for digital currency regulation
• 6/12/14 – Feds to auction $17.4 million in bitcoin from Silk Road
• 6/17/14 – US judge approves Mt.Gox’s chapter 15 bankruptcy filing
• 6/17/14 – California reminds businesses to apply sales taxes to digital currency transactions
• 6/18/14 – Swedish Central Bank acknowledges benefits of cryptocurrencies
• 6/19/14 – Bolivia’s Central Bank bans bitcoin
• 6/20/14 – Swiss regulators give green light for bitcoin ATM network
• 6/23/14 – US senator to spearhead Bitcoin public awareness effort
• 6/23/14 – Canada amends national law to regulate bitcoin
• 6/25/14 – Switzerland government report: bitcoin too insignificant for legislation
• 6/25/14 – Underfunding is leaving Bitcoin development crisis
• 6/28/14 – California governor signs bill to bring bitcoin and other currency into fold

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2014-06-01 Crypto-Timeline

Here is a log with relevant legal, regulatory, law enforcement and business risk milestones in the race of crypto-currencies to maturity with links to trusted sources.

The  Key MAY 2014 Crypto-Events were:

• 5/1/14 – Bank of Canada unconcerned about Bitcoin’s growing popularity
• 5/1/14 – Idaho releases investor advisory on digital currency
• 5/5/14 – US government to study Bitcoin as possible terrorist threat
• 5/7/14 – US SEC warns Bitcoin’s hype may put investors at risk
• 5/8/14 – Two more Chinese banks to close bitcoin trading accounts
• 5/8/14 – Dutch Central Bank: Bitcoin ‘no viable alternative’ to fiat currency
• 5/8/14 – US Federal Election Commission allows use of bitcoins for donations to political committees
• 5/9/14 – Japan makes first Bitcoin-related drug arrest
• 5/13/14 – Bank of Canada says Bitcoin could destabilize global finance
• 5/14/14 – Paying workers in bitcoins may be illegal under Swiss law
• 5/14/14 – Indiana releases Bitcoin investor advisory
• 5/14/14 – Japan Ministry to track illegal Bitcoin deals
• 5/19/14 – New Mexico state Securities Division issues consumer warning on Bitcoin
• 5/19/14 – Dutch court declares bitcoin isn’t money in civil trial
• 5/21/14 – European Central Bank: bitcoin a risky alternative to the euro
• 5/23/14 – Spanish regulation to treat taxation of bitcoin like cash
• 5/23/14 – Spanish tax authority is monitoring Bitcoin for use in illicit activities
• 5/23/14 – Maine regulators issue investor advisory on digital currencies
• 5/23/14 – German bitcoin tax proposal would sting merchants twice
• 5/26/14 – Massachusetts regulator on Bitcoin: “We want to make sure when we act we get it right”
• 5/27/14 – Polish tax authority: Bitcoin mining profits subject to 23% VAT
• 5/28/14 – Argentina Central Bank issues warning to burgeoning Bitcoin ecosystem

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2014-05-01 Crypto-Timeline

Here is a log with relevant legal, regulatory, law enforcement and business risk milestones in the race of crypto-currencies to maturity with links to trusted sources.

The  Key APRIL 2014 Crypto-Events were:

• 4/2/14 – Bitcoin digital currency exchange deemed illegal in Vietnam
• 4/3/14 – Texas momorandum outline Bitcoin exchange guidelines
• 4/4/14 – Bulgaria issues new taxation guidelines for digital currency
• 4/7/14 – Dutch regulator says Bitcoin is technology, not money
• 4/7/14 – Royal Canadian Mint ditches MintChip digital currency project
• 4/8/14 – Brazil to tax investors, not everyday users
• 4/8/14 – Bank of Japan governer: bitcoin is too unreliable to be a currency
• 4/8/14 – US Attorney General keeping and eye on Bitcoin
• 4/9/14 – National Australia Bank turns back on Bitcoin, closes accounts
• 4/10/14 – Florida bitcoin money laundering case tests the system
• 4/11/14 – Cyprus issues arrest warrant for Neo & Bee’s CEO Danny Brewster
• 4/12/14 – Chinese regulators make life hard for crypto-currencies
• 4/12/14 – Bitcoin promoter Shrem indicted in NY for money laundering
• 4/13/14 – France: Bitcoin revenues must be declared to tax authorities
• 4/23/14 – California regulators issue Consumer Advisory on Bitcoin
• 4/25/14 – Nevada regulators issue Consumer Advisory on Bitcoin
• 4/26/14 – BTC China halts renminbi account funding
• 4/28/14 – Ohio bans bitcoin for alcohol sales
• 4/29/14 – FinCEN declares Bitcoin cloud mining and escrow services are not money transmitters
• 4/30/14 – Reserve Bank of Australia: Bitcoin ‘limited risk’ to payment systems

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2014-04-01 Crypto-Timeline

Here is a log with relevant legal, regulatory, law enforcement and business risk milestones in the race of crypto-currencies to maturity with links to trusted sources.

Phew.  Short month, but no shortage of shocking news in February!

The  Key MARCH 2014 Crypto-Events were:

• 3/3/2014 – UK to cancel VAT on bitcoin trading
• 3/4/2014 – Bitcoin bank Flexcoin shuts down after theft
• 3/6/2014 – Russia’s anti-Bitcoin stance may be softening, reports say
• 3/7/2014 – Japanese government says Bitcoin “not a currency,’ forms investigation committee
• 3/10/2014 – Philippines regulator issues warning on digital currencies
• 3/10/2014 – French minister calls for EU action on Bitcoin regulation
• 3/11/2014 – New York starts accepting licence applications for digital currency exchanges
• 3/11/2014 – Bank of Mexico restricts banks from Bitcoin use, reports suggest
• 3/11/2014 – Luxembourg opens dialogue with Bitcoin businesses in new statement
• 3/13/2014 – Singapore to regulate bitcoin exchanges and ATMs
• 3/13/2014 – Bank of England: digital currencies are similar to commodities
• 3/17/2014 – Texas regulators warn about risks of ‘trendy’ digital currencies
• 3/17/2014 – Dutch official downplays law enforcement need for Bitcoin ban
• 3/17/2014 – Bundesbank board member warns agains ‘highly speculative’ Bitcoin
• 3/18/2014 – Bank of Thailand suggests Bitcoin illegal but warns against its use
• 3/19/2014 – Danish Central Bank compares bitcoins to ‘glass beads’
• 3/25/2014 – IRS says bitcoin, other convertible virtual currency to be taxed like stock
• 3/25/2014 – UK cash-for-bitcoin service ZipZap suspends BTC transactions
• 3/25/2014 – European Central Bank: Bitcoin shouldn’t be ignored or dismissed
• 3/25/2014 – UAE Department of Economic Development officials debunk Bitcoin ATM speculation in Dubai
• 3/25/2014 – Denmark declares bitcoin trades are tax-free
• 3/26/2014 – Colombia stops short of Bitcoin ban, bars banks from industry
• 3/27/2014 – Study finds Mt Gox may have lost just 386 BTC due to transaction malleability
• 3/28/2014 – Isle of Man welcomes digital currency exchanges ‘No License Required’
• 3/28/2014 – Bitcoin prices tank on rumors of China ban
• 3/29/2014 – Court grants order to freeze Hashfast’s bitcoin wallets 

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Thoughts on a Country Adopting a Bitcoin-Like Currency

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A few months ago, a Latin American advisory group asked me to comment on the Digital Sucre and the potential impact of a country adopting a digital or crypto currency as legal tender.  It never occurred to me that I should post the surface-scratching responses I came up with, until American Banker‘s Bailey Reutzel asked the question (here).  With the upcoming release of AuroraCoin in Iceland, and the adoption of a bitcoin clone by the Oglala Lakota Native American nation, this seems to be a good time to poke the discussion.  So here go my two cents in the hope that a few extra thoughts will be triggered.

In concept, is bitcoin more a currency or a payments system?

Bitcoin is both.  In addition, and most importantly and fundamentally, it’s also a protocol on top of which additionally functionality can be built.  The fact that Bitcoin (with a capital B) is multiple things at once is what creates most of the confusion about it.  Bitcoin is a sophisticated globally distributed asset register that, at this moment in time, is mostly being used to register value in USD or other fiat currencies.  Hence the fact that it’s Continue reading →

2014-03-01 Crypto-Timeline

Here is a log with relevant legal, regulatory, law enforcement and business risk milestones in crypto-currencies’ race to maturity with links to trusted sources.

Phew.  Short month, but no shortage of shocking news in February!

The  Key February 2014 Crypto-Events were:

• 2/1/2014 – Bank stops working with bitcoin exchange CampBX due to regulatory concerns
• 2/2/2014 – Law Library of Congress releases report on Bitcoin’s legal status worldwide
• 2/4/2014 – Bitcoin scam costs Wisconsin man $150,000
• 2/5/2014 – Kazakhstan Central Bank could ban Bitcoin to protect bankers
• 2/6/2014 – Apple removes the last remaining Bitcoin app from the Apple Store
• 2/6/2014 – Indonesia Central Bank takes new, more neutral stance on Bitcoin
• 2/7/2014 – Mt. Gox halts all bitcoin withdrawals, price drop follows
• 2/7/2014 – Florida targets high-dollar bitcoin exchangers without money transmitter licenses in the State Continue reading →

2014-02-01 Crypto-Timeline

Here is a log with relevant legal, regulatory, law enforcement and business risk milestones in crypto-currencies’ race to maturity with links to trusted sources.

The  Key January 2014 Crypto-Events were:

• 1/1/2014 – Bitcoin ASIC manufacturer facing lawsuits over alleged false advertising
• 1/2/2014 – Lebanon’s central bank issues Bitcoin warning
• 1/3/2014 – Malaysian central bank has no plans to regulate Bitcoin
• 1/6/2014 – Taiwan regulators block Robocoin Bitcoin ATMs
• 1/7/2014 – German central bank official issues another Bitcoin warning
• 1/8/2014 – China’s largest online shopping site banks Bitcoin trading and sales of related products
• 1/9/2014 – Hong Kong treasury official issues Bitcoin warning
• 1/9/2014 – Singapore lays out tax rules for Bitcoin
• 1/9/2014 – Overstock.com starts accepting bitcoins
• 1/10/2014 – Backed by Lloyd’s of London, new UK startup offers insured Bitcoin vault
• 1/14/2014 – Wells Fargo calls Bitcoin summit on ‘rules of engagement’
• 1/15/2014 – French Senate holds hearings on Bitcoin and digital currencies
• 1/15/2014 – Irish lawmaker calls for investigation into Bitcoin and the Deep Web Continue reading →

What Would a BitLicense Look Like?

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Last November, the New York State Department of Financial Services issued a notice communicating its intent to hold a hearing on virtual currencies, with the purposes of reviewing “the interconnection between money transmission regulations and virtual currencies,” and considering “the potential issuance of a BitLicense specific to virtual currency transactions and activities.” The hearings are scheduled to be held on January 28 and 29 in downtown Manhattan.

I thought it would be useful to start a conversation on this topic by offering my experience-based perspective on the New York state licensing and examination process, and by posing a few trigger questions.

By way of background, the reason virtual currencies, New York and licensing appear in the same sentence is that in March of 2013, the United States federal government issued guidance equating virtual currency exchangers and administrators with money transmitters, a category of non-depository financial institution that in the United States, to the chagrin of crypto-preneurs worldwide, is subject to licensure by individual states.  Licensing is intended to subject industry participants to a supervisory authority primarily for purposes of Continue reading →

2014-01-01 Crypto-Timeline

Here is a log with relevant legal, regulatory, law enforcement and business risk milestones in crypto-currencies’ race to maturity with links to trusted sources.

The  Key December 2013 Crypto-Events were:

• 12/1/2013 – Dutch Rabobank blocked bitcoin for ‘ethical reasons’
• 12/2/2013 – 96,000 BTC are stolen and angry users chase thief around the Internet
• 12/3/2013 – The Dutch Central Bank warns about virtual currency risks
• 12/5/2013 – China bans its banks from handling Bitcoin
• 12/5/2013 – French central bank warns over Bitcoin risks
• 12/5/2013 – Bitcoin valued at $1,300 by Bank of America analysts
• 12/8/2013 – India’s central bank expresses concern about Bitcoin’s risks
• 12/9/2013 – Swiss parliament requests legal clarity on Bitcoin, including declaring it a currency
• 12/9/2013 – JPMorgan Chase building Bitcoin-killer
• 12/10/2013 – Apple blocks bitcoin payments on secure messaging app Gliph Continue reading →

“Bitcoin Is the Perfect Way to Transfer Money Globally”

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Interview with Alan Safahi, founder and CEO of ZipZap

Last July, at the Inside Bitcoins conference in New York City, one speaker in particular made a comment that caused the loudest round of applause in the entire conference when he said: “This country was founded on a separation of church and state.  I think we should also add separation of bank and state.”  It was Alan Safahi, founder and CEO of ZipZap, Inc., a San Francisco-based start-up that aims to revolutionize international money transfers around the world.

Alan has graciously accepted to talk about his company, his vision and the future of digital currencies.

Juan: Please tell us about your background and how you got involved with Bitcoin.

Alan: I am a serial entrepreneur with 28+ years of experience with several start-ups under my belt in technology, telecommunications and financial services.  I was an early adopter in the evolution of prepaid cards in the 1990s, so I have been part of the problem for the longest time!  I got involved with Bitcoin in 2010 and have since been a vocal supporter and activist of digital currencies. I currency sit on the Advisory Board Continue reading →