Sunday, May 10, 2015
Canadian Brick-and-Mortar Store Bitcoin Brains Secures 10-Year, $2.1M Deal with BitNational
Shares Of Bitcoin Investment Trust Surge After Much Anticipated Debut
Weekend Roundup: Israel Is a Bitcoin 'Forerunner,' Peter Todd Responds to BitGo's Patenting Dispute
Patriot Act Reform: A Small Victory Against the Government’s Surveillance Distraction
GetDotBit Has Registered Over 700 Decentralized .Bit Domain Names, and Counting
Saturday, May 9, 2015
Mycelium Gear Offers Merchants Direct, No-Fee Payment Processing
Mycelium has announced the launch of a new merchant processor, Mycelium Gear. Merchants can now receive payments directly into a Mycelium or Electrum wallet free of charge by installing a payment widget on their website or by integrating its open-source API into their backend.
In Friday’s announcement on r/Bitcoin, Mycelium Community Manager Dmitry Murashchik states, “Mycelium Gear is a merchant processor which demonstrates something that has never been possible before Bitcoin: the ability for merchants to use a full featured merchant processor to receive payments online, and have the money go straight into their own wallets, even if that wallet is running on their own phone in their pocket.”
According to Murashchik, Gear “generates invoices with unique addresses for every customer, automatically calculates the exchange rate, and sends a payment confirmation to the site’s shopping cart software. Basically, instead of coding a basic thing from scratch on your own, you can use advanced shopping cart software that tracks customers, invoices, addresses, revenues, etc., and add this little plugin to it to allow it to process bitcoin transactions too.”
Gear is built on top of the open-source Straight Server payment processor, originally developed by Roman Snitko in 2014. “It turned out [Mycelium] wanted to build the exact same thing and were looking for people capable of doing that,” said Snitko in an email to Bitcoin Magazine. “They liked that the project was open source and already the most important parts were functioning. So we decided to join our forces on this one.”
Straight Server uses the BIP32 protocol to generate a new bitcoin payment address for each customer order. As a result, merchants are able to receive payments directly from customers without Mycelium ever touching the funds. Once the payment is sent, Gear is able to track it through the Bitcoin blockchain. This capability is the pivotal feature of Gear: it is a tool that watches the blockchain and detects new transactions at the addresses associated with its clients.
From there, Gear offers the same features as most other payment processors: webhooks that notify your website of the transaction, automatic currency conversion, and notification of over- and underpayments. A notable exception to this common ground is that Gear bypasses traditional payout structures associated with other payment processors. Funds are transferred instantly and directly into merchant wallets.
In the comments following the original Reddit post, Murashchik points out that it is also possible to integrate Mycelium Gear with a Trezor hardware wallet, with Ledger support “coming soon.” It is also useful for sites that accept donations in bitcoin.
At the moment, prices can be set in USD and EUR. Bitcoin prices are automatically adjusted based on the price of bitcoin at the time of purchase. Gear has plans to introduce fast EUR withdrawals in the EU in the near future.
“What’s important to emphasize is that there are two things to supporting currencies: setting prices and conversion of received funds,” Snitko explains. “The first one is easier and we plan to introduce many different currencies in a relatively short period of time. The second one is more complicated due to all the regulatory problems and also the fact that by design Mycelium Gear doesn’t touch the merchants money and thus has no ability to convert them at this point.”
Mycelium Gear adds to its trustless, hands-off approach to payment processing by eliminating personal information gathering, approvals, and KYC/AML requirements. According to the company website, “Because Gear doesn’t hold or even touch the money, we don’t need to know any intrusive information about the merchants.”
“Mycelium’s hope is that Gear will encourage even more merchants to adopt bitcoin and completely change the way merchant transactions are done,” Murashchik adds, “thus continuing our goal of decentralizing everything, improving privacy, and eliminating unnecessary third parties in the Bitcoin economy.”
Suril Desai: ‘If the Industry Does It Right, Not Much Regulation Should Be Needed’
France to Tighten Regulations for Financial Instruments ‘Including Cryptocurrencies’
Inflation, Negative Interest Rates and the ‘New Normal’
Jaded Satoshis: An Interview with Kristov Atlas
Friday, May 8, 2015
Andresen Proposes Block Increase, Leading to ‘Very Important Debate’
Post FinCEN Penalties, Ripple Labs Adapts and Moves On
The digital currency company Ripple Labs has adapted in response to recent penalties and fines by FinCEN for reportedly “willful violations” of the Bank Secrecy Act. As industry analysts have pointed out, since the violations, the company has drastically increased its anti-money laundering (AML) efforts. But this might just be the beginning of more strict regulatory actions against digital currency companies.
Regulators shut down previous digital currency businesses that violated financial regulations such as Bitinstant, but Ripple Labs has escaped this fate. Many have attributed this to the company’s proactive and aggressive measures to comply with regulations since the 2013 guidelines for digital currency companies published by FinCEN and its willingness to work with regulatory agencies.
“[A]s the government has recognized in today’s agreement, Ripple Labs has cooperated extensively with the government during its investigation and has taken a number of important steps over the years to build and strengthen our compliance programs,” reads a statement by Ripple Labs spokeswoman, Monica Long. “These measures include: registering a subsidiary, XRP II, LLC, as a money service business to handle XRP sales for the company in 2013, in response to and in an attempt to comply with the March 2013 Guidance by FinCEN; hiring a chief compliance officer in January 2014, a general counsel, and a BSA officer in February 2015; and continuously enhancing an anti-money laundering program,”
Banking Partners Are Committed
“Ripple is infrastructure technology for banks to build compliant payment networks. The settlement announced today does not impede our ability to execute on those bank integrations. We’re continuing to focus on working towards an Internet of Value,” said Ripple Labs in a public statement.
Bitcoin Magazine reached out to several banks and financial institutions that are in discussions or partnerships with Ripple Labs to see if the recent penalties have affected their relationship with the digital currency company. Though none were very forthcoming, no one said they are ending their partnership the digital currency company based on the settlement.
Matthias Kröner, co-founder and CEO of Fidor Community Bank, an innovative European Bank which ha partnered with Ripple for international transfers, suggested the bank’s relationship with Ripple hasn’t changed since the FinCEN penalties but wasn’t willing to discuss the matter in detail.
“If we would see a problem with one of our partners, we for sure would discuss such a question confidentially with those partners,” Kröner said.
A similar answer was given by Kristin Kelly, director of global corporate communications at Western Union, who said the global remittance company still stands by their comments made earlier this month. According to those comments, Western Union is in preliminary discussions with Ripple Labs to launch a pilot settlement program.
“Now it looks like Ripple addressed the issues and paid the fine and are moving forward, and that is how it usually works when a bank or a casino or another money-service business is involved,” said vice president for payments and cybersecurity at the American Bankers Association, Steve Kenneally, in interview with American Banker. The fact that the process is working like it would with any other company could work in Ripple’s favor, he said.
Ripple May Be Clear, but Other Bitcoin Companies Could Be Next
For a long time, just like Ripple Labs, Bitcoin companies operated in a sort of financial ‘Wild West’. It was uncertain where these new category of companies fit within the law and current financial regulations. Only recently have digital currency companies received guidance from regulatory agencies on the matter, although some uncertainty still exists.
Carol Van Cleef, co-chair of the global payments practice group at the law firm Manatt, Phelps & Phillips, told American Banker that early Bitcoin companies might face similar penalties for prior regulatory sins.
“FinCEN clearly has the intention to hold entities responsible from the time they flip the switch to turn on their business model. Compliance is expected from the beginning; they make a big point of the fact that [Ripple Labs] was operating for a period of time without being properly registered as an MSB,” she said. “FinCEN is only beginning its enforcement examination process of MSBs in the digital currency space; as with any industry in the first round of compliance examinations, we’re likely to see a number of companies being cited for compliance shortcomings.”
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