Bitcoin Plaza

Wednesday, May 27, 2015

Ex-Investment Bank CCO Joins Bitcoin Exchange Kraken To Prepare For US Expansion

Bitcoin exchange Kraken has announced that financial compliance veteran Howard Bernstein has joined the company as chief compliance officer as the trading platform looks to expand to the United States.

Bernstein, who has more than 20 years of experience in American financial regulations, constructed the entire anti-money laundering program of the publicly traded investment bank Merriman Capital, Inc. He also helped Merriman comply with SEC and FINRA requirements. Much like the current state of Bitcoin regulations, the compliance requirements for the SEC and FINRA were new and very unclear at the time.

According to a Kraken blog post, Bernstein will help manage the company’s day-to-day compliance program and begin to engage regulatory officials and lawmakers. But the new CCO also marks a change of heart for the exchange about the U.S. market, a country Kraken doesn’t operate in, but which contributes greatly to bitcoin’s trading volume.

The San Francisco-based exchange previously swore off the U.S. market, having said that the country’s regulations were too nascent to know what they needed to comply with. Kraken instead focused its efforts on Europe and Japan, which it found to have simpler financial regulations.

Bernstein will now led the exchange’s efforts to get a U.S. banking partner and necessary financial licenses so the trading platform can operate in the country.

“We are working toward being able to operate legally in the United States,” Kraken CEO and founder Jesse Powell told Bitcoin Magazine. “Unlike most other services, we’ve chosen to stay out of the U.S. until we have the necessary licenses, which has put us at a substantial competitive disadvantage. We’re looking forward to entering our home market.”

He added that the new CCO is also re-evaluating Kraken’s existing compliance programs in Japan and Europe.

“We plan to better localize our compliance efforts and adjust to a more customized risk-based model, as opposed to the generalized policy we have now, which might in some cases be too strict, and in other cases not strict enough,” Powell said.

Image via Kraken.

3 Bitcoin Podcasts Featuring Industry Leaders

With the news of SoundCloud’s integration with Changetip, it only makes sense that there is a surge in appeal toward Bitcoin news and analysis podcasts.

While constantly refreshing the most popular Bitcoin news sites is addictive to some, it does not always capture the true passion behind digital currency enthusiasts because they lack one thing podcasts have: a passionate voice. Whether you’re traveling on a WiFi-free flight, or waiting for the next price change, the Bitcoin podcasts below are sure to satiate your appetite.

Decentralize.fm
Bitcoin Magazine had the chance to speak to Decentralize.fm’s Tony Sakish, who spoke about how they
“did not want to be a podcast exclusively about Bitcoin, as there are plenty of those.” This led to Decentralize taking a different route and really covering other things that are related, but that do not exclusively involve Bitcoin. Topics range from decentralization of education, to virtual worlds and politics related to everything crypto.

Run by Eric Martindale (Bitpay), James Walpole (Bitpay), Tony Sakish (Augur) and Chaz Ferguson, Decentralize.fm started eight months ago with their first guest, country singer Shooter Jennings, who talked about cryptocurrency as well as decentralization in music.

Their latest episode is with Ryan X. Charles, former astrophysicist, veteran of BitPay and Reddit, and current software engineer at BitGo. Ryan comments on BitGo’s Innovators Patent Agreement which has recently created a stir.

Their unbiased approach toward Bitcoin adds a new flavor to podcasting about the digital currency, an example being their interview with Steve Albini, who’s produced records for Nirvana, The Pixies, PJ Harvey, Cheap Trick and many others. Albini’s take on Bitcoin might not be positive, but is a refreshing one nonetheless.

Trace Mayer’s Bitcoin Knowledge Podcast
Considered a Bitcoin legend by many, Trace Mayer is most renowned for being one of digital currency’s earliest adopters, while the market cap was still less than $2 million, Mayer had already helped fund Armory, Bitpay & Kraken.

His podcasts usually span 15 to 30 minutes and are updated as often as once every three days. One of his most popular podcasts is his interview with Erik Voorhees, author of Money & State, and current CEO of Shapeshift.io.

Other notable mentions are his interviews with Kraken CEO Jesse Powell, and more recently with Roger Ver, who funded big names such as Blockchain.info & Coinlab.com.

Let’s Talk Bitcoin
Boasting more than 9,000 community members, Let’s Talk Bitcoin (LTB) prides itself on being more than just a podcast. Episodes are uploaded almost every day, and have been consistently covering all aspects of cryptographically secured money since April 2013. The website has numerous hosts and sub-shows, and content is largely volunteer-based. Dubbed as an “an experimental community platform,” the LTB network is “home to many ACTs (Autonomous Content Teams) who create what they want and when they want, according to their own rules.”

The network’s podcasts ideas range from breaking news to interviews and even satire. Popular episodes include the interview with founder of Bitinstant Charlie Shrem and Andreas M. Antonopolous’s episode about his book Mastering Bitcoin.

Citi Persuaded that Digital Money is Inevitable, Encourages U.K. Government to Create its Own

In March, after receiving more than 120 replies to a call for information on digital currencies, the U.K. government released a Treasury document titled “Digital Currencies: Response to the Call for Information,” which summarizes the submissions received and outlines the government’s views and proposed next steps. In particular, the government is launching a £10 million (U.S. $14.6 million) research initiative on digital currencies.

One of the replies to the U.K. government call for information came from the global bank Citi. The bank is persuaded that digital money adoption is inevitable, and the U.K. government should consider issuing its own digital money, Finextra reports. The full text of the Citi document was obtained by CoinDesk via a Freedom of Information request.

Headquartered in Manhattan, Citi is an American multinational banking and financial services corporation. As of January 2015, it is the third-largest bank holding company in the United States by assets and has one of the world’s largest financial services networks.

“Due to the potential benefits, we believe the adoption of Digital Money is inevitable,” notes the Citi document. “While we believe that the use of Digital Money is certain, the future of specific cryptocurrencies such as Bitcoin is less clear.”

The wording shows that Citi agrees with the growing persuasion, in the financial and regulatory sectors, that the promising blockchain technology will eventually have to be adapted to non-Bitcoin blockchains with different features, more appealing to the financial mainstream.

Recently the Bank of England itself called for further research to devise a system that could use distributed ledger technology without compromising a central bank’s ability to control its currency. Similar ideas were discussed at a research workshop organized by the European Commission.

“The greatest benefits of digital currencies can be realized through the government issuing a digital form of legal tender,” notes the Citi document. “This currency would be less expensive, more efficient, and provide greater transparency than current physical legal tender or electronic methods.”

Citi recommends that the U.K. government work together with regulators in other nations to establish a common platform, if possible, within the framework of existing regulations and laws.

“The decision by a government to issue its own digital money would resolve the majority of national AML, KYC and sanctions concerns,” adds the Citi document. “Clearly this creates possible privacy concerns on the side of the citizen, but it could be offset by the additional value digital money provides.”

The idea of a government-sponsored digital currency has been around for quite some time. In February, David Andolfatto, vice president of the Federal Reserve Bank of St. Louis, wrote a blog post about “Fedcoin: On the Desirability of a Government Cryptocurrency.” Similarly, Greece’s Finance Minister Yanis Varoufakis envisaged some kind of “Eurocoin” for Europe, especially for financially troubled economies such as Greece’s.

One thing is certain: Governments and established financial institutions risk obsolescence if they don’t act soon.

“We believe that Governments and the Financial Industry incumbents are not currently leveraging the benefits of emerging technologies and risk similar challenges to that of the Post Office during the shift to digital forms of communication,” warns Citi.

Photo Uris / CC BY-SA 3.0

One Coin, Much Scam: OneCoin Exposed as Global MLM Ponzi Scheme

OneCoin, a purported cryptocurrency and trading venture based out of Bulgaria, is suspected to be a pyramid scheme with no verifiable evidence to back up any of its business claims.

13 FinTech Unicorns: The Industry Disrupters That Are Worth Billions

With currently 108 unicorns worldwide, the billion-dollar valuation club is nowhere near getting smaller.

MAY 27 DIGEST: Block Chain Summit Kicks Off on Richard Branson's Private Island, Xapo Announces Advisory Board

The Block Chain Summit kicks off at Branson’s private island, Xapo announces its advisory board, BitQuick.co integrates Clef's 'passwordless' authentication system, a new Bitcoin center in the capital

SimbaPay CEO, Nyasinga Onyancha: ‘It Makes Sense to Have a Presence in Nigeria’

SimbaPay is a remittance service provider headquartered in London that enables Africans in UK to send money from their bank accounts back home fast, cheaply and securely.

Tuesday, May 26, 2015

North Carolina Bill will be ‘Amended’ To Make BTC Businesses Comply

A bill placed before the North Carolina Senate could see the Old North State implement mandatory licensing for companies operating with digital currency.

Bitcoin Has Empowered Over 50,000 Women and Counting

Interview with the Founder & President of BitCharities and Bitlanders, Francesco Rulli

BitSent Expands its Fleet of Bitcoin ATMs to British Columbia’s Simon Fraser University

One of Canada’s first companies to launch Bitcoin ATMs across the country is expanding its fleet of Lamassu-brand ATMs to Vancouver, British Columbia’s Simon Fraser campus bookstores in Vancouver, Surrey and Burnaby.

BitSent now has Bitcoin ATMs in 11 locations across the country and is looking to expand internationally in 2015.

While other Bitcoin companies are experimenting with newer technology such as QuadrigaCX’s SumoPro Bitcoin ATMs, BitSent has chosen to stick with the Lamassu model despite some hiccups in the operation and maintenance of the earlier models.

Their Simon Fraser Bookstore locations will also be the first university bookstore to accept bitcoin as payment for books and other products carried in their stores. Mike Yenug, the founder of the Simon Frazer University bitcoin club, expressed his excitement to Bitcoin Magazine. “As the founder of SFU’s Bitcoin club I’m proud that SFU has the first university administered bookstore in the world to take Bitcoin for purchases.”

Silicon Valley North – Waterloo Innovation Triangle

BitSent is one of the new pioneering high-tech companies thriving in Ontario, Canada’s innovation triangle just west and north of Toronto.

Also known as “Canada’s Technology Triangle” the area is a hotbed of new and future tech startups and includes the towns of Waterloo, Kitchener and Cambridge.

The best-known member of this network is BlackBerry, but the area also includes development offices of established companies such as Microsoft, Google and Oracle.

The region is home to close to 1,000 companies that generate about $30 billion in annual revenues. In addition to BlackBerry, the Waterloo area has launched hundreds of successful tech startups, including OpenText, Christie Digital, COMDEV International and Clearpath Robotics.

Photo Soggybread / CC BY-SA 3.0

Nasdaq to Push Forward with Blockchain Applications

On May 11, the leading stock exchange Nasdaq announced that it would begin experimenting with the blockchain technology that powers Bitcoin. The Wall Street Journal reported that Nasdaq will start with a pilot project in Nasdaq Private Market, a recently launched marketplace that handles pre-IPO trading among private companies.

“Utilizing the blockchain is a natural digital evolution for managing physical securities,” said Nasdaq CEO Bob Greifeld in the announcement. Speaking with The Financial Times, Greifeld noted that he wants Nasdaq to be “a leader in the field.” He added that the network could potentially revolutionize the time it takes to finalize deals on U.S. securities markets.

“I am a big believer in the ability of blockchain technology to effect fundamental change in the infrastructure of the financial services industry,” said Greifeld. “Clearinghouses are a wonderful invention, but if you have a public ledger that is trusted, you can evolve back to a bilateral (trading) world but proceed with instantaneous settlement. We currently settle at T+3 [within 3 days]. Why not settle in 5-10 minutes?”

The Financial Times notes that shortening settlement times for trading could reduce the risk that counterparties would not be paid, while also cutting the amount of collateral, or insurance, used to back trades. For the Nasdaq Private Market, using the blockchain means transforming the recording of transactions from paper certificates and spreadsheets to an audited record of the lineage of ownership of private securities.

The Financial Times’ article includes a video with explanations about Bitcoin and the blockchain. The video notes that everyone from banks to stock exchanges and Silicon Valley technologists are starting to make bets on Bitcoin companies.

David Birch, Director of Consult Hyperion, a specialist electronic transactions consulting firm that advises governments and large companies on electronic identity and electronic money, believes that the real value of Bitcoin is independent of the highly volatile exchange rate of the bitcoin currency.

“I think when you see people investing in Bitcoin, it sounds like they are investing in the currency,” Birch says in The Financial Times video. “But I think you’ll find they are not really. The institutional money that is going in, is going into the underlying technology, not the payment instrument itself. So, investing in Bitcoin doesn’t really mean investing in bitcoin. It means investing in what they call the blockchain technology, which is the new technology that sits underneath Bitcoin.”

Birch acknowledges the importance of bitcoin price as a means to incentivize end-users to participate in keeping the Bitcoin blockchain going, but he is persuaded that “in the long run, that is unsustainable.” He notes that the Bitcoin blockchain is not the only blockchain, but there are other blockchains and other ways of incentivizing people to maintain blockchains.

It appears that Birch agrees with the growing persuasion, in the financial and regulatory sectors, that the promising blockchain technology will eventually have to be adapted to non-Bitcoin blockchains with different features, more appealing to the financial mainstream. In a recent research paper titled “One Bank Research Agenda,” the Bank of England called for further research to devise a system that could use distributed ledger technology without compromising a central bank’s ability to control its currency.

Nasdaq isn’t planning to develop an alternative blockchain. Rather, it plans to leverage the colored coin protocol Open Assets, which works on the original Bitcoin blockchain.

Photo bifshadow / Flickr

Bitcoin Gains Traction amid Steady Growth in Indonesia

Indonesia, one of the world’s most beautiful archipelagoes and travel destinations, has had a consistent increase in bitcoin adoption at popular tourist spots including Bali, Jakarta and Denpasar, since the launch of BitIslands in March 2014.

Initiated by the largest Indonesian Bitcoin exchange Bitcoin Indonesia, the project was sponsored by leading Bitcoin merchant platforms and mobile services in Asia, including a Singaporean startup Coin of Sale, Artabit, CoinPip, Quantified, Tukarcash and Bitwyre. Since 2014, Bitcoin Indonesia continued to aggressively push the project in Bali, where BitIslands launched a bitcoin Information Center and Bali’s first offline Bitcoin exchange.

Due to the increase of bitcoin’s market awareness and merchant adoption, the majority of the locals started to use bitcoin online, and began to appreciate bitcoin’s low transaction fees and speed, The Wall Street Journal reports.

“Most Indonesians currently use bitcoin to pay for services online, such as web hosting. They can also use the digital currency to book hotel rooms through travel websites hosted overseas rather than use credit cards, which only a small percentage of the population currently own,” the Journal article says.

Furthermore, major bitcoin exchanges such as Bitcoin Indonesia have seen a substantial growth in both the number of users and daily trading volumes. The largest bitcoin exchange in Indonesia currently trades around 200 bitcoin daily and supports more than 56,000 users.

“Many people think that Bitcoin is unheard of in Indonesia, but the fact is its popularity is soaring now,” Bitcoin Indonesia CEO Oscar Darmawan said.

In September 2014, several projects emerged to increase bitcoin mainstream adoption in the nation, by allowing Indonesian residents to purchase bitcoin at popular stores or tourist spots. The project ran by Bitcoin Indonesia enabled users of its exchange to purchase bitcoin at any of the 10,000 Indomarket convenience stores via a partnership with iPaymu, a merchant payment platform.

Such services, along with the rising volume of Bitcoin exchanges, influenced Indonesian merchants to accept bitcoin in other parts of Indonesia apart from Bali, where most of the Bitcoin projects began. Currently, Indonesia has more than 50 Bitcoin merchants, and the majority are located in Denpasar.

Rise of Bitcoin Startups

Since early 2015, some Bitcoin startups began to relocate to Indonesia, targeting the poor banking systems and payment infrastructure of the country. One of the startups was Blossom, which recently moved from San Francisco to Indonesia to offer the country’s first bitcoin-based global lending/investing platform.

Blossom connects international investors to small businesses in Indonesia which are ready to launch. Through an established local microfinance institution, Blossom delivers the bitcoin funds to the businesses. After 12 months, profits from the businesses are collected to be distributed to the investors, with around 7.5 percent to 12.5 percent in return.

“In conventional investment, I have to rely on the statements and numbers publicized by my partners. With Bitcoin, it’s clear to everyone what’s going on,” said founder Matthew Martin.

As the number of bitcoin merchants and trading volumes continue to grow at a consistent rate, Bitcoin startups and establishments, including Bitcoin Indonesia, aim to achieve mainstream bitcoin adoption in popular tourist spots in the country.