Čvc 21

Bitcoin Gaining Commercial Traction In India Through Bollywood and Online Portals

· July 21, 2017 · 4:30 pm

With the Indian government contemplating the regulation and legalization of Bitcoins, Bollywood celebrities are endorsing the digital currency which is now accepted by an ever-growing number of online portals and stores.


Bitcoin Legal Status in India

Although Bitcoin is not illegal in India, its jurisdiction falls under a gray area. An interdisciplinary committee comprising officials from the country’s finance ministry, IT ministry, NITI Aayog, and Reserve Bank was tasked with examining the framework on virtual currencies with a view to regulating and legalizing its use within 6 months.

Over 4000 comments and suggestions were received on the MyGov forum which was used to assess public opinion on digital currencies. Bitcoin trade analyst Chris Burniske reported that India is the fourth highest Bitcoin trading market, with over 1 million users accounting for 16,764.76 Bitcoins trades by volume.

The legalization of Bitcoin will expand its scope of usage in India and ameliorate the public fears regarding its reliability and safety. It will also provide a way for the government to monitor potential financial, security and legal risks since the use of Bitcoins has been associated with money laundering and funding terrorism in the country.

Bollywood Endorsement

Bollywood celebrities are always quick to capitalize wherever an opportunity for publicity arises. Just last month, Shah Rukh Khan and Nawazuddin Siddiqui were in the limelight for being the brand ambassadors of Webwork Trade Links, a company under probe by India’s Central Bureau of Investigation for allegedly duping investors for over $772 Million by running a Ponzi scheme that involved the use of Bitcoin.

Amit Bhardwaj, founder of GBMiners, AmazeMiners, CoinBank and former co-founder of HighKart.com is a self-proclaimed Bitcoin guru and has written three books on cryptocurrency. His latest book titled Cryptocurrency For Beginners has been promoted on Twitter by various Bollywood celebrities such as Shilpa Shetty, R. Madhavan, Prachi Desai, Bipasha Basu, Vir Das, Neha Dhupia and Nargis Fakhri to name a few.

This clearly looks like a coordinated campaign by the author to boost sales after he also bought a front-page advertisement in one of the biggest newspapers in the country, The Hindu. It is worth noting that although Bhardwaj has been accused of running a cryptocurrency scam and Ponzi scheme, Bollywood celebrities have wasted no time in jumping on the Bitcoin bandwagon through him. Bitcoin’s strong performance in 2017 has even caught the fascination of the technologically handicapped Indian film industry.

Online Portals And Stores Accepting Bitcoin Payments

Unocoin and Zebpay, two of India’s biggest Bitcoin exchanges, started out by providing users with the option to use the digital currency as a method of payment for mobile and DTH bills, as well as for online shopping. Over time, the list of merchants has grown to include several online portals that cover a wide spectrum of domains such as book stores, bus/flight ticket and holiday booking, mobile recharge, web hosting, software management, online clothes and home décor, and training and recruitment.

This week saw Cyankart.com become India’s first fashion and lifestyle store to accept Bitcoin payments on their website. Abhay Bajaj, one of the Founding Partners of Cyankart was quoted saying:

This is a big move for us. We believe the cryptocurrency movement is just starting to pick up the pace in India and it won’t be much time before we’ll start seeing people using Bitcoin as regularly as they use mobile wallets at the moment.

India has the potential to become a global leader in the Bitcoin market

The Road Ahead

In the absence of central regulation, Indian Bitcoin startups have formed the Digital Assets and Blockchain Foundation of India (DABFI) that will act as a self-regulatory body that brings in uniform rules. The founders of both Unocoin and Zebpay believe that India can become one of the global leaders for the Bitcoin market as demonstrated by the steep growth experienced by Indian Bitcoin startups in trade volume and user base, which is set to increase further.

Although Bitcoin has been the preferred choice of payment for hackers who recently launched a barrage of ransomware attacks that has been plaguing the IT sector, proper regulatory oversight by the government can go a long way in building public trust in the cryptocurrency and assuaging fears that stem from a lack of awareness regarding the technology and its benefits. For the world’s second most populated country with over 1.34 billion people, a Bitcoin user base of 1 million represents a mere drop in the bucket.

Taking Bitcoin mainstream would require promotion from the country’s most influential people who are in the public eye, namely cricketers and actors. Acceptance of the digital currency from the more popular retailers and stores would also go a long way towards widespread adoption, while at the same time truly fulfilling current Prime Minister Narendra Modi’s vision of a cashless India.

Do you think Bollywood endorsements can take Bitcoin mainstream in India? What line of products/services should start accepting payments in Bitcoin? Let us know in the comments below.


Images courtesy of the Bitcoinist archives

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Čvc 19

Convictions, Jail Time On The Rise In The U.S. For Selling Bitcoin

· July 19, 2017 · 3:30 pm

incidents of People are increasingly being arrested in the U.S. for selling Bitcoin via online sites such as localbitcoins.com.


With the recent surge in the public’s interest in Bitcoin and cryptocurrency as a whole, the United States government is sitting up and taking notice of something that many officials once dismissed as a passing fad. As a result, a disturbing trend has begun to emerge. Law enforcement agencies are arresting and charging people with a crime for selling Bitcoin in the U.S.

Bitcoin has yet to be given currency status in the U.S. and since lawmakers are still struggling to wrap their minds around the new technology, laws governing the buying and selling of Bitcoin are nebulous at best. While that may come as no surprise to many, it is worth familiarizing yourself with the laws that do exist should you wish to sell Bitcoin.

Selling Bitcoin as a Business

bitcoin money

While it is not illegal to buy and sell Bitcoin per se, four people have been arrested for exchanging the cryptocurrency for fiat. The charge? Operating a money transmission business without a license.

In May of this year, Jason Klein of Nixa, Missouri waived his right to a grand jury trial and plead guilty to the charge of “conducting an illegal money transmission business.” He was arrested after five separate instances of in-person transactions of cash for bitcoin with undercover federal agents. Transaction amounts ranged from $1,000 to $15,000.

Also in May, Detroit, Michigan resident Sal Mansy plead guilty to the charge of “operating an unlicensed money service business.” Between 2013 and 2015, it is estimated that Mansy bought and sold close to $2.5 million worth of bitcoin, the proceeds of which he funneled through a legitimate business that he owned.

Although the wording of the exact charge varies to some degree, the operative word in both is ‘business’. That is, the main marker of criminality seems to be whether or not an individual is selling Bitcoin as a business. The litmus test for whether or not it constitutes a business seems to be a combination of the frequency and volume of the transactions as well as to whom the individual is selling.

In a telephone interview with Motherboard, Marco Santori, a Palo Alto-based lawyer who specializes in Bitcoin, explained:

‘As a business’ is the qualifier that triggers the money transmission laws. […] If you come to me and ask to buy $100 worth of bitcoin and I sell that to you, in no state is that sole activity considered to be money transmission. It must occur in a sufficient frequency and volume and you have to accept all comers. It’s a fact-based test.

Selling Bitcoin as a business requires a license and consciously selling Bitcoin to someone whom you know to be a money launderer is a path to conviction. Two Arizona men found this out the hard way when undercover federal agents contacted them through localbitcoins.com and the officers told the men the funds they were using to buy with were illegally obtained. This was enough to arrest the pair, and not only charge them with unlicensed money transference but on money laundering charges as well.

Overturned Cases

Overturned Cases

Although convictions for selling Bitcoin illegally appear to be on the rise, the law is far from clear cut. Judges in several states disagree with the assessment that selling Bitcoin is illegal.

Last year in Florida, Miami-Dade Circuit Judge Teresa Mary Pooler ruled in the case of the State of Florida v. Michell Espinoza that since Bitcoin was not backed by any government or bank it could not be considered ‘money’. Espinoza had been arrested and charged with illegally transmitting and laundering $1,500 worth of Bitcoin, which he sold to undercover detectives who had informed him that they planned to use the money to buy stolen credit cards.

According to Judge Pooler’s ruling:

The court is not an expert in economics; however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it the equivalent of money.

She went on to further explain her decision:

This court is unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning.

Espinoza’s case was thrown out in a ruling that many experts in the Bitcoin community are hoping will “encourage the use of the virtual currency, and offer a roadmap to governments across the world that have struggled to understand and regulate it.”

Do you sell Bitcoin? How will recent rulings affect lawmakers’ decisions in future Bitcoin-related cases? Let us know in the comments below.


Images courtesy of Shutterstock, Wikimedia Commons

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Čvc 16

Mystery Ethereum Millionaire Has Regulators Fuming Over Cryptocurrency Anonymity

· July 16, 2017 · 1:00 pm

A man who can only be identified by his anonymous digital wallet address has renewed concerns that many regulators have over a new breed of cryptocurrency millionaires. How do they tax, and monitor illegal activities, of masked cryptocurrency users?


An Instagram post that sparked these concerns again read:

I get many private messages asking how much ether I have. […] One of the cool things about Ethereum is that all wallets around the world are transparent and open for everyone to see. And this is my wallet’s savings.

The figure that was visible in the post was $283 million, apparently made in less than a month with only $55 million of fiat currency. This is a 413 percent return that, while impressive, is also concerning to regulators for a few reasons.

An Environment for Criminality and Tax Evasion

As the mystery trader stated in his post, Ethereum, or indeed any digital currency wallet is totally transparent and visible to all, but it is also totally anonymous, something that is of huge concern for regulators.

Regulators would prefer an identity to be tied to digital wallets in order to enact taxation, but also to keep tabs on what the currencies are being spent, legal or otherwise.

The case of Ross Ulbricht, the man behind the nom de guerre Dread Pirate Roberts, the operator of the infamous Silk Road, remained an enigma to regulators and law enforcement while profiting through anonymous digital transactions made to his untraceable wallet.

Not All Cryptocurrency Activity Illegal

Not All Cryptocurrency Activity Illegal

It cannot be proven that this latest mystery millionaire has achieved his funds by any dubious means, especially considering that the month in which he quadrupled his money was one which saw Ethereum almost double its value going from about $220 to just touching $400.

Many regulators believe that a system of taxation on digital currencies will actually aid their stability, and ultimately, its growth.

According to draft legislation issued by the European Parliament in March:

That’s not to say that (this latest Ethereum millionaire) or any other entities are doing anything illegal. But opacity may be worsening jagged price movements. The value of ether, for example, rose from about $8 a unit at the start of the year to crest at $400 in June before settling. A lack of transparency could also be stifling the mainstreaming of online money.

The Tax Man Cometh

The Tax Man Cometh

Regulators would have many digital currency users believe that the anonymous nature of their coins of choice would stunt their ability to be taken seriously and adopted in a mass market. However, the original cryptocurrency, Bitcoin, has in its very DNA anonymity at its core and that very aspect is the reason many have flooded to cryptocurrencies in recent months.

Ironically, if regulators get their way (and it is likely that they will) and are able to pull the masks off of holders of digital currencies, they could wind up damaging the very assets that they are trying to tax. A break in anonymity for Ethereum users, for instance, would drive them towards cryptocurrencies that have better privacy, such as Zcash and Monero.

Escaping Digital Currencies' Dark Past

Escaping Digital Currencies’ Dark Past

While Bitcoin and several other coins that sprung up in its wake have mostly broken the shackles of their dark past, their links to the Dark Web and other nefarious activities are resulting in their being implicated in illegal acts even today.

Recent ransomware attacks on institutions as big as the National Health Service in the United Kingdom have seen demands for payment to be made in Bitcoin to the hacker for the release of sensitive information. It is the secret nature of these accounts, untraceable and anonymous, that is allowing hackers thrive on such a huge scale.

Would taxation on your digital coins drive you away from using them? Do you think governments and regulators need to stop the illegal use of digital currencies? Let us know in the comments below!


Images courtesy of Shutterstock, Wikimedia Commons

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Čvc 11

BTCC CEO Bobby Lee Warns That China Needs Bitcoin Regulation

· July 11, 2017 · 3:30 pm

The BTCC CEO Bobby Lee addresses the need for cryptocurrency regulation saying it could “run amok from society” if measures are not implemented.


In an interview with CNBC’s “Squawk Box”, Bobby Lee, CEO of BTCC, one of China’s primary cryptocurrency exchanges, explained that a well thought out regulatory approach is needed to address exactly where Bitcoin and the rest of cryptocurrency stands.

“I think regulation is much needed for this new asset class because otherwise, it’ll run amok from society,” warned Lee.

Bitcoin exchange CEO Bobby Lee

The challenge is how to craft the rules around this new technology, it’s taking the lawmakers and regulators some time to wrap their minds around it, and to come up with the appropriate rules and laws to govern companies, how we do business, to govern individuals (and) how people conduct business online.

One rule already in place requires that users must identify themselves on the exchanges, however, it will be interesting to see the wider connotations of any future Chinese cryptocurrency regulation.

The Peoples Bank of China is not Cracking Down on Bitcoin

People's Bank of China

Lee also played down the rumors that Peoples Bank of China was set on cracking down on the Bitcoin industry. The recent record-breaking rise in Bitcoin’s price happened to coincide with capital flight from the country which has been seen as the cause of the deflation of the Chinese Renminbi against the US Dollar.

There was a causation and correlation issue. People thought Bitcoin was causing it — but after studying it more, I think the central bank has realized that Bitcoin is not the cause of the change in exchange rate, nor is it the cause of the capital outflows.

It certainly seems as though BTCC China was not found to have played any significant role in capital flight, and it would appear as though it has, along with the wealth of other China-based exchanges, been seen as contributing positively to the Chinese economy.

Bitcoin is Dead, Long Live Bitcoin

Recent news reports of the People’s Bank of China visiting Bitcoin exchange offices was widely seen by some in the cryptocurrency community as yet another death knell for the currency. However, operations and Bitcoin withdrawals (not just RMB) soon resumed and no crackdown occurred.

Lee made the case that Bitcoin is very much a commodity that is actively traded in China, alluding also to China’s previous roaring trade with in-game virtual currencies as a comparison. It is a developing technology that needs room to breathe in order to reach its fullest potential.

It’s a new thing the central banks should pay attention to and figure out what the rules and regulations should be.

Is Bobby Lee right to call for an approach to cryptocurrency regulation? Tell us what you think the in the comments below.


Images courtesy of AdobeStock, Twitter

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Čvn 02

Russia Will Develop ‘Only Freely Tradeable’ National Cryptocurrency

· June 2, 2017 · 2:30 pm

Russia has confirmed it is developing its own bank-backed cryptocurrency amid mixed reports about its future status.


Central Bank VP: Cryptocurrency ‘Is The Future’

Various sources report that Central Bank senior vice-president Olga Skorobogatova, who was speaking at the St. Petersburg International Economic Forum 2017, confirmed lawmakers’ next move as part of Russia’s increasingly hands-on approach to cryptocurrency.

“Regulators of all countries agree that it’s time to develop national cryptocurrencies, this is the future,” local news agency TASS translated a forum speech.

Every country will decide on specific time frames. After our pilot projects we will understand what system we could use in our case for our national currency.

Sberbank’s ‘Russian Bitcoin’ To Get Special Treatment?

While TASS adds that Sberbank chief Herman Gref was “in favor” of developing a national cryptocurrency, elsewhere it appears his involvement was much more explicit.

An unofficial news feed on social media platform Telegram cites unmentioned sources stating Sberbank will form the “basis” of what it calls “Russian Bitcoin.” In addition, this will be “the only cryptocurrency freely buyable and sellable in Russia” upon its release.

“All the others will only be available through exchangers or exchanges,” it added in a post Friday.

No Ban, Only Bank-Style ‘Monitoring’

It is understood that Russian authorities will no longer seek to ban or compromise the use of Bitcoin or altcoins in future regulatory packages.

Reversing its former hostile stance towards so-called “surrogate currencies,” the focus regarding regulation now appears to be on limiting risks to consumers while allowing somewhat intense “monitoring” of transactions in non-ruble currencies within Russia’s borders.

Previous updates from the government have included a specific wish to have Bitcoin transactions observed to the same degree as banking transactions, despite the fact that instigating such a policy would likely prove exceedingly difficult.

“We’ll be able to be more exact about this issue in two to three years’ time, once we have best practices in place and will be in a position to share with you what form [cryptocurrency implementation in Russia] will take,” a further news portal RBC cites Skorobogatova as saying.

Explicit documentation regarding taxation of cryptocurrencies is meanwhile expected this month.

A number of Russian banks in addition to Sberbank have made positive statements about both Bitcoin and Blockchain technology in recent months, one even likening Bitcoin to “positive bacteria” similar to those found in probiotic yogurt.

What do you think about Russia’s plans to develop its own cryptocurrency? Let us know in the comments below!


Images courtesy of Shutterstock, Sberbank

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Kvě 31

India Could ‘Legalize’ Bitcoin Next As Public Calls for Regulation

· May 31, 2017 · 10:00 am

India could legalize Bitcoin in the near future as feedback from citizens and businesses appears to be in support of regulating virtual currencies.


India’s Gov’t Asks Public About Virtual Currencies

The online comments section, which is to run for 10 days, has already received nearly 4,000 submissions since it was launched on May 21st.

The areas polled are: whether Virtual Currencies (VCs) should be banned, regulated or observed? In case VCs are suggested to be regulated, then what measures should be taken to ensure consumer protection, promote development and also which institution should be monitoring and regulating them?

It goes on to also ask what would be effective self regulatory mechanisms, and the methods which should be adopted to ensure consumer protection in these scenarios.

Feedback From Citizens & Organizations

Most comments are brief, but they do represent a generally positive opinion of Bitcoin and virtual currencies in general with some encouraging everyone to profit via taxation.

For example, one person commented:

Bitcoin, Blockchain is the future of finance, administration, governance, markets, IT etc. This technology has huge potential for a growing country like India. India should follow Japan, embrace this technology without introducing road blocks. If India put regulatory burden on it, it will not limit the technology but will keep India isolated from its benefits. Like internet, tech will grow irrespective. We have choice to embrace, or be left behind..

Another person said that government regulation will help reduce corruption and black market trade as well as proving useful for the economy as a whole.

Tarkesh Tambulkar wrote: 

Bitcoin is the future of India, it is also increases the tax of Indian government. So it should be regulated

“Bitcoin regulatory should improve economical growth in India, crypto currency makes digital India to reduce poverty in future it will reduce corruption and black money if government takes action to make bitcoin is legal and regulated,” added Melika Rajarao

Multi Commodity Exchange of India Ltd also weighed in, commenting:

We propose that Bitcoin be accepted as legal financial instrument in India and the regulations be governed under a separate ‘Virtual Currency Act’. The adoption of virtual currency should be encouraged in India since Blockchain technologies are now considered to be the future of electronic financial transactions. A very strong impetus to legalize virtual currency is its potential to drastically reduce corruption, shrink transaction costs and eliminate third party involvement.

There are some dissenting voices too, who call for the currency to be banned outright.

“We must impose ban on all kind of cryptocurrency at the earliest. It should be made illegal Gready indians [sic] have already invested their hard earned money and they are going to lose their money very soon,” wrote Manish Rai.

Overall, the responses appear to be in favor of “legalizing” Bitcoin via regulation, with other commentators seeing it as beneficial to the technological growth of the country, as well as staying in line with international trends like in Japan.

9 of 10 New Internet Users Will Be Indian

It is important to also consider India’s unique position, and the type of citizen who would actually be commenting online. India is a developing country with much of its internet activity currently done in English, relating as much to infrastructural barriers as much as language ones. What’s more is many only connect via their mobile phones.

These issues were explored in a report conducted by the consulting firm KPMG India and Google exploring the use of the Internet in the country.

“80% of Indian language internet users face challenges in using English keyboards. About 55% of the users find the high cost and limited internet access as key barrier for using the Internet regularly,” the report states.

There is positive news though, as the country would seem to be overtaking China in terms of new internet adoption.

“In the last few years, the rapid scale of adoption of Internet across the country has set the ball rolling and today Indian language users have already overtaken the total number of English language users on the Internet in India,” the report notes.

The report forecasts that digital payments, online government services and e-tailing will see the fastest growth in adoption by Indian language users.

At the same time, Bitcoin appears to be spreading rapidly in India, which can be see by a constant rise in trading volumes and increasing merchant adoption throughout the country.

Bitcoinist has previously covered Bitcoins use as ‘digital gold’ in India here and how it is helping the population overcome the friction of the Indian Rupee.

Will India’s government go for regulating VC’s, maintain the status quo or attempt to ban Bitcoin? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter 

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Kvě 18

Bitcoin is Still Illegal in These 6 Countries

· May 18, 2017 · 9:30 am

As the Bitcoin revolution continues to spread throughout the world, there are still some places where buying or using Bitcoin is illegal and can get you in trouble.


Bitcoin Still Illegal in Some Countries

As Bitcoin’s popularity continues to grow throughout the world, some governments are beginning to realize its benefits and potential and are integrating Bitcoin and cryptocurrencies in their economy, rather than trying to punish those that use it with restrictive policies and exaggerated taxes.

Japan, for example, has recently passed a law that makes Bitcoin a legal form of online payment, removing taxes and setting up a regulatory framework for Bitcoin-based businesses. Australia has also taken a stance in favor of cryptocurrencies and removed the double-tax that was penalizing average Bitcoin users.

However, not all countries are as forward thinking especially when it comes to cryptocurrencies. Believe it or not, Bitcoin is still illegal in some countries, which says a lot about Bitcoin as a disruptive technology.

To be clear though, the world’s first decentralized cryptocurrency is not illegal because it poses any risk to the citizens of the countries we will list. Rather, it provides an alternative, open, P2P monetary system — and an exit for some  — which is seen as a threat to their centrally-controlled, legacy monetary system.

All of the countries listed below banned Bitcoin in 2014, following the Mt. Gox disaster. As Bitcoin begins to gain traction throughout the world, it’s possible that these countries may eventually change their stance on Bitcoin and digital currencies.

Vietnam

Although Bitcoin can be freely used by citizens, the State Bank of Vietnam issued a statement in February 2014 warning against the use of Bitcoin and prohibiting credit institutions to deal with the cryptocurrency.

The statement reads:

All bitcoin exchanges that allow users to trade anonymously, therefore, can be used to launder dirty money, sell drugs, hide from paying taxes, exchange and pay for illegal activities.

In December 2016, the government of Vietnam stated that it will consolidate cryptocurrency regulations as its current provisions “fall short.”

Iceland

Bitcoin’s legality in Iceland is not very clear. According to a statement issued in March 2014 by the Central Bank of Iceland, dealing with Bitcoin may violate the Icelandic Foreign Exchange Act, which specifies that Icelandic currency cannot leave the country and that foreign currency cannot be used in the country.

iceland

Bitcoin mining is legal in the country and so is transacting with Bitcoin, but apparently if those Bitcoins cannot be purchased from a foreign exchange or have to be mined in Iceland. This leaves a lot of room for questions. The statement reads:

There is no authorization to purchase foreign currency from financial institutions in Iceland or to transfer foreign currency across borders on the basis of transactions with virtual currency. For this reason alone, transactions with virtual currency are subject to restrictions in Iceland.

Bolivia

In May 2014, the country’s central bank, El Banco Central de Bolivia, officially banned any and all currencies not issued and/or regulated by the government, specifying Bitcoin, a few other altcoins and any other currencies that do not belong to a state or economic zone.

The statement reads:

It is illegal to use any kind of currency that is not issued and controlled by a government or an authorized entity.

Ecuador

Ecuador not only banned Bitcoin and all other cryptocurrencies, but it did so while establishing guidelines for the creation of their own virtual currency.

The National Assembly of Ecuador passed a bill that amends the country’s monetary laws in July 2014, banning cryptocurrencies and allowing the government to issue and transact in its asset-backed “electronic money.”

Kyrgyzstan

In Kyrgyzstan, using Bitcoin as a form of payment is illegal, although no law prohibits users from buying, selling and using. In August 2014, the National Bank of the Kyrgyz Republic, issued a statement in which it noted that the use of Bitcoin and other cryptos as a form of payment is illegal given that the only legal tender in the country is the country’s Kyrgystani Som (KGS).

The statement reads:

Under the legislation of the Kyrgyz Republic, the sole legal tender on the territory of our country is the national currency of Kyrgyzstan som. The use of ‘virtual currency’, bitcoins, in particular, as a means of payment in the Kyrgyz Republic, will be a violation of the law of our state.

Bangladesh

Bitcoin is not legal in Bangladesh. Transacting with any type of decentralized cryptocurrency can get you up to 12 years in jail and it has been so for almost three years.

In September 2014, the Bangladesh Bank issued a statement regarding the use of Bitcoin and warning that it is punishable by law. Bank officials said that anyone found guilty of dealing with Bitcoin or any other cryptocurrency could be jailed for up to 12 years under current anti-money laundering laws. The central bank went as far as to request citizens not to “spread information about it.”

The statement reads:

Bitcoin is not a legal tender of any country. Any transaction through bitcoin or any other cryptocurrency is a punishable offense.

Do you believe these countries will change their stance on Bitcoin and build a regulatory framework around it? Let us know in the comments.


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Dub 30

Mexico Central Bank ‘Experiments’ With Bitcoin, Hints At Regulation

· April 30, 2017 · 5:00 pm

Mexico’s central bank governor has said it has “experimented” with Bitcoin with a view to possible regulation.


Carstens: Bank Has ‘Tested’ Bitcoin

Quoted by local news source Sobre Bitcoin, Bank of Mexico governor Agustín Carstens confirmed “small amounts” had formed the basis of an investigatory push to understand how cryptocurrency works in practice.

“There have been learning efforts, [Bitcoin] has not been used in any instance to perform central banking operations, rather there have been experiments comprising very small amounts,” he said.

Bitcoin will no doubt have fallen onto regulators’ radar in recent months, with interest and usage having increased considerably since November’s US election.

A fall in the value of the peso and concern about remittances to the US, in particular, have contributed to a thriving Mexican Bitcoin economy, with trading resources such as Localbitcoins recording consistent increases.

Agustín Carstens

‘Slow But Sure’ Road To Understanding

Concerning the future, Carstens gave a nod to Bitcoin’s ability to improve “financial inclusion.”

“Obviously, the idea […] is to privilege technological financial innovation that serves to lower transaction costs and allow greater inclusion,” he stated, adding that full understanding of the technical issues presented by cryptocurrency was essential at first.

…We have to be 100% convinced that we understand all the facets of this change. It’s an issue where we’re going to get to slowly but surely.

Mexico’s official stance on regulation was rumored to be expanded after statements at a March conference suggested what rules should govern digital assets such as Bitcoin.

Crypto ‘Problems’ Are ‘Worrying Thing’

In common with many jurisdictions meanwhile, Mexico’s central bank head also warned of “problems” associated with security of funds in the hands of lay consumers.

“The worrying thing is that periodically there are technical, technological, hacking, theft problems, and that makes us very nervous,” he concluded. “We have to be fully assured of technological integrity, that we are well armored, and that there is not exposure for the public.”

Although it is unclear which dangers are Carstens is referring to, it is likely consumer understanding of the technology could leave a lot to be desired.

The “technical” and “technological” problems meanwhile may be linked to the ongoing scaling debate and recent slowdowns in transaction processing, along with rising fees.

What do you think about Agustín Carstens’ statements? Let us know in the comments below!


Images courtesy of AgustinCarstens.com, AdobeStock

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Take Two: SEC to Review Its Bitcoin ETF Decision

· April 26, 2017 · 9:00 am

The U.S. Securities and Exchange Commission has announced that it will review its decision regarding the Winklevoss twins’ Bitcoin ETF.


SEC to Review Its Bitcoin ETF Decision

The U.S. Securities and Exchange Commission (SEC) will review its decision regarding the rejection of the Bitcoin exchange-traded fund (ETF) proposed by Cameron and Tyler Winklevoss.

statement issued by the SEC in response to a petition for review of the Disapproval Order by the Bats BZX Exchange reads:

[…] it is hereby: ORDERED that the petition of BZX for review of the Division’s action to disapprove the proposed rule change by delegated authority be GRANTED; and It is further ORDERED that any party or other person may file a statement in support of or in opposition to the action made pursuant to delegated authority on or before May 15, 2017.

The SEC first rejected the Bitcoin ETF (COIN) proposed by the Winklevoss twins last month, citing risk of fraud and a lack of regulation in the Bitcoin markets. The statement in which the SEC rejected the COIN EFT reads:

As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

The petition filed by the Bats BZX Exchange will see the SEC’s action to disapprove the Bitcoin ETF reviewed and possibly amended. If so, COIN ETF shares would be traded on a public stock exchange, providing an easy way for investors to capitalize on the price of BTC without the need to deal with Bitcoin exchanges, wallets, private keys, and so forth.

Winklevoss Chose Bats Exchange For a Reason

As noted by Blockchain researcher and host of the Crypto Scam podcast, Tone Vays, ‎in a 2016 interview, it is very likely that the Winklevoss twins chose to work with the Bats BZX Exchange on the COIN ETF for this very reason. 

Vays

“My guess is the reason that they changed is that Bats is the new kid on the block, so they push the issues a bit,” Vays explained. 

Not only does it make sense for the Winklevoss twins to identify with the Bats BZX Exchange due to the “experimental” nature of the COIN ETF, but it is also a great strategic move that ensured the exchange they partnered with would help them fight to see the Bitcoin ETF approved.

Vays continued:

Nasdaq might not have been helping the Winklevoss fight against the SEC to get this approved and maybe Batz said ‘you know what, we’ll throw your lawyers at it’.

The Saga So Far

The Winklevoss’ bid to see a Bitcoin exchange-traded fund on public stock exchanges is a saga that has been going on for roughly three years. It started with the filling of an S-1 form for the Winklevoss Bitcoin Trust in May 2014.

Twins

The Winklevoss Bitcoin Trust was based on the twins’ substantial Bitcoin holdings (roughly 1% of the total supply at the time) and had Math-Based Asset Services LLC as the sponsor of the Trust. Later that year, a follow-up filling was made in order list the Winklevoss Bitcoin Trust as an ETF on the NASDAQ OMX exchange with the name “COIN.”

Two years later, in June 2016, the twins filed a document that would see the ETF listed on the Bats exchanged instead of Nasdaq. The same filing also saw the ETF offering increase from $20 to $65 million.

Last month, the Securities and Exchange Commission (SEC) denied the Winklevoss Twins’ Bitcoin ETF, which lead to the petition by the Batz BZX Exchange.

Do you think that the Winklevoss Bitcoin ETF will be approved after the SEC’s revision? If so, let us know why in the comments below.


Images courtesy of Shutterstock

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Dub 22

Florida Bill Aims To Add Virtual Currency To AML Statutes

· April 22, 2017 · 1:00 pm

An act designed to add virtual currencies to Florida’s anti-money laundering statutes has unanimously passed three state committees.


Bill Targets ‘Ill-Gotten Gains’ From ‘Internet-Based Currencies’

The bill, sponsored by republican Jose Felix Diaz, “makes sure that traffickers and fraudsters can no longer try to use internet-based currencies to hide and move their ill-gotten gains,” State Attorney Katherine Fernandez Rundle said in a statement quoted by local news resource Miami Herald.

Rundle added:

The high-tech criminals of the 21st Century use virtual currencies like bitcoin to accumulate and hide the profits of their illegal activities.

Bitcoin related crime

As the Herald notes, the legislation comes hot on the heels of the failed prosecution of Florida resident Michell Espinoza, who allegedly tried to sell $1,500 of bitcoins which were used to purchase stolen credit card information.

Despite his arrest after undercover law officers posed as traders on Localbitcoins, telling Espinoza they intended to use the funds for illicit purposes, a judge ultimately threw out his case as Bitcoin is not considered money under current Florida law.

“This court is unwilling to punish a man for selling his property to another when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning,” the ruling determined in July last year.

No Official Identity For Bitcoin In Florida

Fellow Republican Dorothy Hukill meanwhile announced in September that she was seeking official recognition of Bitcoin as a currency in the state, but no progress has yet been made.

The latest motion has ruffled feathers among local cryptocurrency advocates. Barry University economist Charles Evans explained to the Herald how it could send the wrong message.

Barry University economist Charles Evans

Florida legislators will be sending a very clear signal that financial innovation is not welcome here… No doubt, officials in China, Europe, Russia, Texas, and other places where Bitcoin is welcome will be pleased.

Others were less concerned, local lawyer Andrew Hinkes claiming authorities would still need to prove intent to use Bitcoin for illegal activities to entail a prosecution.

I don’t think it would affect the day-to-day users of bitcoin, or investors who hold bitcoin… but it might affect the business of those who exchange bitcoin for dollars. Now, assuming the facts support the intent required by law, the path to prosecution of traders for money laundering is clearer in Florida.

The bill is now awaiting its audition before a further state committee.

Virtual currency has faced a continued patchwork legal status across US states, with jurisdictions taking markedly different approaches to regulating it.

What do you think about Florida’s latest bill and Bitcoin’s status in the state? Let us know in the comments below!


Images courtesy of Shutterstock, Barry University

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