Srp 15

Industry Report: Big Bounty May Help Bitfinex Get its Money Back

Source: bitcoin

Industry Report: Big Bounty May Help Bitfinex Get its Money Back

A Bitfinex bounty, Russia changes its stance on bitcoin, and a rough fate lies ahead for an alleged Silk Road forum operator. Want to catch up on your latest digital currency news? Take a look below.

Also read: Industry Report: Bitfinex Forces Customers to Pay for Hack Losses


Hong Kong exchange Bitfinex has announced a $3.5 million bounty reserved for anyone who can help in their investigation to uncover the $72 million stolen from customer wallets last week. Explaining the terms, Director of Community and Product Development Zane Tackett states:

“5% of recovery and for information leading to recovery (but no bounty if no recovery); if multiple persons lead to recovery, share pro rata.”

Tackett is also refusing to draw up a contract offering explicit details until he can consult with the rest of the team.

In a related story, a bitcoin miner at Hashocean seems to have disappeared with millions of dollars in investors’ money. The website is down, reporting an error message when visited, and the miner has left no trace. Users are working hard to find the truth and earn their funds back.


After years of saying, “We hate bitcoin,” Russia is reversing its stance on the digital currency and potentially revoking its plan to penalize users. In the past, Russian authorities have sworn to enforce fines and even hand out prison time for those who indulge in the art of cryptocurrency, but now the country seems to be having a change of heart. Rather, financial experts have suggested taxing bitcoin over penalizing it. Sources explain:

“Resident natural persons are obliged to provide reports to tax authorities located at the place of their registration as to account moves through banks beyond the Russian Federation pursuant to the procedures established by the Decree of the Government of the Russian Federation No. 1365 dated 12.12.2015.”

While nothing has been set in stone, the idea is that if tax-hounds get their way, criminalizing bitcoin will have to be put on hold or discarded fully. Obviously, authorities can’t have it both ways.


28-year-old Irishman Gary Davis is set to be extradited and sent back to the U.S. for questioning regarding his alleged role with Silk Road. He has been charged with conspiracy to distribute illicit drugs, computer espionage, and money laundering.

According to the FBI, Davis worked as a Silk Road forum operator under the name “Libertas,” and had a personal relationship with Ross Ulbricht. David denies all allegations and is looking to appeal his case to the High Court. He explains:

“The prospect of being torn from my support network here in Ireland, which is essential for my mental well-being, flown halfway across the world, and being dumped into an American Gulag to rot while facing outrageous charges is gut-wrenching in the extreme. The conditions in the Metropolitan Correctional Center, New York, where I would be held post-extradition and pre-trial, are deplorable.”

Know of any stories that belong in our regular industry report pieces? Post your comments below!

Images courtesy of, IrishTimes.

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Industry Report: Big Bounty May Help Bitfinex Get its Money Back

Čvc 02

Industry Report: How China, France, and the FBI Do Bitcoin

Source: bitcoin

Bitcoin Industry Report

China loves digital currency, France wants to fight it, and the FBI doesn’t know how to handle it. Want to catch up on your latest digital currency news? Check out the stories below.

Also read: Industry Report: Bitcoin Thieves Abound As Popularity Skyrockets


China has proposed a new civil law that recognizes the people’s right to own virtual assets. This includes bitcoin and additional cryptocurrencies.

The civil code was introduced in the National People’s Congress on June 27 and states that all virtual and physical financial entities possess equal status. In other words, you can own bitcoin, and you can own yuan. Either way, they’re both money and they’ve both been created for the same purposes.

OKCoin founder Star Xu was enthusiastic about the law, stating:

“Since the Chinese laws have not clearly defined the virtual asset in the past, property disputes involving ‘virtual commodities’ are difficult to be resolved under the existing law. This proposed new civil law draft, which includes digital assets with legal rights, will contribute to the protection of such property rights while also establishing a framework for the development of future specific rules.”


Despite the light in China, there’s a dark sky hovering over Paris. Bernard Debre of the National Assembly of France wants to place a ban on bitcoin in the city of Paris, fearing its use will lead to online drug purchases. Debre believes drug trafficking is at an all-time high. He’s also aiming to shut down “La Maison du Bitcoin” (the house of bitcoin), a bitcoin-advocacy organization operated by Ledger.

Following the terrorist attacks of last year, Debre is hard on his stance, and proposing that the country takes a legislative approach towards stopping anything that could further criminal activity.


Three years have gone by since the original Silk Road went offline. Ross Ulbricht is behind bars, and yet this story hasn’t come to a definite close.

Gary Davis, allegedly known as “Libertas” on the darknet market, is presently fighting his extradition to the U.S. He will not be charged for his involvement in Silk Road if he’s successful in his process.

Back in 2013, Microsoft was issued a warrant when the DOJ wanted to investigate a particular Outlook account belonging to Gary Davis. The case to which the investigation pertained was never revealed to Microsoft, and the company is now seeking legal assistance regarding what they say was a “breach of privacy.”

The case is in the hands of the US Court of Appeals and is likely to set new precedents for the technology industry. The outcome should be decided in July, and Microsoft is receiving support from several technology companies ranging from Apple to Cisco and AT&T.

Know of any stories worthy of being included in our regular industry reports? Post your thoughts and comments below!

Image courtesy of Alexandre Beaudry blog.

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Industry Report: How China, France, and the FBI Do Bitcoin

Kvě 22

Industry Report: Bitcoin Is Still on Drugs, No Detox in Sight

Source: bitcoin

Bitcoin Industry Report

Coinbase undergoes some changes, Bitcoin can’t break it’s drug habit, and Silk Road has a heart of gold. Here’s what you might have missed in this week’s cryptocurrency news:

Also read: Industry Report: Bitcoin Hears Thunder, Ethereum’s Biggest Crowdsale, Kaspersky Kills Crime


Bitcoin exchange Coinbase is changing its name to Global Digital Asset Exchange (GDAX) after announcing support for Ether trading on its platform. Why is Ether suddenly all the rage? Recently, Ethereum has launched the world’s largest crowdfunding campaign for its new DAO project, which is being hyped as the ultimate way to allocate capital. The campaign has managed to raise over $150 million USD, and everyone wants a piece of the action. Coinbase is now aiming to accommodate the growing list of financial institutions eager to trade Ether and bitcoin, respectively.

Ether has been a long-time rival of bitcoin, and now it’s finally earning its big moment in the spotlight. Vice-president of business development at Coinbase Adam White stated confidently:

“We’re very excited about Ethereum. There has been a ton of progress made in the last six to nine months… We have seen hundreds of emerging decentralized apps (applications launched on Ethereum… What’s powerful about ethereum is that I can write self-executing contracts, and I can run them on Ethereum, and it’s not on any central server or computer.”


ESU student Michael Mancini is spending time behind bars following accusations that he used the dark web to purchase LSD with bitcoin and later sell his drug stash to friends and roommates.

Bitcoin’s reputation has long been tainted by its use in illicit activities. Despite the fall of the original Silk Road and its successors, the sale of drugs and firearms via the deep web hasn’t shown many signs of slowing down.

Things ultimately took a downward turn for Mancini when an informant told ESU police of the drug deals that were allegedly taking place on school grounds. It is believed that Mancini purchased the LSD at $9 a hit, and kept some for himself before dealing the rest to assorted colleagues. One too many orders led to suspicion among authorities, who upon inspecting the contents of the student’s latest delivery, proceeded to arrest Mancini for purported drug trafficking.


In what appears to be an effort to go “clean and sober,” Silk Road 3.0 has returned after a period of non-use and announced a charity drive set for June 8th, 2016. Approximately $5 from every sale will be donated to the Last Door Recovery Society, a drug and alcohol treatment center based in Vancouver. While the site will not necessarily be used for legal services, the owners are attempting to set people in the right direction and encourage “responsible use” among those who engage in “mind-altering substances.”

Additionally, those behind the charity’s operation have stated that they will be donating from their own pockets in an attempt to increase funds and promote bitcoin usage. All the while, the owners aim to silence suspicious parties by stating they are worried less about making money and more about ensuring user privacy.

Know of any good stories that should be included in our next industry report? Tell us about them below!

Images courtesy of YouTube,,

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Industry Report: Bitcoin Is Still on Drugs, No Detox in Sight

Bře 30

Charlie Shrem Went To Jail One Year Ago Today

Source: bitcoin

Charlie Shrem Went To Jail One Year Ago Today

One year ago today, former BitInstant CEO and early Bitcoin proponent Charlie Shrem began serving his two-year prison sentence. The former CEO of BitInstant, a popular Bitcoin exchange in the early days of Bitcoin, was arrested at JFK airport in January 2014. He was just 24 year old.

Also Read: Synthetic Cannabis Proliferates On The Dark Web

$1 Million In Laundered Bitcoins

Later convicted of abetting more than $1 million in bitcoin sales to Silk Road users, and also cited as a Silk Road user himself, Shrem faced a detailed case against him. He was charged alongside Robert Faiella, who was known as BTCKing on the Silk Road.

“Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way,” DEA agent James Hunt stated.

When arrested, Shrem was the Vice Chairman of the Bitcoin Foundation, which proved a big scandal for the beleaguered and rebranding Foundation. BitInstant, backed by the Winklevoss twins, was offline at the time.

Shrem, who worked as both Chief Executive Officer and Compliance Officer, was charged with operating an unlicensed money transmitting business (as was Faiella); failing to file suspicious activity reports, thusly in violation of the Bank Secrecy Act.

“As alleged, Robert Faiella and Charlie Shrem schemed to sell over $1 million in Bitcoins to criminals bent on trafficking narcotics on the dark web drug site, Silk Road.” Manhattan U.S. Attorney Preet Bharara stated. “Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act. We will aggressively pursue those who would coopt new forms of currency for illicit purposes.”

IRS Special-Agent-in-Charge Toni Weirauch said: “The government has been successful in swiftly identifying those responsible for the design and operation of the ‘Silk Road’ website, as well as those who helped ‘Silk Road’ customers conduct their illegal transactions by facilitating the conversion of their dollars into Bitcoins. This is yet another example of the New York Organized Crime Drug Enforcement Strike Force’s proficiency in applying financial investigative resources to the fight against illegal drugs.”

The complaint stated that Shrem knew Faiella’s business was on the Silk Road, and knew what the Silk Road was, and had even been a user. Shrem, never shy, often spoke of alcohol and marijuana use: “I won’t hire you unless I drink with you or smoke weed with you—that’s a 100 percent fact,” Shrem once told a reporter for Vocativ.

Charlie Shrem: Bitcoin’s First Felon

The charge of one count of conspiracy to commit money laundering carries a maximum sentence 20 year prison sentence, including the count of operating an unlicensed money transmitting business, a maximum five year prison sentence. Shrem also was charged with the willful failure to file a suspicious activity report, a maximum sentence of five years in prison; overall, he faced thirty years in prison. He received two years, a term he was “content” with and considered a “relatively short sentence.”

On March 25, 2015, five days before reporting to prison, Shrem published a blog called “So, I’m going to prison. Reflection from Bitcoins’ first felon.” He wrote:

“On March 30th, I’ll be self surrendering to Lewisburg Federal Prison Camp in Pennsylvania. It’s been a long hard fight, from getting arrested at JFK airport while landing home, to solitary confinement and being under house arrest the for the past 14 months. When the government indicted me and requested 30 years, I kept my head up with the help of friends, family, and the Bitcoin community. While some distanced themselves, most stood by and fought. I owe my life to those people. Of course I don’t look for sympathy, I did the crime and I will do the time. They say those who stand by you in the bad times, deserve to be with you in the good times. Good times are coming and I look forward to it. I also want to thank those select few in the SDNY District Court and NYSPT for treating me with dignity and respect.”

Its could very well be Shrem is released before his full two years is up, if he’s been on good behavior, which I am sure he has been. Shrem’s arrest came at a time when the War on Drugs is seemingly dwindling. The ambiguity of laundered funds, however, touches a nerve with the American public as it can be associated with terrorism, and likely would make most juries skirmish.

What Shrem plans on doing once he’s out of prison has yet to be seen. The Winklevoss twins, who had invested in BitInstant, publicly separated themselves from Shrem after the arrest. When he comes out, he will be entering into a Bitcoin industry that is much transformed from just one year ago, namely as a result of the entrance of some of the world’s largest financial institutions and technology multinationals into the space.

What do you think about Charlie Shrem’s prison sentence? Let us know in the comments below!

Images courtesy of 

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Charlie Shrem Went To Jail One Year Ago Today

Úno 23 Releases Rare Ross Ulbricht Home Video

Source: bitcoin Releases Rare Ross Ulbricht Home Video

The website has changed its look and has recently added a never before seen 2-minute film of Ross Ulbricht at his home in Austin. The defense of Ulbricht has recently appealed the double life sentence given to the Silk Road creator. The 170-page motion shows that there was significant corruption in the investigation, and it claims Ross did not receive a fair trial. The new website is showing the rare home video of Ulbricht and also contains a new contest to help fund the appeal.

Also read: Linux Mint Backdoor Puts Users and Bitcoin Miners at Risk

Never-Before-Seen Home Video of Ross Ulbricht Released

The new website has a lot to offer supporters of the Ulbricht family and this very topical case. Visitors can get a description of who Ross was and an in-depth background to his life. There is updates on the case and the federal appeal within its pages. The website also has a section containing 100 written letters from supporters, family members, and friends of Ross Ulbricht. Now with its recent additions the organization has released video footage of Ross taken in Austin 4 months before his arrest. also has added another section on the website with a new game called The Trial I Saw, created by Ross. They say it was inspired by a dream he had, and it will be used towards funding the appeal. The result of the dream-inspired creation ended up being a unique drawing of how Ross saw the trial from his perspective. For one dollar visitors can purchase a square of the picture and each piece will depict the artwork created in prison. says people can also leave a personalized message on each square bought.

With each square of the art purchased 21 random winners will be chosen to receive one gram of gold from the precious metals dealer Roberts & Roberts Brokerage. Purchasers must provide a valid email address and acquire at least one square to enter. The team says, “as the drawing is revealed, see if you can identify all eight characters! Post your guesses on Twitter and Facebook, be sure to tag @FreeRoss”. Roberts & Roberts has been an active supporter of the Ross Ulbricht family and is pleased to take part in changing the precedent. The precious metals dealer is also known for accepting Bitcoin for its gold and silver sales explaining on its website, “We don’t feed the banks.”

The organization says that it is “so grateful” for all the support given to Ross thus far, but the fight is not over. The announcement states, “pre-purchase a poster of the artwork, or bid in an auction on the framed original in the FreeRoss.orgstore. 100% of proceeds go to fund Ross’ appeal and fight precedent that will imperil digital privacy, personal privacy, and Internet freedom.” Squares are available for purchase now, and the website says to make sure to check back as the drawing winners will be announced.

What do you think about the current Ross Ulbricht appeal? Let us know in the comments below.

Images courtesy of the Ulbricht family, Roberts & Roberts Brokerage, and Shutterstock

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Úno 01

Synthetic Cannabis Proliferates On The Dark Web

Source: bitcoin

Synthetic Cannabis

Weed and mushrooms aren’t the only drugs you can get on the dark web with Bitcoin. According to the Irish Mirror, teenagers are using the digital currency to buy so-called synthetic cannabis — known popularly as Spice — on online dark web marketplaces. Children as young as 14 are purchasing the “legal highs,” which are not against the law in the UK and other countries. Many users of legal highs — in the US, UK and elsewhere — have become very sick, sometimes even brain damaged,  due to smoking the synthetic marijuana. 

Also Read: Crawling The Deep Web For Art

Synthetic Cannabis: A Legal High

The legal drugs are meant to affect users similar to cocaine and marijuana. Use of these products has resulted in many medical emergencies around the globe. 

“The prevalence would have come to the attention of gardai from concerned parents. It was a pattern of behaviour within the family home,” Supt Jimmy Coen told the Irish Mirror. “Parents came to us with their concerns. It was all focussed as part of the operation.”

Teenagers have learned they can order legal highs online and have them delivered to their front door. The issue with legal highs is that, the world over, people have become sick and even mentally handicapped by the substance. A €3 bag of synthetic cannabis in late 2013 killed  one person in the UK.

The part of synthetic cannabis that mimics marijuana is sprayed on using artificial cannabinoid families such as AM-xxx, HU-xxx, JWH-xxx, CP xx.  These are sprayed on herbs and sold as “natural highs” under brands like K2 and Spice all over the globe.

Synthetic cannabis first appeared on the market in the early 2000s, and laboratory data demonstrated that synthetic cannabinoids function similarly to THC, and are used to avoid cannabis laws. Many European countries have made spice illegal.

In April 2015, the New York Times released a report in which spice was blamed for a spike in emergency room visits.

“We had one hospital in the Baton Rouge area that saw over 110 cases in February. That’s a huge spike,” Dr. said Mark Ryan, the director of the Louisiana Poison Center.

“There’s a large amount of use going on. When one of these new ingredients — something that’s more potent and gives a bigger high — is released and gets into distribution, it can cause these more extreme effects.” Government officials are not 100% confident they will be able to get spice off the street.

“Is it frustrating? Yes, but when you’re in this business what you come to understand is that total eradication of a drug threat just isn’t going to happen,” said Keith Brown, the special agent in charge of the D.E.A.’s New Orleans field division, which covers Alabama, Arkansas, Louisiana and Mississippi. “Until we can control the demand there’s going to be someone with supply.”

Mr. Brown went on: “We had success last year, and now it’s coming back. It’s like a guy who tends a garden or tends a yard. It’s impossible to eradicate weeds. They come back. They grow again.” The synthetic cannabis is responsible for many emergency room visits in recent years. 

“It’s been more than 90 percent hospitals this year,” Mr. Ryan said. “It’s not, ‘Hey, I smoked this thing and I don’t feel well.’ It’s, ‘This guy’s trying to tear up the E.R. and we have him locked down in restraints. We don’t know what he’s taken. What do we do?’ ”

Dark web marketplaces made headlines across the world when the Silk Road was first reported, largely in Australia, to provide people with an assortment of drugs in the same manner as the legal highs have been distributed.

Ross Ulbricht, the founder of Silk Road, oversaw an anonymous marketplace where millions in drugs were distributed across the globe. He was arrested in San Francisco and charged.

What do you think about being able to get synthetic marijuana on the dark net? Let us know in the comments below!

Featured image courtesy of US News


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Synthetic Cannabis Proliferates On The Dark Web

Led 16

Carl Force’s Lawyer is Pessimistic about Ulbricht’s Appeal

Source: bitcoin

Carl Force’s Lawyer is Pessimistic about Ulbricht’s Appeal

As Ross Ulbricht seeks a new trial, citing the actions of federal agents Carl Mark Force IV and Shaun Bridges, a lawyer close to the case does not see much hope for the convicted Silk Road administrator. 

Also read: Bitcoinist Giveaway: Win a Free Ticket to TNABC 2016

Ulbricht Appeal will Likely be Unsuccessful

Artist rendition shows Ross William Ulbricht in Federal Court in San Francisco

Sentenced to life in prison in May 2015, Ulbricht was found guilty of narcotics trafficking, money laundering and computer hacking charges.

Ivan bates, the lawyer for Carl Mark Force IV, does not believe the actions of his client during the Silk Road investigation means Ulbricht will be freed.

“I don’t really see the major implications for Ross Ulbricht,” he said. “It’s just one of those situations. I know how the government tends to do their cases, they build their evidence well. There was probably more evidence than what’s even known.” Bates sympathizes with Force, who he believes had too much on his plate during the course of the Silk Road investigation.

“One of the things I talked about in court is you see a man that has given so much for his country and his family,” he said. “One of the issues we have to understand is mental health issues are very real. Carl’s issues basically played such a major role in what happened to him.” The government knew about Force’s past, yet still put him in a very stressful situation.

“I feel the government also played a role in terms of not properly placing him in a position for him to be successful in terms of his mental health issues,” Bates said. “The criminal justice system looks the other way when it comes to mental health issues.” Force faced his own trial, and will serve six-and-a-half years in prison. In some ways, this was a relief.

“One of the things we’re happy about is their recommendation that Carl would go to a hospital on the federal side to deal with his mental issues so he can get those under control and move on with his family,” he said. “But, that was merely the recommendation of the court. You’d have to speak with the Bureau of Prisons to truly answer that.” According to Bates, Force was a remorseful individual.

He was struggling with his own issues and it was very sad to me, because you could tell that he had been in a number of positions in his career that caused a great deal of stress and I wish they had paid more attention to him,” the lawyer said. “You don’t just forget these individuals when you put them in stressful situations, because you never know how it will affect their mental health.”

What do you think about this lawyer’s thoughts on Ulbricht’s appeal? Let us know in the comments below!


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Carl Force’s Lawyer is Pessimistic about Ulbricht’s Appeal