The authoritarian government in Turkey has charged three journalists working for Vice News for ‘engaging in terrorist activity’ on behalf of ISIL (ISIS). The charge according to the government is that one of the three journalists used encryption software on his personal computer which is often used by the ISIL. Also Read: Teaching Encryption Soon… View Article
The three-year veteran of the NYDFS was involved in the formation of the New York BitLicense, the controversial licensing regime for digital currency businesses seeking to serve consumers in the US state. The move is perhaps surprising given the originally skeptical outlook on the technology Alter voiced at the New York BitLicense hearings in early 2014.
At the two-day event, Alter was perhaps the most outspoken of NYDFS representatives on the potential downsides of digital currency regulation, arguing that the state’s money laundering obligations should take priority over innovation and that the decentralized payment network’s mining community represented a “systemic threat” to its operations.
In interview, Alter indicated that his opinion on the technology has since evolved as he became “incredibly fascinated” with developments in the field. Today, he finds that bitcoin and the blockchain could offer solutions for the very challenges it seemed to initially pose.
Alter told CoinDesk:
“At NYDFS, I had a special focus on anti-money laundering and economic sanctions enforcement. I thought [blockchain technology] had incredible applications and if it grows and is adopted more broadly could … reduce regulatory costs. There’s substantial time and effort that goes into compliance and this may provide an important answer to that problem.”
Alter framed his interest in a position at itBit as an extension of his interests in compliance and regulation.
“Over the months it came to pass I had this opportunity with itbit and thought this was a tremendous opportunity to pursue that,” he said.
As for any potential conflict of interest from the appointment, Alter stated his position that he did not participate in the granting of itBit’s New York banking charter. The approval, secured at the time of the company’s $25m Series A in May, grants itBit the ability to serve customers in 50 US states and to hold customer deposits.
The comments position Alter in contrast to former NYDFS superintendent Ben Lawsky, who has previously indicated that he is unable to work with bitcoin industry firms as a private consultant.
“I had no discussions about ever going to work with itBit, that didn’t come up until months after I left NYDFS,” Alter said. “My ethical requirements are defined by NY state law, and I’m sure there isn’t the conflict of interest for me that a superintendent would encounter.”
Alter’s appointment coincides with the hiring of CFO Kim Petry, who formerly served as president of global commercial and corporate card payment at American Express.
In regards to his new role at itBit, Alter indicated that he would play an “active role” in working with regulators as they seek to inform their positions on the technology.
“I understand the benefits of the platform and can accommodate their concerns, adjusting the business and the message of doing business in a way that will give regulators security that it is being done right,” he continued.
Alter suggested that within the next three to six months he will be working with itBit to develop strategic relationships with investors, while also attending to the company’s compliance efforts.
He further suggested that he would be uniquely suited toward helping others understand the potential of blockchain technology in financial transactions and settlement, while dissuading concerns similar to his own after first learning of the technology.
“Coming from where I come from, I have a sense of what those concerns are.”
At press time, the NYDFS had not responded to requests for comment.
New York image via Shutterstock
The California Senate Appropriations Committee has voted 6-1 to advance a bill that would create a licensing regime for bitcoin companies in the state.
The bill moved forward on 27th August, with Senator Jim Nielsen, a Republican from California’s Fourth District, casting the lone dissenting vote. The bill received a second reading on Monday, with a third reading set for a later date.
AB-1326’s movement through the California Senate – it passed the lower chamber in June – comes as groups supporting and opposing the measure spar over the law’s wording. The bill, introduced by Assemblyman Matt Dababneh in February, was amended earlier this summer to include a provisional regulatory on-ramp for nascent companies.
The latest version of the bill, amended as of 18th August, includes a passage that would add new reporting requirements to licensed businesses beyond existing language that mandates annual and quarterly financial audits.
The bill reads:
“Each licensee shall file an annual report with the commissioner, on or before the 15th day of March, providing the relevant information that the commissioner reasonably requires concerning the business and operations conducted by the licensee within the state during the preceding calendar year. Each licensee shall also make other special reports to the commissioner that may be required by the commissioner from time to time.”
New language was also added to a passage that outlined how the state would evaluate companies seeking provisional license.
“The bill would authorize the commissioner to request reports and documents, to examine the provisional licensee, and gather information regarding the business and operations of provisional licensees,” the text reads. “The bill would require reports and documents concerning the business and operations of provisional licensees to be kept confidential.”
If passed and signed into law, the bill would take effect on 1st July 2016.
The most recent version of AB-1326 can be found below.
Bitcoin has encountered a lot of friction with established banks and financial institutions in the past, as the idea of transacting using a cryptocurrency that is not backed by any asset seemed unviable. However, this notion could change now that Barclays announced that it just became the first major bank accepting bitcoin.
In fact, Barclays is set to be the first bank to accept bitcoin in the US, UK, and Europe. For now, the bank will only begin to accept the cryptocurrency from charities looking to transfer the funds to their bank accounts.
Road to Mainstream Bitcoin Acceptance?
This announcement marks a huge step for bitcoin when it comes to gaining mainstream acceptance. The cryptocurrency has also been struggling to gain traction now that regulators are stepping up their game when it comes to industry oversight, leading some startups to close shop or relocate.
In addition, the acceptance by a well-known bank could mean a lot for bitcoin credibility. A few years back, bitcoin has often been associated with criminal dealings, most notably for its wide use in the now defunct Silk Road underground market place in the Dark Web.
Other financial institutions have been more focused on the underlying technology or public ledger known as the blockchain. Banks such as UBS or Westpac have been exploring the potential applications of this distributed public ledger on their internal operations. Meanwhile, companies like Overstock have experimented with cryptosecurities or methods in which blockchain can be used to transform the trade settlement process.
Currently, Barclays has 75 staff at two of its research labs in London working on accepting bitcoin. The bank isn’t ready to deal with the currency directly, as it would with an exchange. So far, no company names have been disclosed yet, although Stockholm-based startup Safello seems like a possible candidate since Barclays made an investment in it last year.
In this morning’s analysis we noted that the bitcoin price has ranged throughout the majority of the week so far, and that – aside from a decline overnight on Sunday – we pretty much remained within the parameters we defined early Monday morning. We also highlighted the fact that during today’s session we would like to see some volatility from which we could get in or out of the markets according to our breakout position. Action has now matured throughout the day, and – while we did see some volatility – it did not come before we were stopped out of our trade. Having said this, we are now back into the trade, and we are looking long in the bitcoin price this evening. So, with all this said, what are the levels that were keeping an eye on tonight, and where will we be looking to exit the current trade? Take a quick look at the chart.
As you see, from support earlier this morning around 225.99 (what served as in term support during today’s European session) the bitcoin price traded upwards to break in term resistance at 229.16 midday. However, having closed just above this level, we quickly returned to trade back within range and took out our stop loss. Some tight trading in followed, and we are now trading back above in term support on another long entry towards a medium-term target of 232.49. We’ve got our stop loss set at 228 flat, giving us about a 2 to 1 risk reward profile on the trade. For those who are not yet in a trade, you could consider entering from what now serves as in term support at 229.162 towards our target (and this evening’s in term resistance) at 232.49.
Charts courtesy of Trading View
DigitalBTC, the Australia-based miner, has reported a first-year net loss of $6.77 million on annual mining revenue of $6.4 million, according to zdnet.com. The company nonetheless claims to be very bullish on bitcoin.
The company, which trades as Digital CC Limited on the Australian Securities Exchange (ASX), reported negative earnings before interest, tax, depreciation, and amortization (EBITDA) of $3.16 million for the full year ending June 2015.
Second Quarter Brought $1.2 Million Loss
In this year’s second quarterly report in late July, DigitalBTC reported $1.2 million in losses. Despite this, the company purchased a total of more than $29.6 million in bitcoins, with $10,116,000 of that being in the second quarter. The company designated the bitcoins for digitalX Direct, the company’s “flagship product” which launched at the end of last year. DigitalX Direct’s purpose is to provide liquidity to institutional users, such as merchants and bitcoin sellers. Previously much of their customer base had been bitcoin trading companies.
According to the second quarterly report, the company had cash reserves of $2.6 million in cash and $1 million in bitcoins.
Management Remains Bullish
In posting its first-year loss, management continues to tell shareholders that its results reflect a “strong performance from the company’s bitcoin operations.” It also claims to have made “significant progress” with AirPocket, an app-based cross currency cash remittance platform for Latin America. In May, CCN reported DigitalBTC raised $3.5 million to roll out AirPocket.
“Despite the unfavorable depreciation of the bitcoin price, I am pleased with the growth the company has achieved from its bitcoin trading and mining activities, which continue to provide strong revenue generation,” executive chairman Zhenya Tsvetnenko said in the most recent report.
We have made significant progress during the course of the year towards the development and commercialization (of AirPocket), with a number of agreements in place to accelerate the launch and consumer uptake of the product.
In the current financial year’s first quarter, management told shareholders that while the value of the cryptocurrency fell, the devaluation did not impact its performance.
“Investors should of course remember that movement in the bitcoin price has little bearing on the technology and the digital currency revolution, of which we are a leading participant,” Tsvetnenko said at the time.
Management Upbeat About DigitalX Direct
The company maintained a positive position about digitalX Direct in its second quarter report, stating:
During the quarter it achieved record sales revenues of $5.5 million (unaudited). This is a significant increase of 45% on the $3.8 million reported in Q1 2015. Since launching the product at the end of 2014 the product has seen steady growth in revenues. […] The customer base has also been shifting to retail bitcoin suppliers and away from professional trading companies, which has led to more consistent daily volumes and higher quarterly revenue.”´
DigitalBTC last year posted an underlying net profit after tax of $600,000 on revenue of $4 million and EBITDA of $2.5 million. While this was the last time the company was in positive territory, FY14 results were based on only a few months of operation. DigitalBTC listed officially in early June 2014 using a reverse takeover of Macro Energy, an investment firm.
Featured image from Shutterstock.
Bitcoin price is maintaining an east-bound course as we start counting weeks and not days in this nondescript pattern.
Bitcoin Price Analysis
Time of analysis: 15h32 UTC
OKCoin 15-Minute Chart
From the analysis pages of xbt.social, earlier today:
A quick glance at the 15-minute chart, above, shows the narrow price range and flat trading conditions.
One scenario, as discussed during the past week-and-a-half, is that price just keels over and continues downward. Another scenario that we should bear in mind can be found in the historic chart in late-February when price made a similar pattern and then advanced step-wise for almost a hundred dollar distance.
There is not much we can do other than keep the ascending and declining scenarios in mind for now. It does not seem likely that bitcoin is going to make a major move just yet – the market seems confused and pulled this way and that by indecision and uncertainty. We act on a signal when we see one – with more caution than eagerness to get in early. We want to be sure that downside is not just a dip prior to a launch.
Global markets are in a bad way and the warning signs that massive volatility is about to take hold of markets are appearing everywhere. In line with what is outlined in Fiat, Credit, Deflation & Bitcoin, keep your money in cash notes (not in the bank) and the general advice seems to be to get out of any equities, mutual funds and third party investments you may hold.
In a depression, he who loses the least wins the most. – Safe Wealth International
There is only patient waiting as the large institutional bitcoin players remain hands off and the smaller fish position long and short in a narrow range. Somethow, it seems, this time the impetus to move will come from global markets.
Bitfinex orderbook depth and Buy/Sell Volume:
What do readers think? Please comment below.
Readers can follow Bitcoin price analysis updates every day on CCN.LA. A Global Economic Outlook report is published every Monday.
The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.
Bitcoin price charts from TradingView.
Image from Shutterstock.
Bitcoin payments services startup Paymium has raised €1m in new seed funding from investors including Newfund and Kima Ventures.
Founded in 2011, Paris-based Paymium, while not a marquee name in its sector, has so far garnered notable partnerships with online fashion retailer Showroomprive – then the largest merchant in Europe – and point-of-sale solution provider Ingenico.
Despite the success in its home market, however, Paymium president and co-founder Pierre Noizat suggested the funding round was perhaps lower than it would have been if the company had been focused on the US market.
Noizat told CoinDesk:
“In the US, bitcoin awareness and venture capital funds are much more available. I think there is a tendency in the press to overestimate bitcoin awareness outside English speaking countries. There’s a lot to be done in Europe.”
Noizat said Paymium intends to spread awareness in major European economies by expanding its payment, exchange and application services to more regional markets.
As part of the expansion, Noizat said Paymium will likely grow its team to 12 members by the end of next year, up from eight today. Noizat added Paymium believes it’s too early to concentrate the efforts of these workers on one specific service, however.
“It’s hard to say which is our primary business, we don’t know yet whether bitcoin will be a mass market payment method for individuals or blockchain tech applications,” he continued. “We want to be full-service.”
The news comes amid an increasingly active time in the European bitcoin payments sector, following the 12th August announcement Denmark-based Coinify had acquired rival Coinzone.
By far the largest startups serving the European merchant market, however, are based in the US, with Coinbase and BitPay having both expanded to the market in the last year.
Still, Noizat said Paymium is interested in collaborating with these groups, and believes it will have a competitive advantage given it is headquartered in Europe.
“We feel good because the ground is very vast, tens of thousands of merchants have yet to adopt bitcoin, so we welcome big players pushing bitcoin to more merchants.”
Blockchain technology focused BTCS Inc. has announced the release of an interactive blockchain analysis toolset that will help in improving the public’s perception, and enhancing the knowledge of transaction verification services and other factors that influence the market and business at present.
The Bitcoin firm has put a transaction verification server simulator and also a calculator besides other blockchain network tools in this toolset.
In a statement issued to the media, Charles Allen, Chief Executive Officer of BTCS said that, “by offering a beta simulator and calculator we believe we can offer interested parties a glimpse into how the transaction verification services industry is analyzed and managed, removing some of the mystery which typically surrounds it.”
He further said that the toolset will help in providing the industry participants and other interested stakeholders a way to track and monitor transactions and activity on the blockchain.
Allen also claimed that the toolkit will help the ever-growing market as it will improve the knowledge base. He also mentioned that this enhanced knowledge will help alter the way global industries will conduct secure transactions in the future.
Considering that this U.S. public company is entirely focused on blockchain technologies, this move by it seems like a good bet.
BTCS was earlier in the news when it had announced that it has financed $2.3 million with board’s participation. In a press release, it had informed the public that it sold “7,708,342 units consisting of one share of common stock and 1.4 warrants at a per unit price of $0.30.” It also claimed that these warrants are “exercisable into an aggregate of 10,791,684 shares of common stock at a per share price of $0.375,” presumably its highest share value since inception.
Later the company was again in the news when in the latest SEC filing it informed that it had also incurred a $4.5 million loss.
Major banks and mainstream financial institutions are warming up to the blockchain technology that powers Bitcoin, and launching internal experiments and pilot projects to find out how they can use the blockchain.
However, most banks frown at the chaotic anarchy of public “permissionless ledgers” like the Bitcoin blockchain, where any individual anonymous user can join and contribute hashpower to verify transactions without having to ask anyone’s permission. Instead, they would prefer “permissioned ledgers” owned and by the banks, which can be operated only by vetted players. Think of “BankCoin” blockchains that only the banks and the authorities have access to.
Since this trend appears to be rising fast, many startups are developing infrastructures for permissioned ledgers.
SETL is a permissioned ledger system that aims to be as palatable to top-tier banks as possible, with a view to moving cash and assets immediately and achieving settlement finality of transactions, International Business Times reports. The brainchild of hedge-fund investor Anthony Culligan and Peter Randall, former CEO of leading equities market Chi-X Europe, the SETL blockchain system runs alongside and can be integrated into existing systems.
“If you make the assumption that the nodes are actually basically benevolent to each other, which they are, of course, if you have got identity attached to it, then the type of cryptography and, therefore, the time it takes gets a lot easier,” said Randall, who is persuaded that vetted identities and capacity within a blockchain system are usefully related. “[I]f you are not talking in the tens of thousands per second, and possibly hundreds of thousands per second, in terms of transactions for financial services globally, you are crazy.”
Following this logic, Randall sees a possible scenario where the major financial players operate their own private blockchains, “a UBS chain and a Deutsche Bank chain and a Morgan Stanley chain and a JP Morgan chain and so on.” But he is persuaded that the BankCoins would eventually have to become interoperable for global reach and increased efficiency.
SETL’s network would work in the same way as the bitcoin blockchain, generated from each participant’s server. The ledger of transactions would be stored on these servers, with encryption, but regulators or auditors would be given access to identify the parties involved. “We want to unlock the power of the blockchain for financial markets,” Randall said an interview as reported by Reuters. The technology will be regulator-friendly and “permissioned,” meaning that participants’ identities can be derived by regulators and auditors if required.
A similar position was recently formulated by two Accenture representatives.
“To be used by financial institutions, including capital markets firms and insurers, blockchains must supplant the costly methods introduced by bitcoin with a mechanism that guarantees security, privacy and speed without paying for anonymous consensus,” they said.
Bloomberg Business is running a profile of Blythe Masters, which is also the cover story in the October 2015 print edition of Bloomberg Markets. Masters, a financial superstar and a former JPMorgan executive, is the CEO of digital economy startup Digital Asset Holdings. In June, Digital Asset Holdings acquired Hyperledger, a company that developed distributed ledger technology to allow banks and other financial institutions to clear and settle transactions in real time. The company’s technology enables financial institutions to create multiple private blockchains across a known group of participants. Unlike other distributed ledgers, Hyperledger does not have an inbuilt cryptocurrency and uses a proven consensus algorithm capable of thousands of transactions per second.
Masters is persuaded that Hyperledger’s private, permissioned blockchain technology will permit developing “gated communities” where trusted users will be able to process transactions themselves rather than depend on the open bitcoin blockchain, which in her opinion is required for mainstream adoption. “With private chains, you can have a completely known universe of transaction processors,” Masters says. “That appeals to financial institutions that are wary of the bitcoin blockchain.”
The Bloomberg article notes that Masters is determined to make the financial system more efficient, using a technology that was initially designed to bypass the financial system – the technology of Bitcoin – without the troublesome openness and potential for privacy.
But it’s wise to bear in mind one simple fact – Bitcoin works. While closed, permissioned blockchains and BankCoins might theoretically work tomorrow, Bitcoin works in practice today, and perhaps the chaotic anarchy of the Bitcoin network is the very reason it works.