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Digital currency seemed received Uncle Sam's attention... Is it prominent enough for new law?

Fears grow that virtual money could aid criminals

ALBANY (New York) — New York is trying to corral the “Wild West” atmosphere of virtual currencies such as Bitcoin and may create new regulations to keep the growing technology from being used in crimes.

Financial Services Superintendent Benjamin Lawsky’s inquiry is confirmed in a memo provided to The Associated Press yesterday (Aug 13).

“We have seen instances where the cloak of anonymity provided by virtual currencies has helped support dangerous criminal activity, such as drug smuggling, money laundering, gun running and child pornography,” Mr Lawsky wrote in the memo dated yesterday. He described virtual currencies as a “Wild West” for criminals that could threaten national security.

http://www.todayonline.com/tech/fears-gr...-criminals

Bitcoin is catching serious attention...

Germany moves to tax virtual Bitcoin currency

LONDON — Germany’s ministry of finance has formally recognised the digital currency Bitcoin as a “unit of account” which can be used for private transactions - meaning that the ministry will now be able to tax users or creators of the four-year-old virtual money.

However, companies wanting to use it for commercial transactions would need permission from the Federal Financial Supervision Authority.

The Frankfurter Allgemeine newspaper reported on the decision, which follows scrutiny of Bitcoin’s potential usefulness as digital money.

Bitcoin is an online token which can be used and exchanged for goods and services in the same way as standard currencies.

However, it has no issuing bank; each is the solution to a complex mathematical problem. Transactions are carried out by transferring a unique number within the Bitcoin network from one electronic “wallet” - on a computer or phone - to another.

Each of the 10m Bitcoins in existence is presently worth about $117. New coins are “mined” by setting computers to find new solutions to the maths problem.

While not putting Bitcoins on the same footing as formal currencies such as the pound or dollar, Germany’s move does mean that people who have speculated in the online cryptocurrency could be liable for capital gains taxes if they sell them less than a year after acquiring them.

People who have held on to them for longer will not be liable, the ministry told German MP Frank Schaeffler, who raised the question with the ministry. German authorities are trying to work out how - or whether - they could determine taxes due on Bitcoin transactions between individuals.

One key problem would be identifying when users have carried out such transactions, given that Bitcoin wallets are effectively anonymous.

http://www.todayonline.com/business/germ...n-currency

I am surprise Bitcoin has been promoted in Singapore, base on an article in The Edge and The Straits Times recently.

I am still having hard time figuring out the "value" of Bitcoin for investment. There is a warning from MAS on Bitcoin.

Bitcoin users beware: MAS

SINGAPORE - The Monetary Authority of Singapore (MAS) is cautioning consumers against bitcoin trading even as a few merchants in Singapore have started accepting the digital currency as payment for physical goods.

Invented in 2009, bitcoin is the world's most well-known digital currency. It is not issued or managed by a single company or monetary authority.

Bitcoins can be bought through online exchanges that convert real money into the virtual currency. Due to its anonymous nature, bitcoin trading was declared illegal in Thailand in July over money laundering concerns.

On Singapore's sole bitcoin exchange FYB-SG, more than $440,000 worth of bitcoins have been transacted since it started operating in January this year. One bitcoin was sold for about $167.83 on Thursday.

An MAS spokesman told The Straits Times that consumers should be wary of such trading.

"If bitcoin ceases to operate, there may not be an identifiable party responsible for refunding their monies or for them to seek recourse," the spokesman said.

Like other virtual currencies, such as game credits and airline miles, MAS does not regulate bitcoin trading.

MAS' warning comes even as a handful of merchants here, such as cafes, have started to accept bitcoins for goods like beer and coffee.
Merchants said they profit from not paying any transaction fee and from a potential rise in the exchange rate.

Mr Chad Samson, 30, owner of Cad Cafe at Haji Lane, said: "It does not make sense for a small business like mine to pay the high credit card transaction fees."

But Mr Prashant Somosundram, 33, owner of cafe Artistry at Jalan Pinang, acknowledged the element of risk. "As my transaction volumes are still small, I'm willing to write off my investments," he said.

Artistry had about 30 bitcoin transactions worth a total of $300 since mid-July, when it started taking in bitcoins. Its value has risen by about one-third, which works out to a profit of $100.

itham@sph.com.sg

http://business.asiaone.com/news/bitcoin...beware-mas

the advantage and disadvantage of bitcoin is anonymity. You can buy and sell and also pay people anonymously totally untraceable. The dark side of it is there's a lot of scams in this hidden world because it's unregulated nobody can police it.

http://www.forbes.com/sites/andygreenber...oberts-qa/

took me a while before I found out how to get into the "silkroad" to browse it's forbidden wares.

if you haven't gone in and looked at silk road, it's too late, it's now gone. The FBI has finally nabbed someone traced to be the owner of the hidden site.

eventually due to natural laws of supply and demand I think somebody else will build a new one.

http://money.cnn.com/2013/10/02/technolo...?hpt=hp_t3


[Image: 131002124814-silk-road-site-shut-down-620xa.png]

This bitcoin is getting popular in Europe, than in US, due to "monitoring" of agencies...

First bitcoin ATM opens in Vancouver

VANCOUVER — A silver and blue ATM, perched up next to the espresso bar in a trendy Vancouver coffee shop yesterday (Oct 29), could launch a new era for the digital currency bitcoin, offering an almost instant way to exchange the world’s leading virtual money for cash.

The value of a bitcoin soared from US$13 (S$16) in January to a high of US$266 in April as more businesses and consumers used them to buy and sell online. Some investors are also treating bitcoins like gold, using them to hedge against currency fluctuations and speculating on their rise.

The kiosk, which looks like the average ATM but with hand and barcode scanners, opened for business yesterday and by mid-morning people were lined up to swap their bitcoins for cash, or to deposit cash to buy more bitcoins.

“It’s as easy as walking up to a machine, scanning your hand, entering some cash and buying bitcoin,” said Mr Jordan Kelley, chief executive of Las Vegas-based Robocoin, the company that builds the ATMs. “With this, it’s a two-minute process. For any online exchange, it’s at least two days.”

Bitcoins, currently worth about US$210 each, can be transferred without going through banks or clearing houses, thereby cutting fees. Users can buy products and services online or in a handful of stores, including the Waves coffee shop where the ATM is.

With the bitcoin ATM, users scan their hand to confirm identity, then funds move to or from a virtual wallet on their smartphone. The system limits transfers to US$1,000 a day, in an effort to curb money laundering and other fraud.

Bitcoiniacs, the local dealer that operates the ATM, will roll out four other kiosks across Canada in December. Robocoin said Canada was the ideal place to launch the kiosk due to a critical mass of users and less stringent oversight than in the United States, where the bitcoin trade is monitored by anti-money laundering regulators.

“We think the Vancouver market is enormous and we’re excited to be here,” said Mr Kelley. “By the end 2013, we’ll be all over Canada. By the end of 2014, we’ll be all over the world, including the United States.”

Bitcoin is not a recognised currency in Canada, so Ottawa’s anti-money laundering watchdog, the Financial Transactions and Reports Analysis Centre, does not monitor its trade.

Still Bitcoiniacs’ founders say they are working with the agency to be ready for when Canada does start regulating them.

“We’re already being proactive in our business,” said Bitcoiniacs cofounder Mitchell Demeter. “We abide by any guidelines they would impose — which includes the ‘know you customer’ laws and anti-money laundering laws.”
...
http://www.todayonline.com/business/firs...-vancouver

Well, I do understand how Bitcoin works, but I am not able to access the risks involved, till the following article...

‘Miners’ could devastate Bitcoin

LONDON — The Bitcoin virtual currency is vulnerable to an attack that could allow a group of “miners” to take control of the entire system, said a new report.

The success of the currency is predicated on the fact that it is decentralised and functions without the intermediation of any central authority. The calculations required to authenticate transactions are completed using a network of private computers. The operators of these computers, known as “miners”, are rewarded with transaction fees and newly minted Bitcoins.

Computer scientists at Cornell University have discovered a way for a group of miners to obtain more than their fair share of revenues and grow in number until they control more than 50 per cent of Bitcoin’s processing power. When this point is reached, the Bitcoin value proposition collapses, said the researchers.

“The currency comes under the control of a single entity; it is no longer decentralised; the controlling entity can determine who participates in mining and which transactions are (made), and can even roll back transactions at will,” researchers Ittay Eyal and Emin Gun Sirer wrote in a blog post.
...
http://www.todayonline.com/tech/miners-c...te-bitcoin

Interesting progress for Bitcoin...

Bitcoin surges to new high ahead of US government hearing

NEW YORK] Bitcoin surged over 27 per cent to a new high of US$675 on Monday ahead of a US government hearing on possible regulation of the digital currency.

While not an official seal of approval, the hearing is giving some legitimacy to a payment mechanism that has been associated with illegal activities even as it gains acceptance by the general public and investment community.

Witnesses at the Senate Homeland Security Committee hearing include officials from the Secret Service and Financial Crimes Enforcement Network and the Justice Department's Criminal Division. "The government is taking a very thoughtful and balanced approach to bitcoin and bitcoin regulation," said Barry Silbert, founder of the Bitcoin Investment Trust, launched in late September and valued at US$22.8 million on Friday. It holds around 53,000 Bitcoins.

Bitcoin traded as high as US$675 on Monday on Tokyo-based exchange Mt. Gox, the best-known operator of a bitcoin digital marketplace. That was a rise of 27.7 per cent from Sunday's close. It last changed hands at US$672.

http://www.businesstimes.com.sg/breaking...g-20131119

An interesting news on bitcoin...

US police pay bitcoin ransom in virus attack

LONDON — Massachusetts police have admitted to paying a bitcoin ransom after being infected by the Cryptolocker ransomware.

The Cryptolocker malware infects a computer, normally via a legitimate-looking email that urges the reader to open an attachment often posing as a voicemail, fax, invoice or details of a suspicious transaction that is being queried.

Once the Windows computer is infected, the malware encrypts the user’s hard drive and then begins displaying a countdown timer, while demanding payment for the release of the data of 2 bitcoins — an almost untraceable, peer-to-peer digital online currency — which at current exchange rates equates to about US$1,338 (S$1,674).

“(The virus) is so complicated and successful that you have to buy these bitcoins, which we had never heard of,” Swansea Police Lt Gregory Ryan talking to the Herald News. “It was an education for (those who) had to deal with it.”
...
http://www.todayonline.com/tech/us-polic...rus-attack

Dear Folks!

We just crossed $1,000 usd/bitcoin! At this kind of speed, i think very fast this thing will be more expensive than gold.. no need to dig physically and no storage cost..

http://bitcoincharts.com/charts/mtgoxUSD...10zm2g25zv