Entries with tag virtual currency.

New Legal Defense Fund Raises Funds for Lawsuit by Man Named as Possible Bitcoin Creator

A website is raising money to enable Dorian Satoshi Nakamoto—a 65-year-old man that Newsweek magazine, in a March 2014 article, said appeared to be bitcoin’s creator—to possibly sue the publication. The website NewsweekLied—sponsored by Nakamoto’s attorneys at Kirschner & Associates—asks for contributions to be used for mounting a legal defense on his behalf, “to raise money to hold Newsweek accountable for [its] article.” He appears in a photograph on the site. The NewsweekLied website states Nakamoto and his family were “misquoted. In some cases, words were attributed to them that were never said.” Nakamoto specifically said that he didn’t create bitcoin. The website does not state what Newsweek would be sued for. So far, roughly $23,000 worth of Bitcoin has been donated by other supporters for Nakamoto’s personal use. Some Nakamoto supporters are skeptical about the motives behind this effort, implying Nakamoto’s attorney is spurring the effort. The article describes, in detail, the life story of the Temple City, California, man and features interviews with his family and others regarding the possibility this Nakamoto is the same Nakomoto who created bitcoin. (Tech Crunch)(CoinDesk)(Newsweek Lied)

Expedia Starts Accepting Bitcoins

Expedia has decided to take bitcoins for transactions. The travel website is accepting the virtual currency for US hotel bookings and may take it for other services in the future. Market watchers say this could be a significant step toward bitcoin’s mainstream acceptance. Emily Spaven, managing editor of bitcoin news site CoinDesk, told the BBC the move was “brilliant news” that “brings digital currency further into the consciousness of the mainstream.” Expedia plans to use bitcoin exchange Coinbase to process its transactions and will convert its bitcoins into US currency every 24 hours, according to Michael Gulmann, the travel company’s global vice president. This will help eliminate some problems associated with bitcoin’s exchange-rate volatility. (BBC)(Mashable)(Expedia)

Apple Allowing Virtual-Currency Transactions in Applications

Software developers can now offer virtual-currency transactions in their Apple-based applications for iPhones and iPads. Apple revamped its App Store guidelines to permit applications to process transactions with, according to the Apple developer blog, “approved virtual currencies provided that they do so in compliance with all state and federal laws for the territories in which the app functions.” Apple has not yet released a list of “approved” virtual currencies. Apple previously removed applications using virtual cash from its online store. In response, some developers reportedly deleted virtual currency coding from their programs so that they could remain in the store. Google Android currently supports transactions using several different types of virtual currency. (Reuters)(BBC)(Apple)

Major Bitcoin Exchange Is Embroiled in Ongoing Legal Saga

A pending class-action lawsuit in Chicago has alleged that the now-closed Mt. Gox bitcoin exchange, once the world’s largest, committed fraud. The company has filed for bankruptcy protection in both Japan and the US. Mt. Gox says it is working to discover what became of those bitcoins that it lost, which led to the company’s demise. In its bankruptcy documents, Mt. Gox claims it could not find 750,000 customer bitcoins, worth about $474 million, and $28 million in cash, although the company said it subsequently found 200,000 of the bitcoins. The exchange is working with Japanese police to determine what happened to the missing bitcoin. (SlashDot)(IT World) 

US Tax Agency: Bitcoin Will Be Treated Like Property

The US Internal Revenue Service (IRS) has issued information regarding how it intends to treat virtual currencies including bitcoin. They IRS stated that it will tax virtual currencies like property, governed by the rules applying to barter transactions. The agency also said it doesn’t consider virtual currencies to be legal tender and they cannot be used to pay tax debt. But those who receive a wage in a virtual currency still must pay taxes on it, based on the currency’s fair market value at the time of the transaction. Investors must treat virtual currencies as commodities. This means that upon selling them, an individual must pay capital-gains taxes if they have gained value but can claim a capital loss if they have lost value. (Associated Press)(USA Today)

Professional Basketball Team Accepts Bitcoins for Tickets, Fan Gear

The Sacramento Kings National Basketball Association (NBA) team announced it will start accepting bitcoins from fans wishing to pay online for tickets and team apparel on 1 March 2013, making it the first US major league sports team to accept the virtual currency. Vivek Ranadivé, the Kings’ new majority owner and also Tibco Software’s CEO, has introduced his NBA 3.0 movement, which seeks to use technology to improve the fan experience. The Kings have launched technologies such as a smartphone application that lets fans upgrade their seats, navigate the arena, and shake a virtual cowbell. The team is also improving its paperless ticketing process. Ranadivé said he also wants to give Google Glass to the coaching staff to see how they might use it. (Re/code)(The Sacramento Bee)

Banks Back off Bitcoin

The list of international governments and financial institutions concerned about Bitcoin is growing. Bank of France issued a warning about the risks associated with the digital currency, including its volatility as of late. The valuation rose late last month to $1,000/Bitcoin. China also issued a warning against trading in Bitcoin. Canada’s so-called “Big 6 banks,” including Scotiabank and National Bank, have reportedly frozen or shut down accounts owned by Canadian companies that trade the digital currency and convert it to cash. The US government is also investigating the digital currency. Bitcoin is unregulated and not backed by any central bank or government. Governments’ other primary concerns include money laundering and the ability for individuals to use it to circumvent currency controls. (Financial Times)(Global News)(Reuters – 1)(Reuters – 2)

Paying for College with Bitcoins

The University of Nicosia in Cyprus now lets students pay tuition with bitcoins, becoming the world’s first accredited university to accept the virtual currency. The school will also launch a master of science program in digital currency in spring 2014. University officials say their decision to accept bitcoins is unrelated to financial controls imposed by the government during the nation’s the recent economic crisis. Some journalists say the subsequent financial losses and continued economic hardship associated with the nation’s financial bailout from the EU may have prompted the school to accept the currency. Instead, the officials say, the move is designed to help students from countries in which traditional banking transactions are either difficult or costly pay for online degrees. (Fast Company)(The Los Angeles Times)(The Associated Press @ ABC News)(University of Nicosia -- 1)(University of Nicosia -- 2) 

Kenyan Service Combines Bitcoin, Mobile Payments

A recently launched service in Kenya combines virtual currency with mobile payments. Kipochi, “wallet” in Swahili, allows users to purchase Bitcoin with M-Pesa, a popular mobile payments system for small transactions used by about a third of the nation’s 44 million residents. The web service was created by Pelle Braendgaard, entrepreneur and programmer. He says adding Bitcoin would enable people to receive funds from outside Kenya without expensive bank or wire transfer fees. Kenyan expats reportedly send an average of about US$99 million per month back home. Coupling it with M-Pesa eliminates some of the complexity associated with using Bitcoin. There is a small fee associated with using the service, but Kipochi is a free service.  Braendgaard says he is working on porting the application to the phone as well as a merchant-based platform for Bitcoin. (Computerworld)(Kipochi)

Digital Cash Exchange Takedown Hurting Criminals Worldwide

The takedown of a Costa Rican-based digital cash exchange has caused “pain” to the criminals who used the virtual currency service to launder money, according to the US District Court for the Southern District of New York, which named its founder, Arthur Budovsky, and five co-conspirators in the allegation. Users of the service could anonymously exchange funds without requiring their identity to be verified. In addition to seizing the operation and its domains, law enforcement officials seized or restricted the activity of 45 bank accounts. Brian Krebs, a security expert who publishes Krebs on Security, told the BBC he had seen comments posted on crime-linked restricted access forums suggesting many criminal enterprises had suffered “steep losses” as a result. Liberty Reserve, as described  in the unsealed indictment published Tuesday, was “a financial hub of the cyber-crime world, facilitating a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking.”  The federal indictment also stated “Because virtually all of liberty reserve’s business derived from suspected criminal activity, the scope of the defendants’ unlawful conduct is staggering.” Prosecutors estimate that between 2006 and May 2013 the organization laundered more than $6 billion in criminal proceeds, making it “the bank of choice for the criminal underworld.” Of the seven individuals charged in the case, Budovsky was arrested in Madrid, Spain; four others named have been arrested and two more individuals are being sought by law enforcement in Costa Rica. The charges against them, in addition to conspiracy to commit money laundering, include conspiracy to operate an unlicensed money-transmitting business, and operating an unlicensed money-transmitting business. The money laundering count carries a maximum sentence of 20 years in prison; the other two charges have a maximum sentence of five years each. The federal attorneys note Liberty Reserve did have legitimate users, primarily outside the US, who used it as a PayPal alternative for transactions. (BBC)(The New York Times)(Krebs on Security)

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