Tag Archives: Bitcoin

Bitcoin is money, U.S. judge says in case tied to JPMorgan hack

Bitcoin qualifies as money, a federal judge ruled on Monday, in a decision linked to a criminal case over hacking attacks against JPMorgan Chase & Co and other companies.

U.S. District Judge Alison Nathan in Manhattan rejected a bid by Anthony Murgio to dismiss two charges related to his alleged operation of Coin.mx, which prosecutors have called an unlicensed bitcoin exchange.

Murgio had argued that bitcoin did not qualify as “funds” under the federal law prohibiting the operation of unlicensed money transmitting businesses.

But the judge, like her colleague Jed Rakoff in an unrelated 2014 case, said the virtual currency met that definition.

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Man Sentenced in First Bitcoin Securities-Fraud Case

NEW YORK?A Texas man who carried out what authorities said was the first federal bitcoin securities fraud to be prosecuted was sentenced on Thursday to 18 months in prison.

Trendon Shavers, 33 years old, was sentenced in Manhattan federal court by Judge Lewis A. Kaplan, who said Mr. Shavers committed a serious crime but had earned leniency through the honest work he has done since his 2014 arrest. Federal sentencing guidelines had called for a prison term of nearly three years.

The judge also ordered $1.2 million, the amount lost by 48 investors, to be forfeited and an equal amount of restitution.

He said Mr. Shavers, of Prosper, Texas, carried out a “classic Ponzi scheme” after offering potential investors high interest rates to turn over bitcoins, a virtual currency that operates outside government regulation. Authorities say that at the peak of the scheme Mr. Shavers possessed about 7% of all bitcoins in public circulation.

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Bitcoiners Starting to Appear in Panama Papers Leaks

lol! I thought I heard it all..

In the court of public opinion, the documents provided evidence that wealthy individuals and public officials keep certain financial dealings private. As pointed out in much of the original coverage of the Panama Papers leak, offshore business entities are often legal. Of course, some people used these structures for illegal purposes, like fraud, kleptocracy and tax evasion.

The documents were leaked by a “John Doe” to German newspaperSüddeutsche Zeitung (SZ).

“My life is in danger,” he told reporters in a May 6 statement.  He leaked the documents “simply because I understood enough about their contents to realize the scale of the injustices they described.”

SZ asked the International Consortium of Investigative Journalists (ICIJ) to help analyze the documents due to the sheer volume. 107 media organizations in 80 countries helped analyze the papers for one year before the first news stories were published on April 3, 2016.

wo prominent Bitcoiners, Erik Vorhees and Charlie Shrem, have been tied to the papers.

Vorhees is an influential figure in the digital currency space, having found Satoshi Dice, one of the most popular online gambling games based on the digital currency, as well as ShapeShift, a revolutionary new medium for exchanging digital currency. Born in Colorado, Vorhees later gained Panamanian citizenship, and he now lives in Panama City. Despite an attempt to denounce his US citizenship, the SEC declared him a US citizen in a case relating to his offering of shares in companies without registering them.

Charlie Shrem is another early Bitcoin entrepreneur. As co-founder of BitInstant, Shrem made it easy for people to get bitcoins early in the digital currency’s existence. He also is a founding member of the Bitcoin Foundation. He was sentenced to two years in prison in 2015 for charges relating to money laundering.

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Why A Hedge Fund Manager Who Made A Killing From Subprime Is Buying Bitcoin


Long before “The Big Short’s” Michael Burry was a household name for his insight into the upcoming subprime crisis of 2006-2007, there were many others among them John Paulson, Kyle Bass, and Corriente Advisors’ Mark Hart. Just like Bass, Mark is another Texas-based hedge fund manager who correctly predicted, and profited from, the subprime crisis. He is also an expert on China, and in fact, just last month in the aftermath of the recent Chinese devaluation which roiled markets, he said that “China should weaken its currency by more than 50 percent this year.”

In fact, it was Hart who (alongside ex-PBOC advisor Yi Yongding) first proposed the idea of the one-off devaluation that promptly afterwards become the conventional expectation for this weekend’s G-20 summit in Shangai. To wit:

Hart believes that the Chinese crawling devaluation is an error as it carries with its the latent threat of much more devaluation in the future, thus encouraging even more outflows, which in turn forces China to sell even more reserves, which destabilizes the economy even further, forcing even more devaluation and so on.


Instead, a one-off devaluation would allow policy makers to “draw a line in the sand” at a more appropriate level for the yuan, easing pressure on China’s foreign-exchange reserves and removing an incentive for capital outflows, according to Hart, who’s been betting against the currency since at least 2011. He adds that China should devalue before its $3.3 trillion hoard of reserves shrinks much further, he said, because the country can still convince markets it’s acting from a position of strength.

According to Hart, while a devaluation this year would be “jarring” and may initially accelerate capital outflows, it would ultimately put China in a stronger position. He said the country could explain the move by saying it would put the yuan at a level more reflective of market forces and allow the currency to catch up with declines in international peers.

As we said one month ago, “Hart is correct, and China will have to pick one option: either a sharp devaluation, or failing that, debt defaults: the current course of gradual CNY debasement will only results in an acceleration in capital outflows until ultimately China’s $3 trillion rainy day fund is whittled away to nothing (and as a reminder, according to some estimate just a little over $1 trillion in it is actually liquid assets).”

And while we explained that Hart’s “devaluation” trade consists of buying Yuan puts, according to a recent interview he gave to Raoul Pal RealVision, he has also put another trade on alongside his FX deval: buying bitcoin.

Dimon: ‘Bitcoin Is Going To Be Stopped!’

If you are a charter member of the centralized banking elite, like Jamie Dimon, the unbreakable nature of Bitcoin, or any decentralized system is beneath your stream of consciousness. Elitists tend to wish things they don’t understand or control into the cornfields. This actually works for them, to some extent, but Bitcoin does not fall within that number.

Warren Buffett, “The Oracle of Omaha,” made a similar technological faux pas in his naive assessment of Bitcoin last year, saying the following

“Stay away from it. It’s a mirage, basically. […] It’s a method of transmitting money. It’s a very effective way of transmitting money, and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it. I hope Bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways, and it will be. The idea that it has some huge intrinsic value is just a joke in my view.”

Jamie Dimon was just as dismissive and confident in his dismissal of the Bitcoin currency’s merit. Here’s what he had to say when asked directly about it by an audience member:

“You’re wasting your time (with Bitcoin)! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

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Tokyo police arrest CEO of bankrupt bitcoin exchange

Tokyo police on Aug. 1 arrested the CEO of the collapsed Mt. Gox bitcoin exchange over the looting of its virtual currency.

Police suspect that Mark Karpeles, 30, accessed the exchange’s computer records and falsified data on the outstanding balance of his own account.

He was arrested on suspicion of unauthorized creation and use of private electromagnetic records. Mt. Gox is undergoing bankruptcy proceedings.

In February 2014, Mt. Gox announced that hackers accessed its computer system and stole 850,000 bitcoins, worth 46.5 billion yen ($372 million) at that time, as well as up to 2.8 billion yen from the exchange’s accounts.

Officers of the Metropolitan Police Department examined transaction records stored on computers that were voluntarily submitted to them.

Police determined that only Karpeles had access to the computer system. They said he accessed the computer system and tampered with in-house records of transactions so that his account had $1 million more than there was.

Karpeles, a resident of Toshima Ward in Tokyo, is denying the allegation, according to police.

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Regulators in California, New York speak out against Coinbase ‘licensed exchange’ claims

This Monday, Coinbase Inc. launched what it dubbed the first regulated U.S. exchange and listed 24 states and one territory where the exchange would be available. Since the launch, however, at least two officials, in California and New York State, have come forward to say that Coinbase Exchange is not regulated in their states.

California Department of Business Oversight Commissioner Jan Lynn Owen said in a statement Tuesday, “The California Department of Business Oversight has not decided whether to regulate virtual currency transactions, or the businesses that arrange such transactions, under the state’s Money Transmission Act. California consumers should be aware Coinbase Exchange is not regulated or licensed by the State.”

And a spokesman for New York State Department of Financial Services Superintendent Benjamin Lawsky said, Coinbase has no license to operate in the state. Lawsky is best known for his New York BitLicense proposal, which has seen much criticism from the Bitcoin community and still does not exist in law.

“We are working with several companies, including Coinbase, on licensing and will continue to move forward expeditiously. That said, we have not yet issued any licenses to virtual currency firms,” said the NYDFS spokesperson in a statement Wednesday.

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