Review Category : Regulatory

 
 

The Reverse Merger as a Shortcut to a Publicly-Traded Bitcoin Vehicle

Attempts to build an asset offering financial exposure to bitcoin for the average investor has interested global entrepreneurs for years, yet an SEC-registered product that can be traded easily from a standard portfolio remains to be seen. Given the regulatory scrutiny such an instrument would be subject to, the most efficient way to access public markets with a bitcoin asset may be a known subversion of the standard issuance process: the reverse merger. In July 2013, Winklevoss Capital brought significant attention to this topic when they filed the S-1 for an ETF to track the price of bitcoin. The fund …

Read More →
 

Mt. Gox Seizures Linked to Silk Road in Fed Testimonies

Last summer, news that federal agents had seized a combined $5M from accounts owned by Mt. Gox roiled bitcoin markets. The warrants enabling the action cited improper filings when the company opened its bank accounts, including unlicensed operation of a money service business. Yet, written testimonies from federal regulators for the recent Senate hearings on digital currencies indicate the seizures were actually part of the much larger crackdown on online narcotics marketplace Silk Road – insight that presumably had to remain hidden at the time of the seizures due to the ongoing investigation. Experienced market participants will recall that before …

Read More →
 

Bitcoin’s Sixth Year Likely Driven By Institutional Participation

Happy Genesis Block Day to all of our readers. Today marks the five-year anniversary of the first bitcoin block ever mined, ushering in not only a new digital currency, but also the functional implementation of a potentially revolutionary value transfer technology. Over the past year, market participants have witnessed tremendous growth cycles driven by regional catalysts around the globe – from the Cypriot financial crisis in March to the Chinese exuberance over the last quarter. With increasing interest coming from institutional finance of late, it appears the most significant wave in bitcoin’s sixth year may be oriented not geographically, but …

Read More →
 

PBOC Addresses Bitcoin, TGB Measures China’s Behind-the-Scenes Interest

The impact of Chinese enthusiasm for bitcoin in recent months has been felt by effectively all market participants. Since the beginning of October, bitcoin’s exchange rate has climbed roughly 950% vs most government fiat, largely driven by CNY markets. Equally as interesting are the aggregate habits of Chinese market participants visible via a number of non-traditional sources and the signals those metrics may send. Daily XBT/CNY trading volume in China has climbed from approximately 10K XBT per day in early October to more than 150K per day more recently. The drivers of that volume is likely a mix of general …

Read More →
 

Familiar Price Gains, Updated Infrastructure: A Look at the Bitcoin Economy (Part 1)

The recent climb in bitcoin’s exchange rate has driven heavy attention from media and investors. As the second time this has occurred at such scale in 2013 alone, the broader conversation has made a subtle but important shift from simply trying to understand what bitcoin is and where it came from, to what is happening in the space and what the future might hold. Recent growth has been driven not just by speculators, but also entrepreneurs, venture capitalists and bitcoin users that have contributed to remarkable change in the digital currency economy since the last time these types of exchange …

Read More →
 
CoinLab Files Response in Mt. Gox Lawsuit
 

CoinLab Files Response in Mt. Gox Lawsuit

CoinLab responded last week to the ongoing lawsuit with Mt. Gox. Among other points, the filing asserts that Mt. Gox was in breach of contract by failing to provide necessary customer information, making it impossible for CoinLab to comply with regulations. We were first made aware of the latest filing here. Case Background In May of this year, CoinLab filed a $75M lawsuit against Mt. Gox for failure to turn over all North American bitcoin exchange operations as obligated per an agreement dated November 2012. In the same suit, CoinLab asserted that Mt. Gox was also in breach of the …

Read More →
 

TGB 3Q Review & 4Q Outlook Now Available

The third quarter of 2013 proved to be one of significant transition for bitcoin. After the remarkable increase in bitcoin’s price and public notoriety earlier this year, the last three months have provided a much-needed regrouping period. New information about issues at existing exchanges became available and dozens more have or will soon come online. Security of the bitcoin network grew dramatically as ASICs increased the network speed exponentially, while a host of new entrepreneurs and investors continue to support the market with ever-increasing infrastructure. The result will be a more structurally sound ecosystem as bitcoin enters its next wave …

Read More →
 

Mt. Gox Responds To CoinLab Lawsuit With $5.5M in Counterclaims

On Tuesday, Mt. Gox filed a response to the lawsuit brought against them by CoinLab. The two companies planned to work together as providers of bitcoin exchange services, but both parties have ultimately claimed a breach of contract by the other. We were first alerted of the latest filing here. Summary of Claims According to the contract, Mt. Gox would turn over all North American bitcoin exchange operations to CoinLab. The original negotiations for the deal took place during the Summer of 2012 and the contract was signed on November 22, 2012. After the signing date there would be a …

Read More →
 

[Op Ed] The Evolution of Financial Privacy and Bitcoin’s Ability To Restore Rights

Today is a somber day in the United States, particularly for New Yorkers. The events of this date 12 years ago are still fresh in many people’s minds, as are the memories of extreme heroism from fellow residents. Knowing that 9/11 was coming up, I recently visited the memorial at Ground Zero for the first time with some friends visiting from out of town. The space was vibrant and reflective of the events that occurred, but it was impossible for one thing not to stand out above all else: the unbelievable security detail at the venue. For those who haven’t …

Read More →
 

California Legislature Passes Bill To Reform Money Transmission Act

Last week, both the California State Senate and Assembly voted unanimously to pass a bill to amend the California Money Transmission Act (MTA). According to Roger Dickinson, Chair of the Assembly’s Committee on Banking and Finance who introduced the bill in February, one of the primary goals of the amendment is to “remove barriers to market entry to start-up payment technology companies.” In addition to federal regulations like those from FinCEN, money transmitters in the US are subject to state regulations as well. California’s Department of Financial Institutions (now the Department of Business Oversight, which oversees execution of the MTA) …

Read More →