Weekly Summary #4

Weekly News (No Fee Exchanges, Buying Weed with Bitcoin, Xapo, IRS Tries to Block Coinbase)

The past week in Bitcoin was much like any other week during recent months. The one difference that we have seen is with the names of news worthy organizations that have appeared. In the last week, names such as the Royal Bank of Canada, Bundesbank (Germany’s Central bank), China’s Central bank, Bank of England, Australia’s Commonwealth Bank, Bank of Japan, Deutsche Börse AG, and NASDAQ have all appeared in Bitcoin related headlines and all of them in a positive light. It seems that every single one of these organizations or government bodies is either experimenting with blcokchain technology or already implementing it.

This is a big step up from just a few months ago, when it was almost impossible to get any one of these organizations to even admit that Bitcoin or the technology that drives it, even existed, let alone carried any merit. Now, it seems that times have changed and that Bitcoin and blockchain have finally mustered enough respect and shown that the technology is sound.

All in all, it has been a positive week for Bitcoin and the digital currency world. With the always expected market shifts and slight change in trends all the way to hearings on buying drugs using Bitcoin, we have had a relatively good week.

New, No Fee Exchanges getting More Volume

After the Central Bank in China imposed new restrictions on exchanges within Chinese borders, a lot of the customers who once enjoyed the no-fee services of those exchanges have slowly left them and have headed to greener, still no fee grasses.

Smaller exchanges, such as BTC100 and CHBTC saw volume increases of up to 36,000 Bitcoins within a 24-hour period of time. This shift, while not totally unexpected is also not expected to last. It will only be a matter of time before The China Central Bank steps in and reigns in the other Chinese misfit markets.

Washington Senate Hearings: Buying Weed with Bitcoin

As reported last week, the State of Washington has had a bill introduced to the legislature that, if enacted, would prohibit both retailers and consumers of marijuana from using Bitcoin as a currency in any weed related business transactions.

The move comes as a result of Senator Ann Rivers(R) announced that she feared that Bitcoin would do more harm than good when it came to the state’s assurances that Marijuana industry practices would remain transparent. Rivers was the leading advocate for the legalization of marijuana in Washington and fears that Bitcoin and other digital currency transactions could harm the initiative in the eyes of opponents to the drug’s legal status.

While, on one hand the move makes sense, at least during the early part of marijuana’s legal status within the state, but on the other hand, the businesses face the problem of what to do with their money.

Due to the federal laws in the United States, which still outlaw marijuana, most banks will not allow the businesses that deal in the sticky-icky herb to have accounts. The U.S. Federal government had publicly stated that they would not “step on the toes” of the individual state’s law’s, except under specific situations, such as sales to minors and illegal interstate commerce of the drug.

Still, the banks won’t allow the marijuana retailers to establish accounts out of fear of problems down the road. The result has been an increase in robberies of these retailers since it is well known that they deal in cash. Bitcoin was the solution and now it appears that it may be a short lived one for the time being.

State representatives began hearing arguments from both sides, as well as making inquiries of their own. Posabit, a Bitcoin POS developer was there to comment and provide testimony, along with retailers that would be affected and the opposition, who is for the bill. Hearings will continue next week.

Swiss Finance Regulator to Xapo: You’re Good!

After concerns over customer privacy concerns, the Palto Alto, California based wallet, Xapo has finally found a new home. While the nod of approval from the Swiss Finance Regulator is not final acceptance, it has laid the groundwork for the company to begin meeting the requirements bestowed upon them by Switzerland’s Financial Market Supervisory Authority (FINMA).

Xapo will be required to join a self-regulatory organization, along with having other steps to take to meet the final requirements and gain acceptance. The company posted on their blog that they were confident that they would be able to meet the requirements.

This is just another, in a long line of Bitcoin related activities to come out of the Swiss realm over the past few months and bodes well for the future of Bitcoin in Switzerland.

IRS Tries to Block Coinbase in Protecting Customer Data

The Internal Revenue Service of the United States (IRS) is trying feverishly to prevent California based Coinbase from protecting the privacy rights of its customers.

As reported last week, The IRS has filed a suit, dubbed the “John Doe” summons case, where the tax authority wants to have access to the financial records of Coinbase customers to determine if there are any “tax cheats” using the service to hide financial gains from the regulatory body.

The whole ordeal began in November 2015, when the IRS filed suit that sought to serve a summons upon Coinbase to release the information about its customers. A Coinbase user, Jeff Berns filed an intervention to stop the IRS from its summoning. Of course, the IRS immediately filed to have that intervention rebuffed and finally, just last week, Coinbase filed suit to intervene as well.

The IRS has now filed a motion stating that neither Berns, nor Coinbase has the legal grounds to intervene due to the rights that the Constitution of The United States grants the IRS in performing its tax investigations.

The case is gaining attention and we will continue to report on it as news becomes available.

Where in the world is Satoshi Nakamoto?

It is becoming more and more like a “Where’s Waldo?” game or an episode of “Where in the World is Carmen San Diego?” Ever since the disappearance of the man or woman or group known only as Satoshi Nakamoto, the biggest question people have had is, “Where did the creator of Bitcoin vanish to?”

The rumors have ranged from boring to epic, tragic to heroic and everywhere in between. At the Satoshi Roundtable Conference, in Cancun Mexico, talks once again veered in the direction of Australian academic and entrepreneur, Craig Wright, who made the claim that he and up to 4 others were indeed Nakamoto before claiming he lacked the courage to provide the proof a short time later.

A new curve in the story has reporters (myself included) investigating the possibility of a new entity that may have claim to the intellectual property that was created by the group. New information could be released as early as next month.

Continued Progression

As redundant as the title of this section may be, it is the outright truth. There is a steady trend of progress being made within the Bitcoin world. It is also becoming ever more apparent that the Bitcoin world and the rest of the world are slowly coming together and merging more and more each and every day.

Aside from a few hiccups and missteps that are natural in any new merger, the outlook is optimistic and the forecast is great.