Circle Internet Financial Ltd. (more commonly known as Circle) announced the close of a $50,000,000 Series C round. All of Circle’s previous investors participated in the round, but it was co-led by two newcomers: Goldman Sachs’ Principal Strategic Investments Group and China’s IDG Capital. According to the WSJ, this investment puts Circle at a valuation of around $200MM.
Not only is this one of the largest funding rounds ever for a bitcoin company, Circle made some exciting announcements on top of the funding news. Users of Circle may now hold US Dollar balances and send those to anyone else in the world – without being exposed to the price volatility of bitcoin. USD balances on the site are FDIC-insured, another first for a bitcoin company. Further, IDG is acting as a strategic investor to help Circle move into the Chinese market — one that has typically been served only by domestic bitcoin companies.
Meanwhile in South America, the Chilean government has provided $40,000 in non-equity seed money to the country’s first bitcoin exchange, SurBTC.
Spanish tax authorities have declared that the buying and selling of bitcoin is exempt from VAT in Spain. Authorities in Germany, France, Finland, Belgium, and the UK have all previously made similar pronouncements.
Coinbase posted updated comments on the NYDFS’ proposed BitLicense, writing: “Following two open comment periods, the BitLicense appears to be just a few weeks away from being finalized. The latest draft, however, retains several key flaws that have not yet been addressed and which, if passed in their current form, will stifle innovation across the space and threaten both businesses and consumers in the state of New York.”
The California state assembly voted a bill (AB1326) which would require all digital currency startups to apply for special licensing out of committee and to the floor.
BITCOIN FOUNDATION IMPLODES
Nearly a month ago, newly elected Bitcoin Foundation board member Olivier Janssens made a post on Reddit called “The Truth About the Bitcoin Foundation“ in which he revealed that the Bitcoin Foundation is “effectively bankrupt” and just laid off 90% of their staff.
The foundation continued to insist publicly that everything was fine and Janssens was making a big fuss out of nothing, but the past month also saw the resignation of several top members of the Foundation and the election of two controversial figures, Bruce Fenton & Brock Pierce, as executive director and board chairman respectively.
Last November, the Bitcoin Foundation announced that it would drop all efforts at public policy, outreach, and education in order to focus solely on funding the core development of the Bitcoin protocol. But last week, the three core developers who were employed by the foundation (Gavin Andresen, Wladimir van der Laan, and Cory Fields) announced that they are now being funded by MIT Media Lab’s newly formed Digital Currency Initiative. The DCI is headed by former White House advisor Brian Forde.
Although the Bitcoin Foundation still exists as a legal entity, the purpose of the organization moving forward remains unclear. With an unstable financial situation and no longer funding the core developers, the future direction of the group has yet to be seen.
SILK ROAD UPDATE
This is old news by now, but I know that a lot of my readers don’t follow bitcoin news very closely and may have missed this fascinating development in the Silk Road case. A big thank you to my friend Geoff G. for bringing this to my attention before it was all over the news. I originally wrote the following a couple of weeks ago:
Two ex-federal agents who were assigned undercover on the Silk Road case have now been charged in a federal court in San Francisco with money laundering and wire fraud in connection with the case.
Secret Service agent Shaun W. Bridges is alleged to have stolen more than $800,000 in bitcoin from Silk Road, and sent it to his own personal accounts. DEA agent Carl Mark Force IV is alleged to have “stole[n] and converted to his own personal use a sizable amount of Bitcoins,” and was also charged with theft of government property and conflict of interest, according to the complaint filed by a United States District Court.
“The complaint described both former agents as members of a Baltimore-based task force that investigated Silk Road. The website had been the subject of investigations in several cities. A Manhattan-based investigation ultimately led to the filing of charges against the website’s founder, Ross W. Ulbricht, who was convicted last month on numerous counts.”
Agent Force allegedly maintained multiple aliases on the Silk Road, where he was in communication with the Dread Pirate Roberts. Using the official undercover name “nob,” he convinced Ross Ulbricht to send a wire transfer to him for the commissioning of a hit and sold information about the ongoing investigation against him to DPR. Using another personal alias, “french maid,” he again sold Ulbricht more secret information. Under a third suspected alias, “Death From Above,” Force actually sent a death threat to Ulbricht in an attempt to extort him for a quarter million dollars. The death threat referenced the “dead” target of the hit that Force offered to do (but did not carry out). Confused yet? CBS has you covered.
SA Force was simultaneously serving as the Chief Compliance Officer of a small bitcoin exchange, CoinMKT, where he is alleged to have used his powers as a government agent to demand the seizure of “suspicious” customer funds, transferring the seized funds into his own personal account.
The entire criminal complaint is a fascinating read.
+ Judge Katherine Forrest denied Ulbricht’s appeal for a retrial, writing, “This motion for a new trial…does not address how any additional evidence, investigation, or time would have raised even a remote (let alone reasonable) probability that the outcome of the trial would be any different.”
“That mundane service — harnessing Bitcoin’s workaday utility — is what so excites some investors and entrepreneurs about Argentina. Banks everywhere hold money and move it around; they help make it possible for money to function as both a store of value and a medium of exchange. But thanks in large part to their country’s history of financial instability, a small yet growing number of Argentines are now using Bitcoin instead to fill those roles.” The New York Times Magazine: Can Bitcoin Conquer Argentina?
+ The office of the Argentinian President sarcastically tweeted in response: “Apparently bitcoin is disrupting our economy now (?)”
The author of that piece, Nathaniel Popper, has a book coming out on May 19th, titled “Digital Gold: Bitcoin & the Inside Story of the Misfits and Millionaires Trying to Reinvent Money.” The book is available for pre-order on Amazon and Overstock now.
Jon Southurst: It’s Still Too Hard to Get Your First Bitcoin
Entrepreneur Magazine: Why Billionaire Investor Reid Hoffman is Betting Big on Bitcoin
CHECK THIS OUT
Purse.io’s new “Instant” feature allows users to buy anything from Amazon.com at a 5% discount on the listed price, and get free two-day shipping, even without having an Amazon Prime account.
A new browser-based application called FoldApp allows its users to spend bitcoin easily at any Starbucks location in the US, Canada, Mexico, UK, and Hong Kong, and at a 20% discount. I’ve been using it a lot over the past couple of weeks. It requires no account, loading a balance takes only seconds, and you can get your change back (in bitcoin, of course) after your purchase is complete.
BitcoinFax – Send faxes from your computer, pay with bitcoin.
BITS & PIECES
Rand Paul became the first US presidential candidate to accept campaign contributions in bitcoin.
Xapo announced a partnership with Argentina’s largest social networking site Taringa!, which gives every registered user on the site a bitcoin wallet, and allows them to earn BTC for contributing quality content to the site through a revenue sharing program. After reading the New York Times article about bitcoin in Argentina linked above, this move seems to hold a lot of potential.
UBS Bank is opening a “blockchain innovation lab” in London. UBS CIO Oliver Bussman is quoted as saying, “Our innovation lab at Level39 will provide a unique platform to explore emerging technologies such as blockchain and cryptocurrencies, and to understand the potential impact for the industry.”
Coinbase is now operational in the United Kingdom, and supports GBP buying and selling on the platform. The move also allows Brits to start trading on Coinbase Exchange, and introduces BTC/EUR and BTC/GBP currency pairs, as well as opening up merchant services to companies based in the UK.
BNY Mellon sponsored this article about “The Next Generation of Currency“, written by Andreessen Horowitz partner Michael V. Copeland.
Watch: Official trailer for Deep Web, a documentary about the Silk Road.