Thread: Everything You Need To Know About Bitcoin, Satoshi Nakamoto

Underage sex claims rock Bitcoin group

By Reuters
May 16, 2014 | 1:15pm

Brock Pierce was recently named director of the Bitcoin Foundation.Photo: Getty Images; YouTube

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As the most prominent trade group pushing adoption of the electronic currency Bitcoin begins its annual conference on Friday, it is being roiled by controversy.

At least 10 members of the nonprofit Bitcoin Foundation have resigned over last week’s election of onetime Disney child star and current Bitcoin entrepreneur and financier Brock Pierce as a new director, officials at the group said.

Some of the members cited Pierce’s troubled past. That includes allegations in lawsuits from three employees of Pierce’s first company, bankrupt web video business Digital Entertainment Network, that he provided drugs and pressured them for sex when they were minors.

Pierce has denied the accusations, which first surfaced in 2000.

“The allegations against me are not true, and I have never had intimate or sexual contact with any of the people who made those allegations,” Pierce told Reuters via email.

Court records show 33-year-old Pierce, who played the title role in Disney’s “First Kid,” paid more than $21,000 to settle one employee suit, and he said others dropped their claims without money changing hands.

While Bitcoin Foundation officials played down the defections, several members who resigned from the foundation assailed its governance track record.

“The track record of prominent Bitcoin Foundation members has been abysmal,” Patrick Alexander, a resigning foundation member, said in a post on its discussion pages. “I no longer want to be associated with these people.” Attempts to reach him for additional comment were unsuccessful.

Though it is highly volatile, the value of the electronic currency in existence has skyrocketed into the billions of dollars as the number of businesses accepting it has increased and investors have sought to create new ways for it to be used.

More than 1,000 Bitcoin investors, business people and enthusiasts are expected to attend the conference in Amsterdam.

The programming effort that governs how Bitcoin works is led by Gavin Andresen, who is chief scientist at the foundation and gets a salary from it. The foundation also plays an important role for Bitcoin in lobbying on its behalf in various jurisdictions as authorities grapple with how to police the semi-anonymous currency.

Other members who resigned called on the board to more carefully vet future candidates as well as remove Pierce from the board.

Bitcoin Foundation general counsel Patrick Murck said his group had more than 1,500 members and would bounce back from the latest controversy.

“Democracy is messy sometimes,” Murck said. “If in the future members decide they want to have a vetting process, that’s great.”

Some Bitcoin Foundation members say they weren’t aware of Pierce’s past until after the election, when others circulated media accounts concerning the allegations.

Pierce was voted in by the foundation’s industry members, who pay higher dues, to fill one of two spots vacated by others who had resigned: Mark Kapeles, chief executive of the bankrupt top Bitcoin exchange Mt. Gox, and Charlie Shrem, who has been charged with conspiring to launder money for users of the shuttered Silk Road underground drug bazaar.

Pierce has made a splash in the insular Bitcoin world by backing more than a dozen startups, speaking frequently at conferences, and leading a bid to buy Mt. Gox for one Bitcoin, currently worth less than $500.

http://nypost.com/2014/05/16/underag...in-foundation/

30 June 2014 Last updated at 06:07 ET

Seized Silk Road bitcoin hoard sold in US

Control of the Silk Road's bitcoins passed to the US government following a raid on the net marketplace

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The auction of 29,000 bitcoins seized during a raid on the Silk Road internet marketplace has been completed.

The sale of the coins, worth about $18.7m (£11m), was carried out by the US Marshals Service on 27 June.

The Silk Road shut down in late 2013 following raids by the FBI and other law enforcement agencies which said it was trading in illegal drugs.

The auction ran for about 12 hours and the successful bidders are due to notified on 30 June.

The seized bitcoins are part of the civil forfeiture and criminal action brought against Silk Road owner Ross William Ulbricht.

The bitcoin hoard was sold by being split into nine blocks of 3,000 coins and one of 2,657.

The US Marshals declined to name who had put down bids for the coins although earlier this month the agency accidentally leaked a list of some of the buyers in an email update about the sale.

Officials at the Agency wrongly addressed the email message, inadvertently revealing most of the people to whom it had been sent.

The list included UK-based virtual currency payment processor Coinbase as well as auction site Second Market and marketplace Bitcoin Shop.

Another larger hoard of bitcoins, believed to be worth about $85m, was also seized during the 2013 raid. Mr Ulbricht is contesting ownership of these bitcoins saying they are his personal property and are not part of the Silk Road's assets now controlled by the US government.

The sale comes as California clarifies state laws governing crypto currencies such as Bitcoin. Until now it has been technically illegal to buy and sell using virtual currencies. The law ends a state prohibition that requires commerce to be transacted only with US currency.

http://www.bbc.com/news/technology-28085722

Bitcoin promoter pleads guilty to unlicensed use of currency

BY JOSEPH AX
NEW YORK Thu Sep 4, 2014 5:47pm EDT

Bitcoin Foundation Vice Chairman Charlie Shrem exits the Manhattan Federal Courthouse in New York January 27, 2014.
CREDIT: REUTERS/LUCAS JACKSON

(Reuters) - A man who helped to promote bitcoin wants to remain in the business despite pleading guilty Thursday to indirectly helping send more than $1 million in the digital currency to users of the illicit online marketplace Silk Road, his lawyer said.

Charlie Shrem, 24, pleaded guilty at a hearing in New York federal court to one count of aiding and abetting an unlicensed money transmitting business.

A co-conspirator, Robert Faiella, 54, pleaded guilty to a similar charge, and both men face up to five years in prison when they appear again in court in January.

"I knew that much of the business on Silk Road involved the buying and selling of narcotics," Shrem said in court. "I knew that what I was doing was wrong."

His lawyer, Marc Agnifilo, said that what Shrem did was an aberration and that Shrem plans to continue working in the bitcoin world if possible. Agnifilo emphasized that his client was not involved in directly supplying bitcoin to Silk Road users.

"We believe he is at least one step more removed from the heartland of illegal conduct, which is really Silk Road," the lawyer said.

The two pleaded guilty as part of a deal struck with prosecutors from the office of Manhattan U.S. Attorney Preet Bharara. They had been scheduled to go on trial Sept. 22.

http://www.reuters.com/article/2014/...0GZ2OG20140904

MtGox bitcoin chief Mark Karpeles arrested in Japan

• 14 minutes ago

Mr Karpeles' lawyers asked for the hearing to be delayed

Japanese police have arrested the CEO of the collapsed company MtGox, which was once the world's biggest exchange of the virtual currency, bitcoin.

Mark Karpeles, 30, is being held in connection with the loss of bitcoins worth $387 million (£247m, €351m) last February.

He is suspected of having accessed the exchange's computer system to falsify data on its outstanding balance.

MtGox claimed it was caused by a bug but it later filed for bankruptcy.

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Media captionThe BBC's Rory Cellan Jones explains how Bitcoin works
In March 2014, a month after filing for bankruptcy, the firm said it had found 200,000 lost bitcoins.

The firm said it found the bitcoins - worth around $116m - in an old digital wallet from 2011.

That brings the total number of bitcoins the firm lost down to 650,000 from 850,000.

That total amounts to about 7% of all the bitcoins in existence.

Bitcoin is a virtual currency built around a complicated cryptographic protocol and a global network of computers that oversees and verifies which coins have been spent by whom.

http://www.bbc.com/news/world-asia-33745611

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