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Bitcoin is a global phenomenon. Since it was created back in 2009, it has changed the world of financial transactions. It was designed as a peer to peer cashless system, with transactions recorded on a decentralized blockchain. No single entity controls the blockchain and there are no geographical or regulatory borders. This makes bitcoin – and blockchain – very attractive.

The Rise of Bitcoin

In the beginning, bitcoin was a novelty. It was practically worthless and for several years, nobody outside of tech circles really knew it existed. By 2011, the idea of decentralized cryptocurrencies was catching on and other cryptocurrencies began to emerge from the shadows. Today, there are numerous altcoins, including Ripple and Litecoin, but bitcoin is still the best-known.

Bitcoin has entered the mainstream and it is now possible to buy everyday things using bitcoin. All Shopify stores now have the facility to accept bitcoin as a payment option. You can add bitcoin to your Microsoft account, and if you fancy a last-minute vacation, CheapAir accepts bitcoin as payment for flights.

Trading Bitcoin

You can also trade bitcoin for monetary gain. Buy and sell bitcoin or trade in it via a CFD with easyMarkets.

So, where does bitcoin fit into the world of finance right now?

In a world without bitcoin, financial transactions are controlled by vast financial institutions. Major financial institutions like PayPal act as third-parties in most transactions that take place online and offline. They provide merchant accounts, payment processing, and everything else you need to send money from A to B. Dig a little deeper and you’ll see that money is generated and controlled by governments and banks.

Bitcoin Compliments Traditional Financial Transactions

Bitcoin offers another option. It is open and transparent. It has its own settlement network and all transactions can be verified. Bitcoin runs on a peer to peer network that operates online. It is available globally. To send or receive bitcoin, all you need is a bitcoin wallet and an internet connection. Because it eliminates third-party financial institutions, it is faster and cheaper in many cases.

Researchers from Imperial College in London have looked at how bitcoin fits in with traditional financial systems. They concluded that bitcoin has the potential to fulfill a lot of roles in a more effective way.

Online banking is becoming increasingly common, but a lot of people don’t trust the system. Tales of scams and fraud are rife, and banks often wash their hands of the problem, refusing to reimburse customers who have lost their money.

Bitcoin transactions on the blockchain are verified, so it is impossible to make a fraudulent transaction. Records cannot be altered, and hacks are very rare. This makes bitcoin a safer system.

The Downsides of Bitcoin

The biggest drawback of bitcoin is its extreme volatility. Whilst the bitcoin price peaked at nearly $20k in December 2017, it has since dropped dramatically. Today it is worth less than $5k. For this reason, it is unlikely that bitcoin will replace traditional banking anytime soon.

Nevertheless, major financial institutions are integrating blockchain technology into their own systems, so it is likely that in the future, bitcoin and the underlying blockchain will become a part of our everyday lives.

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More and more people want to open a bitcoin IRA. Some believe that this is much too risky of an enterprise because of the volatility of cryptocurrencies. However, financial experts agreed that a diverse portfolio is the best portfolio, which in turn means that at least considering Bitcoin is a good idea. The reality is that it is possible that bitcoin, as well as the other biggest cryptocurrency, which is Ethereum, will absolutely soar in value. In fact, some have predicted an over 3000% increase in next 10 years. Besides the fact that you could end up incredibly rich comma there are a number of other reasons why you may want to consider adding cryptocurrencies to your investment portfolio.

 

Why You Should Open a Bitcoin IRA

 

  1. Cryptocurrencies have only existed for a decade. This means that, compared to other historically major investment and asset classes, they are still incredibly young. It also means that they still have a lot of room to grow. At the same time, they are not so young that they are completely new. Over the past 10 years, cryptocurrencies have shown themselves to be a pretty strong and interesting investment class.
  2. The world is becoming increasingly digital and it seems that this digitalization is never going to stop. Cryptocurrency is a significant digital and technological advancement and it seems logical to assume that they will soon earn a permanent place in the world of technology, which means in the entire world.
  3. Cryptocurrencies are really anonymous and this makes them attractive and appealing to a lot of people. Most would like to prefer the financial identity to remain private at all times period through cryptocurrencies, transactions can be conducted very discreetly and this also means there is less chance of identity theft and fraudulent transactions.
  4. You will not be influenced by the currency interference of the US Federal Reserve. There is no regulating body when it comes to crypto currencies like bitcoin or ethereum because there is no central bank that issued them. Like gold, silver, palladium, platinum, and other precious metals, this is specifically what attracts people to them.
  5. You do not have to pay for transactions or holding. There are some slight exceptions to this. You must hold your Bitcoin in a digital wallet. Some of those wallets are completely free, but the most advanced and most secure are paid for. It is up to you to decide whether or not you want to choose a bit for wallet. Similarly, transactions are completely free unless you want them to be conducted within a matter of seconds, in which case you will have to pay a fee to the Bitcoin Miner that completes the transaction. In other words, bitcoin can be completely free.

More and more people want to open a bitcoin IRA. Some believe that this is much too risky of an enterprise because of the volatility of cryptocurrencies. However, financial experts agreed that a diverse portfolio is the best portfolio, which in turn means that at least considering Bitcoin is a good idea. The reality is that it is possible that bitcoin, as well as the other biggest cryptocurrency, which is Ethereum, will absolutely soar in value. In fact, some have predicted an over 3000% increase in next 10 years. Besides the fact that you could end up incredibly rich comma there are a number of other reasons why you may want to consider adding cryptocurrencies to your investment portfolio.

 

Why You Should Open a Bitcoin IRA

 

Cryptocurrencies have only existed for a decade. This means that, compared to other historically major investment and asset classes, they are still incredibly young. It also means that they still have a lot of room to grow. At the same time, they are not so young that they are completely new. Over the past 10 years, cryptocurrencies have shown themselves to be a pretty strong and interesting investment class.

The world is becoming increasingly digital and it seems that this digitalization is never going to stop. Cryptocurrency is a significant digital and technological advancement and it seems logical to assume that they will soon earn a permanent place in the world of technology, which means in the entire world.

Cryptocurrencies are really anonymous and this makes them attractive and appealing to a lot of people. Most would like to prefer the financial identity to remain private at all times period through cryptocurrencies, transactions can be conducted very discreetly and this also means there is less chance of identity theft and fraudulent transactions.

You will not be influenced by the currency interference of the US Federal Reserve. There is no regulating body when it comes to crypto currencies like bitcoin or ethereum because there is no central bank that issued them. Like gold, silver, palladium, platinum, and other precious metals, this is specifically what attracts people to them.

You do not have to pay for transactions or holding. There are some slight exceptions to this. You must hold your Bitcoin in a digital wallet. Some of those wallets are completely free, but the most advanced and most secure are paid for. It is up to you to decide whether or not you want to choose a bit for wallet. Similarly, transactions are completely free unless you want them to be conducted within a matter of seconds, in which case you will have to pay a fee to the Bitcoin Miner that completes the transaction. In other words, bitcoin can be completely free.

 

These are just five reasons as to why you may want to consider investing in Bitcoin for your retirement period at the end of the day, having a diverse portfolio is the best way to make sure that you will have a nest egg to fall back on and this means you should consider alternative investment classes as well. The technological revolution is upon us and you may as well write that wave.

These are just five reasons as to why you may want to consider investing in Bitcoin for your retirement period at the end of the day, having a diverse portfolio is the best way to make sure that you will have a nest egg to fall back on and this means you should consider alternative investment classes as well. The technological revolution is upon us and you may as well write that wave.

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Bitcoin is clearly surging right now, with its value currently reaching $17,000 USD and is looking more and more like a sure investment. Yet it’s vital for anyone looking to invest in cryptocurrencies not to get lost in all the promises and actually stay well informed about Bitcoin’s technological progress.

Prior to considering if you should buy Bitcoin (BTC), you should know the history of the technological aspect of Bitcoin as well as what the experts believe lies ahead in its future.

With the biggest value of Bitcoin being its instant and secure P2P (peer-to-peer) payment transactions, it is now more than ever looking like it’s going to become the primary cryptocurrency in the global market, with over a 1,500% increased value in 2017 alone. Or is it? Let’s see what the finance experts have to say.

Is It a Bubble or Not?

According to the UBS Wealth Management, they are not boarding the hype train that bitcoin is ever to become a legitimate currency. Their global chief economist, Paul Donovan, highlights that cryptocurrencies are only valuable when they are accepted as currencies. Add the fact that bitcoin can’t be used for most important transactions plus that cryptocurrency supply can only rise, which makes them a bad store of value. His report further states that there’s no economic backing for the huge increase in bitcoin prices, which almost certainly means that it’s a bubble.

More Coins Means More Value

On the other hand, co-founder of FundStrat Global Advisor, Tom Lee, believes that Bitcoin will only gain in value over the next five years. He compares the Bitcoin to a social network, stating that the more engagement it gets the more it’ll grow in value. The idea behind is that the more coins are being issued, the more people will be using bitcoin as a master ledger – which basically means that bitcoin’s value is growing with the addition of more cryptocurrencies.

An Independent Cryptocurrency

Braden Perry, a partner at Kennyhertz Perry LLC, states that the world may be ready for a currency that’s decentralized and actually controlled by the people, especially since governments are known for power abuse – now more than ever. A currency without borders that’s available to anyone who can buy it might be a solution for the world we’re stepping in. However, he also states that Bitcoin may have a long journey ahead since it still requires greater adoption and more simplicity if it’s ever going to appeal to the general public.

Some Will Get Rich, Some Will Get Burned

At the moment, selling bitcoins probably seems like a great way to quickly raise a lot of money without any questions asked. Of course, some people will get rich out of it. In fact, some already are. But what about fears of being ripped-off? That’s almost as certain, state the experts, as some people will get burned while investing in cryptocurrencies.

Peter Smith of Blockchain company, which already went through the investment period with Bitcoin, is now looking to invest in Ethereum, a new cryptocurrency with a different architecture. Still, he advises people to be cautious and know what they’re doing before they actually start investing. As any leading accounting firm can tell you, you need to understand the market before you actually start investing.

Bottom Line

While there’s certainly going to be nay-sayers when it comes to cryptocurrencies, the concept itself is almost certainly going to survive and advance in the next couple of years. And what about bitcoin? No one can tell for sure, but the fact is that even though its prices are skyrocketing at the moment – it’s still volatile and can’t be easily used for trading. The best advice anyone can give you on cryptocurrencies is to actually know why they’re gaining so much popularity. Understanding them will mean that you can make a safer decision instead of just blindly following the hype train.

Craig Wright has publicly identified himself as digital cash system Bitcoin creator Satoshi Nakamoto.

The Australian entrepreneur’s admission ends years of speculation about who came up with the original ideas underlying the virtual currency.

Craig Wright has provided technical proof to back up his claim using coins known to be owned by Bitcoin’s creator.

Prominent members of the Bitcoin community and its core development team have also confirmed Craig Wright’s claim.

He has revealed his identity to three media organizations – The Economist, the BBC and GQ magazine.

During a London proof session, Craig Wright digitally signed messages using cryptographic keys created during the early days of Bitcoin’s development, the BBC reported.Craig Wright Bitcoin creator Satoshi Nakamoto

The keys are inextricably linked to blocks of Bitcoins known to have been created or “mined” by Satoshi Nakamoto.

Renowned cryptographer Hal Finney was one of the engineers who helped turn Craig Wright’s ideas into the Bitcoin protocol, he said.

Craig Wright said he planned to release information that would allow others to cryptographically verify that he is Satoshi Nakamoto.

Jon Matonis, an economist and one of the founding directors of the Bitcoin Foundation, said he was convinced that Craig Wright was who he claimed to be.

By going public, Craig Wright hopes to put an end to press speculation about the identity of Satoshi Nakamoto. Newsweek, The New Yorker, Fast Company and many other media organizations have all conducted long investigations seeking Bitcoin’s creator and named many different people as candidates.

In December 2015, two magazines, Gizmodo and Wired, named Craig Wright as a candidate after receiving documents believed to be stolen from him that revealed his involvement with the project.

Soon after these stories were published, authorities in Australia raided the home of Craig Wright. The Australian Taxation Office said the raid was linked to a long-running investigation into tax payments rather than Bitcoin.

The stories in December have led to many more journalists and others pursuing him and people he knows, Craig Wright said.

Bitcoins are now accepted as payment for a vast variety of goods and services.

There are currently about 15.5 million Bitcoins in circulation. Each one is worth about $449.

Satoshi Nakamoto is believed to amassed about one million Bitcoins which would give him a net worth, if all were converted to cash, of about $450 million.

Bitwalking is a digital crypto-currency that is generated by human movement.

Once installed on your phone, the free app converts steps to Bitwalking dollars (BW$).

The new digital currency will be earned by walking, unlike other digital currencies such as Bitcoins that are “mined” by computers.

The app counts and verifies users’ steps, with walkers earning approximately 1 BW$ for about 10,000 steps (about 5 miles).

Initially, users will be given the chance to spend what they earn in an online store, or trade them for cash.

The project founders, Nissan Bahar and Franky Imbesi, have attracted more than $10 million of initial funding from mainly Japanese investors to help launch the currency and create the bank that verifies steps and any transfers.

Electronics giant Murata is working on a wearable wristband that will provide an alternative to carrying a smartphone and show how many BW$ the wearer has earned.

Shoe manufacturers are poised to accept the currency, and a UK bank is in talks to partner with the project at one of the UK’s biggest music festivals next year.

Nissan Bahar and Franky Imbesi have a track record in disruptive technology that could help developing nations as much as richer ones.

In 2014, they launched Keepod, a $7 USB stick that acts like a computer in Nairobi, Kenya.

The idea of Bitwalking is to take advantage of the trend for fitness trackers by offering an additional incentive to keep fit.

The global scheme plans to partner with sportswear brands, health services, health insurance firms, environmental groups, and potentially advertisers who could be offered unique insights into the audiences they are targeting.

In the future, employers may be invited to take part in a scheme that would be offered to their employees to encourage them to stay fitter, with the currency they earn converted and then paid alongside their salaries.

In developed nations the average person would earn around 15 BW$ a month, but it is hoped that in poorer countries where people have to walk further for work, school, or simply to collect water, the Bitwalking scheme could help transform lives.

The impact Bitwalking could make in developing countries isn’t lost on the founders. It is one of the central reasons for creating the currency. In Malawi, one of the African nations to join at the launch of the project, the average rural wage is just US$1.5 a day.

Carl Meyer, the Bitwalking manager for Malawi, has set up the first two Bitwalking hubs in Lilongwe and Mthuntama where local people will be trained how to trade the BW$ online for US$ or the local currency, Malawi Kwacha.

Photo Tumblr

Photo Tumblr

Eventually an automatic online exchange is planned that will match up buyers with sellers and a rough exchange rate will begin to emerge.

The Go! app for iOS and Android devices will initially be offered to a handful of countries, including the UK, Japan, Malawi, and Kenya, to give the organizers a chance to iron out any difficulties before other countries come on board.

The idea of making money by simply walking isn’t completely new. Several start-ups have tried to connect keeping fit to earning rewards but most have failed to measure movement accurately enough to avoid scammers.

Bitwalking hasn’t officially released the algorithm used to verify steps but says it uses the handsets’ GPS position and Wi-Fi connections to calculate the distance traveled.

The team has created its own walking algorithm to verify users’ workouts after testing Google’s and finding that steps could be spoofed.

The phone reports the speed and type of movement as measured by the accelerometer.

At its launch the total amount someone can claim in one day will be capped at around 3 BW$ (roughly 30,000 steps) and running multiple accounts will be banned.

The success of the scheme is likely to depend on how much interest there is from established companies such as big sportswear brands, health insurance firms, or charity and environmental groups all of whom have an incentive to work with the fitness sector.

In Japan, it is not unusual for companies to offer employees rewards for fitness activities. Bitwalking’s founders hope their project could help extend this idea to other nations.

Japan’s largest convenience chain store, Lawson, runs a successful scheme that pays its workers up to $50 a year to eat healthily and keep fit.

However, the Lawson scheme is based on promises and trust, so unlike Bitwalking it is not verifiable. The vouchers earned cannot be traded for cash.

Despite the freedom to trade, it is likely that unless BW$ can be freely used to buy goods and services they are likely to drop in value from parity with the US$ – the point where the founders are launching it.

The online store will sell goods for the same price in BW$ as US$.

Keeping the virtual shelves of this online store fully stocked will be one of the first challenges.

The store isn’t expected to be open all the time, but plans are in place for other retailers and service providers to accept the currency in their stores too.

It is still not clear how a currency that appears to be so easy for users to produce could maintain its value, nor if the initial funding for the scheme will be sufficient to sustain it in the initial period while confidence in its value is being built up.

The Bitwalking website will invite people to apply to join the scheme so the company has some control over user numbers.

Because the new scheme necessarily tracks its users there will be data available that could be particularly valuable to advertisers – and accompanying concerns over privacy.

Transfers of the new currency will also be carefully monitored with transactions going through a central “bank” which verifies each deal using the block chain method used to transfer other crypto-currencies such as Bitcoin.

Users will have access to their own wallet which stores the Bitwalking dollars they have earned and will be able to transfer them to others via the app.

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Bitcoin has been shaking up the tech and finance worlds ever since it was first introduced in 2009 as the world’s first cryptocurrency created by Satoshi Nakamoto. Since then world media has been paying close attention to bitcoin’s status as a real means of value exchange, with many questions surrounding its viability and investment value still continuing to rise to the surface.

Thanks to the infographic provided by BuddyLoans, we take another look at the phenomenon of bitcoin and pick out four reasons, despite its volatile value fluctuations, why it might be worth investing in.

Decentralised Nature

Due to bitcoin’s origins and separation from any political or state affiliation, many people have seen it as an interesting investment vehicle safe from governmental manipulation. Its decentralised nature, for some, has made it appear a good form of portfolio insurance.

Couple that with the fact that bitcoin is easy to carry and store, and that it doesn’t need to be deposited or controlled by banks or other financial regulations, and it definitely makes for an interesting investment option.

Youth

Also a possible reason as for why not to invest, bitcoin’s relative youth, when compared to long-standing investment options like gold for example, raise a lot of questions. Yet even a decade-old, bitcoin’s newness makes it particularly volatile in terms of its value but also leaves room for very large profits.

If you can handle that kind of risk then bitcoin could prove a very bankable investment strategy yet.

Open Payment Network

Unlike conventional financial networks like Mastercard and Paypal that have specific company owners, the Bitcoin network is independent, uncontrolled and relatively unlimited in terms of what you could do with it.

The consequence of its open payment network throws it open to innovation that might supersede conventional payment technologies much in the same way the open web has allowed companies like Google, YouTube and Facebook to dominate. Investing in it allows you to capitalise if and when these developments come to fruition.

Bitcoin Payments and Applications

Another key reason to look into bitcoin as an investment surrounds the fact that it is resilient in the face of international money transfers and speedier than the likes of Moneygram and Western Union to boot.

What’s more are the number of bitcoin applications and start-ups in development, seeking to make payment even easier for bitcoin users and enable them to convert local currencies into the cryptocurrency.

Bitcoin is still an interesting prospect to say the least. To find out more information make sure you take a look at the following infographic.

Crypto-Currency

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Former US special agents Shaun Bridges and Carl Force have been charged with stealing large amounts of Bitcoin, which came into their possession during an investigation into the notorious Silk Road marketplace.

The Department of Justice (DoJ) alleges that Shaun Bridges stole more than $800,000 in Bitcoin.

Carl Force has also been charged with money laundering.

Best known for selling illegal drugs, Silk Road was closed in 2013 following raids by the FBI and other agencies.

The man accused of running the site, Ross Ulbricht, was convicted in February, and prosecutors argued that he had earned about $18 million in Bitcoin from the operation.

Carl Force, who worked for the Drug Enforcement Administration (DEA), served as an undercover agent during the investigation into the Silk Road.Special agents Shaun Bridges and Carl Force charged with stealing seized Bitcoins

One of his tasks involved communicating with Ross Ulbricht, known online as “Dread Pirate Roberts.”

The DoJ alleges that “without authority”, Carl Force, 46, “developed additional online personas and engaged in a broad range of illegal activities calculated to bring him personal financial gain”.

“In doing so, the complaint alleges, Force used fake online personas, and engaged in complex Bitcoin transactions to steal from the government and the targets of the investigation.

“In one such transaction, Force allegedly sold information about the government’s investigation to the target of the investigation.”

Carl Force is charged with wire fraud, theft of government property, money laundering and conflict of interest.

Shaun Bridges, who worked for the US Secret Service, is charged with wire fraud and money laundering.

The DoJ alleges that Shaun Bridges transferred more than $800,000 in Bitcoin into an account at MtGox, a Japanese digital currency exchange that filed for bankruptcy in February.

“He then allegedly wired funds into one of his personal investment accounts in the United States mere days before he sought a $2.1 million seizure warrant for Mt. Gox’s accounts,” the DoJ says.

Shaun Bridges and Carl Force are appearing in a San Francisco court on March 30.

A Bank of America’s client claims that he got full access to someone else’s account because they had the same user name.

After the bank mistakenly granted him with $215,238.22, the California man says he decided to leave banks entirely for Bitcoin.

“This is the exposure of a fundamental problem of a bank not able to operate under the tenets of a bank,” he wrote in a post on reddit.com.

“I’ve moved everything out of the banking system but what is necessary to be able to operate conveniently in the fiat economy. After what just happened I realize I have to go full bitcoin,” he added.

The man then explained how Bank of America made him “almost a quarter million dollars” richer:

  1. I logged into Bank of America and immediately noticed that I had almost a quarter million dollars more than I did the day before. My account is there, and so are some other accounts.
  2. I looked through the transactional details of the unfamiliar account and online statements. It definitely wasn’t an old account of mine that someone had generously funded without telling me. This is someone else’s account and I have full access to it and all information associated with it. I do a test and get as close as I can to transferring money out it without clicking the final button. It’s obvious I can transfer money out of it.
  3. I realize that calling online banking support will put the issue in the hands of an attendant who views this as a technical problem that is solved by merely moving the accounts out of my login without realizing how fundamentally significant this is. Open ticket, close ticket, nothing to see here.Bank of America breached policy
  4. I drive to the local branch and request the manager. I tell him that if he has a few moments I have something interesting to show him. I provide my debit card and ask him to pull up my account. He does. I ask him how much is available for immediate withdrawal. He says approximately $220,000. I tell him it isn’t my money and the bulk of that money is in an account that isn’t mine. We stare at each other for a long time.
  5. After he gathered his wits about him he starts making phone calls to escalate the matter. After two hours they still have no explanation and are having difficulty removing the well funded account from my login. Apparently the account belongs to a company with the same user name that I have. Which is impossible in their system. The only way they can get the money out of my reach is to destroy my online profile and recreate it with a new user name. I’m led to believe that my account and information has been made accessible to the other company as well.
  6. He starts to fill out lots of forms. He says “This form has a check box I need to ask you about. Based on what I know about you, I assume you are going to the media. Have you done so already or will you?” I say “No I haven’t and yes I will. In addition, when I leave your office my next phone call is to the owner of this account. I assume if I don’t tell him what happened with his money and information, no one else will. I’m going to tell him his bank balance and ask him if he has a good lawyer. I also want you to include in your notes that I’m demanding an affidavit from Bank of America stating that during the time I was granted access to these funds I didn’t take any.”
  7. I was given a case number and informed that I would be contacted by a “special internal group” that has “questions” about the screen shots I took to document the matter. I suppose “questions” is another way of saying “demands that I destroy evidence of the bank’s wrong doings”. So far I’ve heard nothing.
  8. I leave the branch and call the owner of the business whose account I’d been granted access to. Apparently there’s no diplomatic way to start a conversation like this and I’m hung up on twice. The third time I got the owner and blurted out his account balance before he could hang up. Now he’s listening. I explained everything and, long story short, he didn’t seem to be concerned at all about what happened. He has too much faith in the banking system to believe there could be risk.

The Bank of America customer says he wanted to share the story to let people “to determine the quantity and degree of ways Bank of America breached policy, contract, fiduciary responsibility, protection of privacy and the extent to which the software that manages trillions of dollars may be flawed”.

BelleNews.com has contacted both Bank of America and its customer for comments. We will keep you updated.

More info to come soon…

The US government will auction $18 million worth of the virtual currency Bitcoin, which was seized by the FBI when it shut down the Silk Road online marketplace in October last year.

Silk Road, which operated on the so-called “dark net”, traded in drugs and other illegal goods.

Payments were made via crypto-currencies, to ensure anonymity.

The Bitcoins were seized during the arrest of Ross Ulbricht, the alleged mastermind behind Silk Road.

The US government will auction $18 million worth of the virtual currency Bitcoin seized by the FBI when it shut down the Silk Road

The US government will auction $18 million worth of the virtual currency Bitcoin seized by the FBI when it shut down the Silk Road

Ross Ulbricht, 29, who was known online by the pseudonym Dread Pirate Roberts, or DPR, is currently awaiting trial.

In a statement, the US Marshals Service, which is conducting the sale, said the 29,656.51306529 Bitcoins up for auction were those that had “resided on Silk Road servers”, but did not include the stash on Ross Ulbricht’s personal computers.

The US authority added that it would “not sell to any person who is acting on behalf of or in concert with the Silk Road and/or Ross William Ulbricht, and bidders will be required to so certify”.

Last year, Carnegie Mellon University estimated that over $1.22 million worth of trading took place on the Silk Road every month.

Prospective bidders will have to put forward a deposit of $200,000, and all offers must be made in cash.

The bidding process will begin on June 27.

Expedia has become the latest company to accept Bitcoin transactions as a form of payment.

The travel agency will initially accept the virtual currency for hotel bookings only, and is currently restricting the trial to its US site.

Expedia’s announcement comes after a turbulent few months for Bitcoin, which has been plagued by security concerns.

Expedia has become the latest company to accept Bitcoin transactions as a form of payment

Expedia has become the latest company to accept Bitcoin transactions as a form of payment

A number of smaller online travel sites already accept virtual currencies, including Travel Keys and CheapAir, but Expedia is the first company of its size to adopt Bitcoin.

In a statement, Expedia’s global vice-president, Michael Gulmann, said the company was “in a unique position” to “solve travel planning and booking for our customers and partners alike by adopting the latest payment technologies”.

Expedia will use Bitcoin exchange Coinbase for processing transactions, but Michael Gulmann told the Wall Street Journal that the company would not hold the currency, but would convert its Bitcoin deposits back into US dollars every 24 hours.

Bitcoin, which is the world’s most prominent crypto-currency, has been the subject of much controversy in recent months.

The collapse of Japanese Bitcoin exchange MtGox, following a number of security breaches, harmed the currency’s reputation, and there have been several controversies surrounding taxation of transactions made with Bitcoin.

The digital currency took another step closer to the mainstream this week, with both Google and Yahoo adding its conversion price to its financial tools.

More than 60,000 online retailers now accept Bitcoins worldwide.

Former world’s biggest Bitcoin exchange Mt. Gox has been put in administration by a Japanese court.

Mt. Gox announced in February that hackers had stolen hundreds of thousands of Bitcoins from it, worth about $500 million.

It later said that it had found a substantial number of the Bitcoins and had hoped to find a way to continue as a business and pay back customers.

But the court dismissed this plan and appointed an administrator.

In a statement on Mt. Gox’s website the administrator said that bankruptcy proceedings were likely to follow.

Mt. Gox has been put in administration by a Japanese court

Mt. Gox has been put in administration by a Japanese court

This would involve Mt. Gox customers being asked to make any claims through the court, although the administrator pointed out that there was no time frame for this process at the moment.

Customers can continue to check the balance of any Bitcoins they have with Mt. Gox but are warned that this is not necessarily the amount they would receive as the result of a claim.

Mt. Gox said at the time it went offline that the Bitcoins had been stolen from its system by hackers who exploited a loophole in the software that oversaw the Bitcoin system. The administrator said that it plans to investigate the missing Bitcoins as part of its role.

The founder of Mt. Gox, Mark Karpeles, refused a request by a US court to attend a hearing this week to answer questions about the collapse of the exchange. He has not been charged with any crime.

Bitcoin is currently trading for around $500, down from a high of more than $1,100 last year.

Bitcoin exchange Mt. Gox has given up plans to rebuild under bankruptcy protection and has asked a Tokyo court to allow it to be liquidated, the Wall Street Journal reported, citing people familiar with the situation.

The source cited the complexity of the procedure and the lack of realistic rehabilitation plans for the Tokyo-based exchange as reasons for the move, the newspaper said.

Bitcoin exchange Mt. Gox has given up plans to rebuild under bankruptcy protection and has asked a Tokyo court to allow it to be liquidated

Bitcoin exchange Mt. Gox has given up plans to rebuild under bankruptcy protection and has asked a Tokyo court to allow it to be liquidated (photo Getty Images)

Mt. Gox, once the world’s biggest Bitcoin exchange, filed for bankruptcy protection in Japan last month, saying it may have lost some 850,000 Bitcoins – worth around $454 million at today’s rates – due to hacking into its computer system. It has since said it found 200,000 of those Bitcoins.

Mt. Gox’s lawyers declined to comment on the matter.

Mt. Gox CEO Mark Karpeles won’t travel to the US to answer questions about the Bitcoin exchange’s US bankruptcy case, the company’s lawyers told a federal judge this week.

Bitcoin exchange MtGox said in a filing that it has found 200,000 lost virtual coins.

MtGox said it found the Bitcoins – worth around $116 million – in an old digital wallet from 2011.

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

MtGox, formerly the world’s largest Bitcoin exchange, filed for bankruptcy in February, after it said it lost thousands of Bitcoins to hackers.

MtGox said in a filing that it has found 200,000 lost Bitcoins

MtGox said in a filing that it has found 200,000 lost Bitcoins (photo Reuters)

“MtGox had certain old-format wallets which were used in the past and which, MtGox thought, no longer held any Bitcoins,” said MtGox chief executive Mark Karpeles in the filing.

However, “on March 7, 2014, MtGox confirmed that an old-format wallet which was used prior to June 2011 held a balance of approximately 200,000 Bitcoins,” Mark Karpeles said.

Mark Karpeles said MtGox moved the found Bitcoins to offline wallets on March 14 and 15 so that they could not be targeted.

At the time of the MtGox theft, about 750,000 customer Bitcoins were stolen as well as close to 100,000 of MtGox’s own Bitcoins.

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

MtGox recently won brief bankruptcy protection in the US as the firm’s case works its way through Japanese courts.

MtGox Bitcoin exchange has won a temporary bankruptcy protection in the US.

A judge in Dallas, Texas, agreed to protect MtGox’s assets and temporarily halt two US lawsuits while bankruptcy proceedings occur in Japan.

MtGox filed for bankruptcy in Japan in February after losing about $473 million worth of customers’ Bitcoins to what it says was a hacking attack.

The company is scheduled to return to court on April 1 to extend the protections.

MtGox filed for Chapter 15 protection in the US late on Sunday.

The filing asks the US bankruptcy court to recognize MtGox’s bankruptcy in Japan and protect its US assets.

MtGox Bitcoin exchange has won a temporary bankruptcy protection in the US

MtGox Bitcoin exchange has won a temporary bankruptcy protection in the US

And it gives MtGox a temporary reprieve against two US lawsuits: one a class-action suit in Chicago filed by an Illinois resident, and another a $75 million breach-of-contract case filed in Seattle by Coinlab Inc.

At the time of the MtGox theft, about 750,000 customer Bitcoins were stolen as well as close to 100,000 of MtGox’s own bitcoins.

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

Steven Woodrow, the lawyer leading the Chicago class-action suit, told Judge Harlin Hale that the case was a “massive fraud”.

MtGox’s attorney, David Parham, denied there was any fraud and said the company and its founder, Mark Karpeles, were complying with the terms of the Japanese bankruptcy proceeding.

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The web accounts of Mark Karpeles – boss of the troubled MtGox Bitcoin exchange – have been attacked by hackers.

The attack on Mark Karpeles accounts seems to have been motivated by growing frustration over the actions of MtGox.

Last month MtGox stopped trading and filed for bankruptcy after finding out that $465 million in Bitcoins had been lost via a security bug.

Many have called on the exchange to release more information about what happened to the lost Bitcoins.

The attacks were mounted on the personal blog and Reddit account of Mark Karpeles and left the hackers in charge of both social media accounts.

The attack on Mark Karpeles accounts seems to have been motivated by growing frustration over the actions of MtGox

The attack on Mark Karpeles accounts seems to have been motivated by growing frustration over the actions of MtGox

Hackers used their access to grab detailed information about trading activity at MtGox. They then shared their findings by posting a 716MB file containing much of what they had found.

The material posted included an Excel spreadsheet of more than one million trades, entries from MtGox’s business ledger and information about its back-office administration software.

“It’s time that MtGox got the Bitcoin community’s wrath instead of [the] Bitcoin community getting Goxed,” wrote the hackers in a message accompanying the data dump. The word “Goxed” has been used to describe the sudden interruptions in trading MtGox imposed when it was going through technical problems before its final closure.

According to Forbes writer Andy Greenberg, although $465 million in Bitcoins (approximately 744,000 coins) had supposedly gone astray from MtGox, no activity suggesting they had been traded had been seen in the blockchain – the central list of buying and selling that underpins the entire Bitcoin network.

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Dorian Prentice Satoshi Nakamoto, the man named by the Newsweek magazine as the creator of Bitcoin earlier this week, has denied any involvement.

Satoshi Nakamoto, who changed his name to Dorian Prentice Satoshi Nakamoto in 1973, said he had not even heard of virtual currency Bitcoin until a few weeks ago.

He was singled out as the man who wrote the code underpinning Bitcoin by Newsweek.

But he said that quotes attributed to him that seemed to suggest his discontinued involvement with the project had been “misunderstood”.

“I got nothing to do with it,” Satoshi Nakamoto told a reporter on Thursday.

The man was identified as the “face behind Bitcoin” in a Newsweek article published this week. A reporter spent about two months investigating the claim and tracking him down.

When the reporter – flanked by two police officers – found the 64-year-old former physicist at his home in California and asked him if he was involved with Bitcoin, he is reported to have said: “I am no longer involved in that and I cannot discuss it.”

However, Dorian Prentice Satoshi Nakamoto told an Associated Press reporter on Thursday: “I’m saying I’m no longer in engineering, that’s it. And even if I was, when we get hired, you have to sign this document, contract, saying you will not reveal anything we divulge during and after employment. So that’s what I implied.

Newsweek named Dorian Prentice Satoshi Nakamoto as the creator of Bitcoin

Newsweek named Dorian Prentice Satoshi Nakamoto as the creator of Bitcoin

“It sounded like I was involved before with Bitcoin and looked like I’m not involved now. That’s not what I meant. I want to clarify that.”

Dorian Prentice Satoshi Nakamoto said he was born in Japan and moved to America in 1959 and that English was not his first language.

The value of Bitcoin has fluctuated as knowledge of and interest in what was until recently a little-known currency has increased. It is used to bypass financial institutions, making it attractive to people who want to trade directly. That has led to a level of adoption by speculative investors and some criminal enterprises.

This week, a Democratic Congressman is reported to have called for it to be banned. Jared Polis called the currency “unregulated and unstable”.

In 2012, a leaked FBI report showed that the agency was concerned that Bitcoin could become widely used by criminals.

The report said that the virtual currency was an “increasingly useful tool for various illegal activities beyond the cyber realm”.

In August 2013, it was announced that the “scale of the risk posed by” Bitcoin was to be investigated by the FBI on behalf of a US Senate committee.

The entity behind it has always been known as “Satoshi Nakamoto”, although it is unknown whether or not that is a pseudonym.

Dorian Prentice Satoshi Nakamoto insisted he had never heard of Gavin Andresen, a leading Bitcoin developer.

Gavin Andresen told Newsweek he had worked closely with the person or entity known as Satoshi Nakamoto in developing the system, but that they never met in person or spoke on the phone.

Dorian Prentice Satoshi Nakamoto told the AP that he would have had the technical ability to come up with Bitcoin.

He said: “Capability? Yes, but any programmer could do that.”

He also admitted that elements of the Newsweek story were correct. He said that he did once work for a defense contractor.

Dorian Prentice Satoshi Nakamoto added that he also worked on missile systems for the US Navy and Air Force and, consequently, it was necessary to keep many details of his work was confidential.

Newsweek reporter Leah McGrath Goodman, who spent two months researching the story, told the AP: “I stand completely by my exchange with Mr. Nakamoto. There was no confusion whatsoever about the context of our conversation – and his acknowledgment of his involvement in Bitcoin.”

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According to Japan’s government, Bitcoin is not a currency but some transactions using the virtual unit should be taxed.

“If there are transactions and subsequent gains, it is natural…for the finance ministry to consider how it can impose taxes,” said chief cabinet secretary Yoshihide Suga.

Japan also said banks cannot provide Bitcoin as a product to customers.

The government is trying to determine the total volume and value of Bitcoins in circulation around the world.

Japan's government says Bitcoin is not a currency but some transactions using the virtual unit should be taxed

Japan’s government says Bitcoin is not a currency but some transactions using the virtual unit should be taxed

Some estimates put the global market for Bitcoins at about $7 billion.

Countries and their tax authorities have been grappling with how to regulate Bitcoin, with some seeing it as a route for tax evasion or money laundering.

Russia has declared transactions illegal, China has banned its banks from handling Bitcoin trades, and there have been calls for the US to do the same.

Singapore has imposed a tax on Bitcoin trading and using it to pay for services, after classifying it as goods, rather than a currency.

Last month leading Bitcoin exchange, Tokyo-based MtGox, filed for bankruptcy after losing an estimated 750,000 of its customers’ Bitcoins.

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Newsweek magazine’s claim that it has found the creator of the Bitcoin virtual currency sparked controversy.

Before now it was assumed that the name behind Bitcoin, Satoshi Nakamoto, was a pseudonym for the group of coders who developed the system.

Now Newsweek claims Bitcoin creator Satoshi Nakamoto is a 64-year-old model train enthusiast who lives on the outskirts of Los Angeles.

The claim has drawn criticism with many saying Newsweek had only circumstantial evidence for its assertion.

Newsweek reporter Leah Goodman said she tracked Satoshi Nakamoto down by seeking public records for US citizens bearing that name. She then investigated people whose background, education and employment history showed they might be capable of creating the crypto-currency.

Newsweek claims Bitcoin creator Satoshi Nakamoto is a 64-year-old model train enthusiast who lives on the outskirts of Los Angeles

Newsweek claims Bitcoin creator Satoshi Nakamoto is a 64-year-old model train enthusiast who lives on the outskirts of Los Angeles (photo Newsweek)

Leah Goodman’s enquiries focused on one candidate in particular who seemed to have the right profile and whose involvement was hinted at by other Bitcoin developers.

Further evidence, she said, arose when talking to his family members revealed his obsession with privacy, his political leanings and his facility with maths.

The evidence led Leah Goodman to confront Satoshi Nakamoto as his home where she asked if he was the creator of Bitcoin.

In response, Satoshi Nakamoto said: “I am no longer involved in that and I cannot discuss it.”

Many Bitcoin commentators on social networks have expressed skepticism about the find saying the evidence Leah Goodman gathered was not convincing. The story was called “fake” by some commentators on the Bitcoin Talk forum who demanded Satoshi Nakamoto carry out signed Bitcoin transactions to prove that he was the currency’s originator.

Others criticized Newsweek for publishing a picture of Satoshi Nakamoto and revealing so much about his life.

On Twitter, Leah Goodman said Newsweek magazine had only printed information that was publicly available.

Read Newsweek full article here.

MtGox Bitcoin exchange has reportedly filed for bankruptcy protection in Japan.

The application was made in Japan by lawyers acting on behalf of the exchange and comes only days after MtGox went offline.

On Tuesday, the exchange’s boss said he was working hard to find a “solution to our recent issues”.

Before going offline, technical troubles meant it prevented customers transferring digital cash to other exchanges on February 7.

MtGox Bitcoin exchange has filed for bankruptcy protection in Japan

MtGox Bitcoin exchange has filed for bankruptcy protection in Japan

Details of the bankruptcy are scant but the application for protection has been accepted by a district court in Tokyo, reported AFP. At the court hearing, the company said it had outstanding debts of about 6.5 billion yen.

MtGox’s lawyers are believed to have decided to apply to the court for protection after US regulators filed a subpoena against the company.

Reports suggested the site shut down after it discovered that an estimated 744,000 Bitcoins – about $350 million – had been stolen due to a loophole in its security.

MtGox’s troubles have put pressure on the price Bitcoin owners can get for their holdings. Currently one Bitcoin is worth about $561, a price far lower than the high of $1,000 per coin it hit in November 2013.

Meanwhile, Vietnam has banned its banks from handling Bitcoin saying the virtual cash is not legal tender. Vietnam’s state bank said trading in Bitcoins carried “potential risks” for users.

At the same time, Japan’s deputy finance minister said any regulation of Bitcoin would have to involve international cooperation to avoid opening up loopholes that traders could exploit.

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MtGox, one of the biggest Bitcoin exchanges, has gone offline.

MtGox has been hit by technical issues and recently halted all customer withdrawals of Bitcoin after it spotted what it called “unusual activity”.

The move is a setback for backers of Bitcoin, who have been pushing for greater adoption of the currency.

Meanwhile, six other major Bitcoin exchanges issued a joint statement distancing themselves from MtGox.

The move by MtGox to halt withdrawals had resulted in a sharp decline in the value of Bitcoin.

“This tragic violation of the trust of users of MtGox was the result of one company’s actions and does not reflect the resilience or value of Bitcoin and the digital currency industry,” the exchanges, including Coinbase and BTC China, said in a statement.

“As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.

“We are confident, however, that strong Bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfil the promise that Bitcoin offers as the future of payment in the internet age,” they added.

MtGox halted transfers of the digital currency to external addresses on February 7.

MtGox has been hit by technical issues and recently halted all customer withdrawals of Bitcoin

MtGox has been hit by technical issues and recently halted all customer withdrawals of Bitcoin

The Tokyo-based firm said it had found a loophole that thieves could use to fool the transaction process into sending double the correct number of Bitcoins.

The issue also left it vulnerable to attacks, which slowed down the rate at which coins could be bought and sold.

The loophole was also thought to have been exploited by thieves, who stole about $2.7 million in Bitcoins from the Silk Road 2 website earlier this month.

However, last week, the exchange said that customers would be able to starts withdrawals “soon”.

So far, MtGox has not issued any statement about reasons behind the site going offline and whether it would be back.

However, one report claimed that MtGox had become “insolvent” after losing 744,408 Bitcoins – worth about $350 million at Monday’s trading prices.

Unlike real currencies, Bitcoins are not regulated by any central bank or government financial institutions.

They are created as part of a technique called “mining”, which is used to process transactions.

With only a limited number or Bitcoins in circulation, their price has risen significantly in recent months driven by a variety of factors.

Some have been betting that the digital currency may get the backing of regulators as a legitimate financial service and have been investing in it.

Their popularity has also been driven in part by it being difficult to trace transactions carried out using Bitcoins, and the currency has been linked to illegal activity online.

Its growing popularity has seen backers of the currency push for greater mainstream adoption. They have had some success with a few firms starting to accept Bitcoins as a form of payment.

However, there have also been concerns over the currency’s long-term future, not least due to a lack of proper regulation and laws.

At the same time, some have warned that the rapid surge in Bitcoin’s price was merely due to speculation and was not sustainable.

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MtGox chief executive Mark Karpeles has quit the board of the Bitcoin Foundation, which oversees and develops the virtual currency software.

It comes shortly after Bitcoin exchange MtGox halted transfers of the digital currency to external addresses after it spotted what it called “unusual activity”.

The halt resulted in a sharp decline in the value of Bitcoins.

Last week, MtGox – one of the largest Bitcoin exchanges – said customers should be able withdraw funds “soon”.

Meanwhile, all tweets on MtGox’s Twitter account have also been deleted.

The Bitcoin Foundation said that Mark Karpeles’s resignation would be “effective immediately”.

MtGox chief executive Mark Karpeles has quit the board of the Bitcoin Foundation

MtGox chief executive Mark Karpeles has quit the board of the Bitcoin Foundation

It is the foundation’s second high-profile resignation in the past month.

Another board member, Charles Shrem, stepped down in late January after being arrested and charged with money laundering in connection with his Bitcoin company.

Charles Shrem, the chief executive of New York-based Bitcoin exchange BitInstant, has pleaded not guilty.

The issues with MtGox had sparked a dispute between the exchange and the Bitcoin Foundation.

The Tokyo-based firm said that its investigation into the unusual activity revealed a loophole that could be exploited to fool the transaction process into sending double the correct number of Bitcoins.

It also left it vulnerable to attacks, which slowed down the rate at which coins could be bought and sold.

As it halted the withdrawals, MtGox had suggested that a flaw in Bitcoin’s underlying software was to blame for the problem.

Silk Road 2 says it has been hacked resulting in the loss of all its customers’ Bitcoins.

An administrator for the anonymous online marketplace said hackers had manipulated computer code enabling them to withdraw $2.7 million worth of the virtual currency.

It follows similar attacks on two exchanges that trade in Bitcoins earlier in the week.

Silk Road 2 is known for selling drugs and other illegal items.

The site is only accessible through Tor, a network that allows users to browse anonymously online. The virtual currency Bitcoin is often used in transactions as it also grants users a degree of anonymity.

The original Silk Road site was shut down by the FBI in 2013 but those behind it said they would start a new site and shortly afterwards Silk Road 2 appeared online.

In a statement posted on Silk Road 2 forums, the administrator of the site, known as Defcon, said: “We have been hacked.”

“Nobody is in danger, no information has been leaked, and server access was never obtained by the attacker.

“Our initial investigations indicate that a vendor exploited a recently discovered vulnerability in the Bitcoin protocol known as <<transaction malleability>> to repeatedly withdraw coins from our system until it was completely empty,” he said.

Silk Road 2 says it has been hacked resulting in the loss of all its customers' Bitcoins

Silk Road 2 says it has been hacked resulting in the loss of all its customers’ Bitcoins

Transaction malleability involves someone changing the cryptographic code – known as a transaction hash – used to create an ID for the exchange of funds before it is recorded in the blockchain – a database of every transaction carried out in the currency.

This method can result in the system thinking a transaction has not been carried out when it has and therefore repeatedly paying out Bitcoins.

The two exchanges hit by attacks earlier in the week, MtGox and Bitstamp, had suspended transactions to prevent it happening again.

Defcon admitted that Silk Road 2 should have done the same.

“I should have taken MtGox and Bitstamp’s lead and disabled withdrawals as soon as the malleability issue was reported. I was slow to respond and too skeptical of the possible issue at hand,” he said in the forum posting.

On CoinDesk, a news site for digital currency, Danny Bradbury an expert on Silk Road, said that Bitcoin-based sites should put “Bitcoins under management in cold storage (i.e. stored offline) so that they could not be stolen by online attackers”.

Defcon said that all its customers’ Bitcoins were being stored online because of planned relaunches of some of the site’s features.

“In retrospect this was incredibly foolish, and I take full responsibility for this decision.”

Despite Defcon denying that he had “run with the gold”, several Silk Road 2 users questioned whether the operators of the site were involved or covering for people involved.

The site said as a result of the attack it would no longer host “escrow wallets” – an account where Bitcoins are held until goods ordered are delivered.

The chief executive of the company that runs the MtGox bitcoin exchange was confronted by an angry customer at the company’s headquarters in Tokyo this week.

Kolin Buges, a bitcoin trader from London, said he had travelled to Japan as he was unhappy at MtGox’s explanation for its recent problems on the site which prevented customers from making withdrawals.

He had 250 Bitcoins, worth $155,000 in his MtGox account.

“I want to get my Bitcoin back, or get MtGox to bring back public confidence that the company is solvent and people’s money [is] safe,” Kolin Buges told the Wall Street Journal.

One Bitcoin is currently trading for around $620, significantly lower than the $830 level it was at before news of the various attacks broke.

In an apparent clampdown on the use of Bitcoin in Russia, the Russian prosecutor general’s office said it was tightening up regulations surrounding the use of virtual currencies as they could be used for money laundering or financing terrorism.

The Russian prosecutor general’s office said that the rouble was the only official currency in Russia and introducing others was illegal.

“Systems for anonymous payments and cyber-currencies that have gained considerable circulation – including the most well-known, Bitcoin – are money substitutes and cannot be used by individuals or legal entities,” it said in a statement to Reuters.

The use of Bitcoin for alleged money laundering led to the arrests of two men in the US last week.

The Russian prosecutor general's office said that the rouble was the only official currency in Russia and introducing others was illegal

The Russian prosecutor general’s office said that the rouble was the only official currency in Russia and introducing others was illegal

The Miami-Dade State Attorney Katherine Fernandez Rundle told Bloomberg in a statement that the “arrests may be the first state prosecutions involving the use of Bitcoins in money laundering operations”.

“Bitcoins are neither good nor bad. Buying bitcoins allows money to be anonymously moved around the world with a click of a computer mouse. Improperly used, Bitcoins are often seen as a perfect means of laundering dirty money or for buying and selling illegal goods, such as drugs or stolen credit card information,” she added.

Federal charges have already been brought against the operators of two exchanges for money laundering in the US.

The value of Bitcoin has dropped sharply after MtGox – one of the largest trading exchanges – said there was a flaw in the virtual currency’s underlying software.

MtGox said it had halted transfers to external Bitcoin addresses on Friday after detecting “unusual activity”.

It said an investigation had revealed it was possible for thieves to fool the transaction process so that double the correct amount of bitcoins would be sent.

Bitcoins fell from $700 to $540.

The Tokyo-based firm said it was now working with the Bitcoin core development team to “mitigate this issue”, which it said was not limited to its own Bitcoin-wallet system.

The value of Bitcoin has dropped sharply after MtGox said there was a flaw in the virtual currency's underlying software

The value of Bitcoin has dropped sharply after MtGox said there was a flaw in the virtual currency’s underlying software

A Bitcoin wallet is the place where Bitcoin addresses – the virtual post-boxes where each bitcoin is stored -are kept.

It added that cash withdrawals and transfers of bitcoins to – rather than from – Bitcoin Wallets were unaffected.

MtGox said in a statement: “A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a Bitcoin wallet did not occur when in fact it did occur.

“Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent.”

Gavin Andresen, chief scientist at the Bitcoin Foundation – which oversees and develops the Bitcoin software – denied the problem was its fault.

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Two Bitcoin exchange operators have been arrested in the US.

The Department of Justice said Robert Faiella, known as BTCKing, and Charlie Shrem from BitInstant.com have both been charged with money laundering.

The authorities said the two operators engaged in a scheme to sell more than $1 million in Bitcoins to users of online drug marketplace the Silk Road.

Silk Road site was shut down last year and its alleged owner was arrested.

Robert Faiella, known as BTCKing, and Charlie Shrem from BitInstant.com have both been charged with money laundering

Robert Faiella, known as BTCKing, and Charlie Shrem from BitInstant.com have both been charged with money laundering

Charlie Shrem, 24, was arrested on Sunday at New York’s JFK airport. He was expected to appear in court on Monday, prosecutors said.

Robert Faiella, 52, was arrested on Monday at his home in Cape Coral, Florida.

Bitcoin exchanges are services that allow users to trade bitcoins for traditional currencies.

Charlie Shrem is accused of allowing Robert Faiella to use BitInstant to purchase large quantities of Bitcoins to sell on to Silk Road users who wanted to anonymously buy drugs.

The authorities said Charlie Shrem was aware that the Bitcoins were being used for such purchases, and therefore he was in violation of the Bank Secrecy Act.

The Act requires financial institutions in the US to alert authorities to any suspicious activity that may suggest money laundering is taking place.

Charlie Shrem is a founding member and the current vice chairman of the Bitcoin Foundation, a trade group set up to promote Bitcoin as an alternative currency.

Last year, Charlie Shrem set up a bar in New York that accepted Bitcoins.

BitInstant was one of the largest Bitcoin exchanges on the internet.

However, the service has been inaccessible for some time, explained Mike Hearn, another board member at the Bitcoin Foundation.

BitInstant’s investors include Tyler and Cameron Winklevoss – the twins who previously sued Mark Zuckerberg claiming he had stolen their idea for Facebook.