Bitcoin Weekly 2015 January 21: Coinbase $75m funding round, ChangeTip Facebook support, EgoPay vanishes, GAW Miners SEC investigation

Bitcoin Weekly 2015 January 21: Coinbase $75m funding round, ChangeTip Facebook support, EgoPay vanishes, GAW Miners SEC investigation

Bitcoin News For 2015 With SiliconANGLE

This week saw Coinbase receive the largest funding round in the history of Bitcoin-related startups, which is an amazing thing following investment trends in the Bitcoin industry. And ChangeTip adds Facebook to its stable of social media that people can send/receive bitcoin tips across.

In darker news, EgoPay, a bitcoin payment processor, appears to have become unstable in December 2014 and shuttered itself during January this year. Also, Bitcoin blog Coin Fire has published news that its editorial team has received an SEC report that the Bitcoin miner hardware vendor is under investigation.

Silk Road Trial Day 4

The trial of Ross Ulbricht continues in New York City, he stands accused of being the owner/operator (a.k.a. The Dread Pirate Roberts) of black market Silk Road, and a Reddit member who sat in on day four is offering an AMA.

The judge pretty much reversed any progress made by the defense last Thursday by ruling in favor of the prosecution regarding the testimony of Special Agent Der-Yeghiayan and Mark Karpeles.

Since Der-Yeghiayan did not witness any deal regarding Karpeles himself, the judge ruled that mention of any deal with Karpeles was inviting the jury to speculate. The judge agreed to strike any testimony from Der-Yaghiayan where he spoke to his belief about certain facts (i.e. regarding Karpeles’ deal with the Baltimore HSI office). This took out a lot of last week’s testimony, so Dratel was forced to go over old ground, but this time with one hand tied behind his back.

The prosecution objected to a huge number of defense questions, thereby making the day go very slow. Dratel reciprocated by objecting to the prosecution’s redirect vociferously.

Mark Karpeles, a.k.a MagicalTux, was the CEO of now defunct Bitcoin exchange Mt. Gox, which went bankrupt during 2014. His relation to the case against Ulbricht seemed surprising at the least when DHS Special Agent Jared Der-Yeghiayan revealed that he had investigated Karpeles for similar crimes to which Ulbricht is accused, and believed, in fact, that Karpeles was Dread Pirate Roberts (see Wired for more coverage.)

Judge Katherine Forrest ruled Friday that much of the defense cross-examination of Der-Yeghiayan was inadmissible on “haearsay” grounds.

Coinbase raises $75m in Series C funding

Bitcoin web-wallet service provider Coinbase Inc. has raised $75 million Series C funding in the largest funding round in the history of Bitcoin-related startups. This funding round was led by DFJ Growth that included The New York Stock Exchange, USAA, BBVA (Brazil), NTT Docomo (Japan), Valar Capital, Vikram Pandit, Tom Glocer and Carlos Rodriguez Pastor.

Speaking to the New York Times, Coinbase co-founder Fred Ehrsam said, “Investors still have a pretty high conviction on Bitcoin despite what the spot price of Bitcoin is doing…this really is people putting their money where their mouth is in terms of betting on Bitcoin as a technology trend.”

Update: Brian Armstrong, Coinbase CEO, interviewed with CNBC speaking to the $75 million and his vision of the future of Bitcoin. Watch the video on


ChangeTip adds support for Facebook

ChangeTip, popular bitcoin tipping service run by ChangeCoin Inc., has added Facebook to its stable of social media platforms. Already it is possible to use ChangeTip to give bitcoin tips to users on Twitter, Reddit, and YouTube.

As a tipping service, ChangeTip made news in November 2014 by exceeding 10,000 tips in one day. The service also brought in $3.3m seed funding for ChangeCoin in December last year.

Due to its ease-of-use and killer app for providing microtransactions and its connection to social media, ChangeTip has been pushing for tipping popularity. Due to this intersection of bitcoin and social media, the service has become central to a proposed Tipping Tuesday.

EgoPay vanishes in a puff of digital smoke

Bitcoin payment processor EgoPay appears to have folded up and vanished after trades abruptly ceased and client funds vanished on January 8th. Reports of complaints of aberrant behavior by the processor as early as December and substantial reports from early January leading to the shuttering of the service.

The most recent activity happed on January 15th following a change in Internet hosting. However, EgoPay has provided no response to journalists or customers.

Users discomforted by lack of access to finds found themselves met with a generic response in early January:

“EgoPay Members will be experiencing higher than normal review times for all withdrawals and deposits as EgoPay is currently conducting a system migration. EgoPay will now be able to provide a more secure netywork for all members through wihch to complate their online transfers. EgoPays standard review time frames and service level agreements will return to normal and EgoPay appreciates your cooperation and understanding.”

From current estimates the amount of money potentially missing in the EgoPay shutdown may be somewhere between $5 and $10 million.

The search for EgoPay’s owners and operators turns into an international mystery adventure that leads across continents making it feel most likely that it has been a scam since the beginning. However, with little to no information coming out of the business since the shutdown, it’s hard to find any evidence either way.

SiliconANGLE will update on this evolving news story as further information surfaces.

GAW Miners and CEO Josh Garza allegedly under SEC investigation

The mystery of EgoPay’s disappearance isn’t the only Bitcoin-related startup woe to hit the community this week. The United States Securities and Exchange Commission appears to have confirmed an active investigation into GAW Miners, CEO Josh Garza, Paybase, Paycoin, and several other “operating names” for Mr. Garza. This information is part of a 1,000 page SEC report acquired by Coin Fire to be published in a series of articles.

GAW Miners is a vendor for ASIC miners, which was founded near the end of March 2014. The vendor also launched its own altcoin, Paycoin, on December 12th 2014.

According to the report received by Coin Fire the SEC has not yet decided to take enforcement action against GAW Miners. The segments of the report published by Coin Fire accuses GAW Miners of “fraudulent conduct in the sales of securities.” This is ostensively in connection to Paycoin altcoin sales.

Ars Technica has further coverage of the Coin Fire article, but has little to add to confirm or debunk the SEC report. As of this time, the SEC has declined to comment and GAW Miners representatives have not responded to inquiries.

This follows other lawsuits against Bitcoin miner vendors including a suit against Butterfly Labs by the United States Federal Trade Commission last year over consumer fraud complaints.