This week appears to be mostly about the Bitcoin exchange ecosystem: the launch of Coinbase Exchange across the U.S., the Winklevoss twins plans for the Gemini exchange, and CoinMKT acquisition by AMX. In more grim news, a Colorado man has been accused of running an unlicensed money exchange service and CoinTerra, mining operation, is filing for bankruptcy after recent troubles with its data center.
Bitcoin market value is still hovering around the mid $200 band, with an odd flirtation with $300 on January 26 that lasted approximately five hours. The market index is still down from where it was in early January and the new lows compared to 2014 are beginning to be seen in the mining market (see below about CoinTerra, or past news about CEX.IO’s shutdown.)
All the news and more in this week’s Bitcoin Weekly.
Monday: Coinbase Exchange launched
Coinbase Inc. has launched the “first regulated bitcoin exchange” in the United States by seeking money exchange licenses in numerous states and establishing compliance with regulations. The Coinbase Exchange launched Monday and is available in 24 states and one territory.
The Coinbase exchange is available to U.S. residents of the following states and one territory: AL, AR, CA, DE, GA, ID, IL, IN, IA, KS, MA, MS, MO, MT, NH, NJ, NM, NY, ND, PR, SC, WA, WV, and WI.
The company has said there will be no trading fees through March 30th. After that grace period, fees will be set at 0.25%.
“We believe Coinbase Exchange will bring stability and trust to the exchange space,” Coinbase writes on the blog post announcing the exchange, “and are excited that large institutions like the Trading Division of SecondMarket are already trading on the platform.”
This announcement and launch comes shortly after Coinbase landed $75 million in a recent investment round that included the New York Stock Exchange.
Winklevoss twins to launch Gemini, NASDAQ for Bitcoin
The Winklevoss twins Tyler and Cameron have announced their intention to launch an exchange for Bitcoin called Gemini, named after the Latin word for twins.
The twins have great hopes for Bitcoin, including expectations that the digital currency is far undervalued. Speaking to CNNMoney, Tyler Winlkevoss elaborated on his excitement.
“If Bitcoin is a better gold or seen as a type of gold-like asset, then it could be in the trillions on a market cap,” Tyler Winklevoss told CNNMoney. “We do feel those are very real possibilities.”
The twins hope to use their upcoming exchange to bolster the Bitcoin ecosystem by adding another trusted exchange to the circuit. Exchanges currently afford liquidity to the market by giving speculators, merchants, and traders a place to transform bitcoins into local currency and vice versa similar to any other foreign currency exchange market.
While outfits such as Coinbase Inc. and Bitpay, Inc. court merchants and wallets such as Circle court consumers, each must go through an exchange in the end to move bitcoins in bulk. More established, credible exchanges will prevent the market from becoming too dependent on any single one.
ANX acquires Bitcoin exchange CoinMKT
Hong Kong-based Bitcoin services company ANXBTC.com (ANX) recently announced acquisition of Santa Monica-based West Orange Labs, Inc. (CoinMKT). The company announced the acquisition as part of expanding into new territories, including the U.S.
CoinMKT will continue to operate under its original brand, but reside under the umbrella of ANX, according to the announcement.
Colorado man arrested for running unlicensed Bitcoin exchange
With all this news of Bitcoin exchanges seeking compliance with regulation news has come down the wire about Colorado resident Burton Wagner, who has been arrested on charges of money transmission without a license.
In an indictment filed in the United States District Court for the District of Colorado the United States Attorney alleges that Wagner “did knowingly conduct, control, manage, supervise, direct, or own all or part of an unlicensed money transmitting business,” amid other crimes related to failure to follow regulatory laws such as Section 5330 of Title 31, United States Code.
The charge can hold the severity of misdemeanor or felony. The prosecution is seeking a sentence of five years in jail, a $250,000 fine and forfeiture of any property Wagner owns.
This arrest and indictment may stem from the alleged connection Wagner has to a Ponzi scheme operation called “Pirate Pass Through” offered by now disgraced Bitcoin Savings & Trust.
CoinTerra files for bankruptcy
Historically, Bitcoin market price volatility is good for exchanges, however, the recent falling value has not been good for Bitcoin miners. Cointerra Inc. filed for bankruptcy protection in Texas after the price drop made mining uneconomical.
This milestone rises out of problems CoinTerra began suffering in January when the company was sued by Utah-based C7 Data Centers Inc. for late repayment and allegations of fraud.
This is only the second in troubles for Bitcoin mining operations, which have been heralded by the suspension of mining services by CEX.IO Ltd., a cloud-based Bitcoin mining operation that includes GHash.IO.
Bitcoin market value has been in a steady decline since its heady leap to a price index exceeding $1,000 per BTC in 2013 eventually dropping below $200 again in January. The price index has since rallied up near $250, but this is not sufficient for operations that had been built with the expectation of higher returns based on previous market index.