Bitcoin, the People’s Money, Roars to All-Time High

What a comeback. The digital currency that so often has been proclaimed dead, has risen from around $163 just two years ago, to now breach the all-time high on the average price weighed index.

Bitcoin stood, across exchanges, at $1,147 in late 2013. Now, on a weighted average, it stands at $1,161, officially breaking the all-time high.

Few thought this will happen. Mired in controversy regarding transaction backlogs – a Champaign problem some say, we have too many users, how do we make space for more in a way physical resources allow – challenged too by new cool kids such as ethereum, disparaged by the more stiff upper lips who kept proclaiming blockchain, but not bitcoin – the digital currency marches, unperturbed, undeterred, proving, once more, all wrong.

It’s market now is nearing $20 billion. It finds mentions in TV sitcoms, it is accepted by Microsoft, it is patroned by that naked, unfiltered space, which keeps up the dreams of the 90s. It has the attention of PBoC. It pre-occupies, currently, the two commissioners of the SEC.

The Living Code

That is because this is not just a currency. It’s not even just a movement. Bitcoin is a network. With synapses, communication lines, a greater structure that takes all parts and forms something very new, an artificial brain with a life of its own, something we have never seen before.

Bitcoin takes all the individual, opinionated, parts and merges them, forming a holistic formidable whole. It is an organism. It lives, breaths. It thinks, metaphorically speaks.

It is served by computers in massive facilities, their power greater by far than any supercomputer. It is connected by many nodes across the world. Within it, there are debates and arguments, that’s how it grows. Outside, “cells” just decide.

No one man’s opinion controls bitcoin’s fate. However influential or prominent they might be. And if it is a group, leashing out propaganda, sockpuppets, attempting to engage in political campaigns, trying to centralize all things, why, bitcoin has no center.

It’s impossible. They only fool themselves. This currency cannot be hijacked. This currency cannot be controlled. There cannot be coups here. There cannot be proclamations or dictats. For, it is only by the will of the people bitcoin lives. Only by the wisdom of the crowd bitcoin roars or dies.

The Formidable Phoenix

I was here, though not participating, in 2011, when positive opinion sent bitcoin up to $30, to then crash due to a hack of an amateur and incompetent exchange. It stood at $2 for almost two years.

I was here too when it roared, rising at $266, to then crash again due to the above centralized and amateur MT Gox exchange. It inspired a decentralization of exchanges. There are many now, but Gox was not done.

I was here, too, when they announced their bankruptcy and misled the public in stating all, almost one million, bitcoins had been lost. That wasn’t true. I announced, with concrete evidence, they still had 200,000 bitcoins, forcing them to reveal their hidden holdings, which eventually they admitted, worth at the time and now more than $200 million.

I saw the currency in 2014 go down and down to around $160, but what a story for it to come back and now roar louder than ever.

The People’s Money

How can it not? It’s the people’s money. It’s the first free market backed currency. It has no central control, whatever some may believe in their stupid thoughts. It cares for no one’s opinion. It operates not under anyone’s permission. It’s a living, breathing, thing, with a life of its own.

Bitcoin operates solely under what is obvious and self-evident. Its complicated mechanism ensures objectivity. Its security based on the fundamental assumption that 51% of people are honest. An assumption we must take for granted for otherwise how could we have ever advanced to become what we have.

Yet, some try, but whether individuals, groups, cliques, governments or multinationals, they can say or do what they please, bitcoin cares not. Many may attempt to censor or ban, try to impose their ideology or opinion, try to force matters, propagandize, even smear, but bitcoin shrugs it off, like dust on a coat.

It roars, instead, above it all, for it is the people’s voice. The people who are taking back their rights and imposing what is obviously good – the true value of market prices, free from any manipulation, guaranteed by code, governed by us all.

It is a right, long denied, but now some genius has forced and gifted us.  No one, no group, can do anything about it. Not governments, not popes, not charlatans, not so called experts, no one at all.

Roar, bitcoin, roar.

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Bitcoin P2P Lending Platform Bitbond Raises $1.2 Million in Equity Funding

Bitbond, a German peer-to-peer bitcoin loan platform closed an equity funding round of $1.2 million in new capital as it looks to fuel user growth in potential markets.

As a platform to connect lenders and borrowers, Bitbond facilitates loans in bitcoin by checking the credit-worthiness of applicants while studying the purpose of the loan to determine the interest rate for the loan. Notably, the platform uses the Bitcoin blockchain for payment processing to facilitate cross-border lending.

A large proportion of Bitbond’s borrowers are usually online sellers with storefronts on e-commerce sites like Amazon or eBay. The borrowed sums are used for inventory and working capital. Credit checks are performed based on the revenue data of merchants.

Berlin-based Bitbond has now raised a total of $2.3 million in funding. The latest founding round was led by Şekip Can Gökalp, who formerly founded Turkish mobile ad network Mobilike. Other angel investors participating in the funding round included mobile advertising firm Fyber’s founders Janis Zech and Andreas Bodczek as well as Alexander Graubner-Müller, CEO and co-founder of German online lender and Fintech firm Kreditech.

Bitbond founder and CEO Radoslav Albrecht stated:

The additional resources will help us to continue realizing our mission which is to make lending and borrowing globally accessible. We are happy to have such experiences investors supporting us on this exciting journey.

The bitcoin startup received EUR600,000 in an angel funding round in mid-2015 following its launch in 2013. The company has come a long way since. Over 1,600 loans worth $1.2 million have originated on Bitbond since its launch and the platform claims to service 76,600 registered users from 120 countries.

In previous comments to CCN, Bitbond representative Chris Grundy added that the platform also follows up with measures to ensure repayment of loans. “This starts with emails and phone calls, in the case of late repayments, and can culminate in the involvement of debt collectors to regain the owed sum,” Grundy revealed.

Bitbond’s growth in the global bitcoin P2P lending market is in contrast to that of another lending platform BitLendingClub, which cited regulatory hurdles as the reason behind its decision to shut down a number of services. Meanwhile, Bitbond is now operating with a regulatory license issued by Germany’s financial regulator BaFin, issued in October 2016. The license allows the bitcoin startup to operate independently of banks.

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Spice Haven Sichuan is Quickly Becoming China’s Bitcoin Mining Capital

China’s province of Sichuan is known for its spicy food flavors. Now, though, it’s becoming known as something else: a bitcoin mining capital.

It was in 2013 that China was first thought to have discovered bitcoin and since then the country has been making up for lost time in mining the digital currency.

What, though, has that got to do with the province of Sichuan?

Well, according to the China Money Network, since 2015, over 30 percent of China’s bitcoin mining machines have been purchased from the Sichuan province. Considering that around 70 percent of bitcoin’s global computational power is located within China, this southwestern region located between the Himalayas and the Yungui Plateau is making a name for itself as the bitcoin mining capital. And it’s not hard to see why this is the case.

According to the report, Sichuan’s Mabian Yi Autonomous county has a population of around 200,000 people and accounts for 10,000 bitcoin mining machines working around the clock for the digital currency.

So Why Sichuan?

For a bitcoin mining machine to mine for the digital currency it needs electricity, but it’s an expensive business as electricity can make up as much as 60 percent to 70 percent of the mining.

To avert this problem, the mining machines are found in Sichuan became it provides cheap electricity through its hydroelectric power plants. To take advantage of these cost saving measures many bitcoin mining companies have positioned themselves next to the plants.

Is It Worth It?

One of the companies with mining machines in Sichuan is Mabian Tianjia Network Technology Co., Ltd. It’s reported that the company can produce as many as 27 bitcoin per day from its 5,800 mining machines, which is $30,774 based on the current price of bitcoin at $1,139.

And yet, before rushing out to buy a bitcoin mining machine, the costs involved are high. Electricity bills can cost thousands of dollars while the profitability of bitcoin remains uncertain with the price of it remaining highly volatile.

One must note, however, that when it comes to the digital currency, the Chinese put their full effort into it.

But even though the price of the currency has risen and fallen over the last few years in China while the People’s Bank of China (PBOC) has recently laid a heavy hand on the currency, as L H Li, the former president of the Bank of China, recently said: ‘it’s impossible to kill bitcoin.’

Featured image from Shutterstock.

Danish Police Proclaim ‘Ground-Breaking’ Bitcoin Tracking System

Denmark’s cybercrime police unit has claimed to have developed a specialized software system to track bitcoin transactions, one that has led to the prosecution of drug traffickers.

The revelation comes to light a report by regional news publication Berlingske. According to the report, a specialized IT system developed by the Danish National Cyber Crime Center (NC3) is described as “ground-breaking” by Kim Aarenstrup, the head of the unit. The report further adds that the same system has been used by the FBI and Europol.

“The potential of this is groundbreaking. The investigation can now proceed from where it used to stop before,” Aarenstrup said.

In roughly translated statements, Aarenstrup told the publication:

We are pretty much unique in the world at this point, because there aren’t really any other agencies who have managed to use these [bitcoin] trails as evidence in the past. Every is looking toward Denmark ins this field and we are now in close dialogue with a number of other countries right now, so we can further develop our methods and teach them how we do it.

While details of the workings of the ‘special software’ remain scarce, the mechanism reportedly correlates two separate transactions where bitcoins used to purchase illegal goods are matched against those listed on the blockchain, which are then compared with listings of the marketplace and other information about users. That’s about the extent explained by Jesper Klyve, the prosecutor involved in the cases where the tracking software led to the convictions of drug traffickers last month.

“All [bitcoin] transfers that have ever been made are coded into the bitcoin-system [blockchiain]. Therefore, you can, at any time, log in and search in the system to try and identify individual users” he told the publication.

One of the trafficking cases involved a Danish man in his 20s who purchased large quantities of methamphetamine, cocaine and ketamine on andark web marketplace.

Contrary to the popular notion that bitcoin transactions are anonymous, its pseudonymous nature leaves every transaction open to anyone looking into the public blockchain. While the wallet addresses are public – leaving every transaction openly traceable – they are not tied to any personally identifying information on the blockchain.

However, the very nature of traceable transactions leaves room for bitcoin blockchain surveillance firms like Elliptic to work with law enforcement agencies to curb online criminal activity that abuses bitcoin. Perhaps notably, Elliptic CEO James Smith stated “Bitcoin is too transparent”, adding that his firm studied major darknet drugs markets like Alphabay, every day.

Paycoin’s Josh Garza Continues to Delay SEC Trial

It’s been a long time since we’ve heard much from Josh Garza. At last glance, he was facing charges of fraud from the Securities and Exchange Commission and much of his army of GAWesome supporters had gone silent. The SEC case continues, and earlier this month Garza finally responded to the charges with a long-winded “pleading of the fifth.” This response to the allegations comes after numerous requests to delay the case, the contents of which are mostly sealed.

“Accordingly, on the advice of counsel, Defendant respectfully declines to answer the allegations set forth in the Complain, based on his rights under the Fifth Amendment to the United States Constitution.”

At the end of the filing, however:

Defendant reserves the right to amend this Answer upon the resolution of any criminal investigation or related proceedings.

This last bit is clearly intended to allow Garza a chance to later plead out of the case while giving away nothing at present.

The case has largely fallen off the radar of cryptocurrency enthusiasts, who’ve become more engrossed in the various aspects of Bitcoin’s block size debate as well as the stellar growth in the price of Bitcoin which have both happened during the intervening months.

For this reason, this writer, who covered the scandal in depth culminating in a full-scale rebuke of the dozens of individuals who consciously defended Garza’s every move up until the bitter end, will quickly give the reader the rundown of the GAW Miners Hashlet scam.

• GAW Miners began as a hardware provider. Their hardware was largely rebranded Chinese equipment, but at this time they were at least delivering tangible products.
• In August of 2014, GAW began selling “hashlets,” or virtual mining contracts. According to the SEC, Garza and his cohorts knowingly falsified claims in regards to said hashlets and their actual return-on-investment. Additionally, GAW faces an ongoing lawsuit in Mississippi for unpaid electrical bills. Like nearly all virtual mining, Hashlets would later prove to be not just unprofitable but for many, a total loss.
• According to the SEC, at least 10,000 users were fooled out of bitcoins.
• Around December, 2014, Paycoin (XPY) was launched. Paycoin was a poorly modified fork of Peercoin which had the added feature of “prime nodes” which would receive insane interest payments. These prime nodes were issued primarily to members of GAW Miners as well as a few loyal community members. During the run-up to launch, Garza touted that Paycoin would sell for $20 per coin. Later, Paybase, a related effort, offered a “repurchase” program which never actually happened. Today, the totality of Paycoin, which was eventually taken over by its disparate community, has a value of around 25 bitcoins. Were it to be actually worth $20 per coin, this net worth would actually be closer $233M, or 233,000 BTC.
• The amplification of the scandal surrounding Paycoin coincided with the failure of its primary, most vocally supportive exchange, Cryptsy. Up until that time, Cryptsy was one of the largest trading platforms for alternative cryptocurrencies. While ShapeShift.io quickly delisted Paycoin after “fraud concerns,” Cryptsy listed the currency until its last gasp. It is important to note that Cryptsy was an owner of a prime node. Pseudonymous CCN writer Hiro Nakamura cautioned Cryptsy to get away from Paycoin, to no avail. Thus far there has never been a linkage of the Paycoin scandal and the exit scam of Cryptsy, but the two happened with such coincidence that it is hard not to draw a straight line.

At CCN, our memory is long and we look forward to soon reporting on the outcome of Garza’s SEC trial. There is not much that can be done for those who were repeatedly warned against doing business with anything Garza touched, but we can help to ensure that no future cryptocurrency project fomented by him or his cohorts goes unnoticed.

Featured image from Shutterstock.

The Bitcoin ETF Will Be Rejected According to Prediction Markets

The much-anticipated bitcoin ETF, which has been going through the bureaucratic process for now more than three years, will likely be rejected according to a Bitmex prediction contract launched almost two weeks ago.

Since its listing, the market has always given Winklevoss’ ETF a less than 50% chance, usually standing at around 40% for much of the past week, falling to as low as 18% yesterday.

The Bitcoin ETF has only a 24% chance of approval according to a prediction contract – image from Bitmex

There were suggestions its sharp drop was due to a bug, but Greg Dwyer, Business Development Manager at BitMEX, told CCN:

“There have been no bugs with the ETF prediction market and it is operating exactly as intended. It is currently trading in a range between 24 – 37%. That is, the price represents the probability of the ETF being approved by the SEC come March 11.”

Spencer Bogart, Vice President of Equity Research for Needham & Co, gave the ETF only a 25% chance of approval.

The main reason appears to be due to bitcoin’s volatile nature, but stock markets have previously crashed, some company stocks have instantly become worthless and some have instantly jumped in price.

Furthermore, Kevin Lu, a hedge fund analyst, describes in a detailed article for Seeking Alpha how “Bitcoin is a unique, uncorrelated asset class… and that makes bitcoin extremely desirable from a portfolio construction perspective.”

The SEC’s thinking on the matter is not quite clear. We have reached out for comments, but have received no response in time for publishing.

SEC personnel has just changed or is in the process of changing. As such, the decision might be made in somewhat chaotic circumstances with the new personnel potentially not fully up to speed on the fairly complicated matter.

To illustrate, SEC’s page still lists the old chair, but President Trump has chosen a new nominee, Walter J. Clayton, described by the New York Times as “the Wall Street Lawyer” and as “the insider’s insider.” It further states:

“He had a front-row seat to the financial crisis, advising Barclays Capital in buying the assets of the bankrupt Lehman Brothers in 2008 and Bear Stearns in its fire sale to JPMorgan Chase in 2007. He has advised on mergers and initial public offerings, including the biggest ever, the $25 billion offering by Alibaba Group of China in 2013.”

Whether that experience makes him more favorable to bitcoin or more against it, remains to be seen, but the new administration does have some bitcoin supporters in its cabinet and emphasizes de-regulation with the aim of fostering economic growth. However, Clayton himself, a law graduate, has not previously made any comments on bitcoin.

He will soon be familiar with the digital currency, if he is not already, and will most probably be a very influential figure in this space. The ETF decision, whether approved or rejected, will have considerable implications. Equally, and perhaps more importantly, he might eventually want to give some sort of guidelines on the currently booming ICO markets.

Finally, the new administration might wish to allow margins and futures trading on regulated exchanges such as Coinbase and Gemini for its refusal by inaction so far has forced many to use somewhat shady and seemingly amateurish exchanges which has led to losses, opening the relevant agencies to criticism for failing to protect the public and worse, for indirectly causing the losses.

Whether they will take any such action is too early to say, but we might soon get a glimpse of the new administration’s approach towards digital currencies, the blockchain space and, more widely, the Fintech industry.

Image from Shutterstock.

New Zealand Court Rules Kim Dotcom Can Be Extradited to the U.S.

New Zealand’s high court has ruled that accused Internet pirate Kim Dotcom can be extradited to the United States, according to stuff.co.nz, a New Zealand news site. Dotcom’s lawyer said he will appeal to the Court of Appeal.

The U.S. claims Dotcom, a long-time bitcoin advocate, and associates Finn Batato, Bram der Kolk and Mathias Ortmann engaged in money laundering and copyright infringement, costing copyright holders more than $500 million.

Largest U.S. Copyright Case

The case has been called one of the largest copyright cases brought by the U.S.

Today’s ruling comes more than five years after authorities raided Dotcom’s Auckland residence. The court ruled that the evidence established a case against Dotcom. It also ruled in favor of one of Dotcom’s claims – that online communication of copyright-protected material is not a criminal offense in New Zealand.

The court’s decision came in response to Dotcom’s appeal against a 2015 ruling that he and his associates should be surrendered to the U.S.

Dotcom and company appealed the 2015 ruling, claiming the judge erred in all aspects. The U.S. also appealed aspects of the judgment.

Ron Mansfield, Dotcom’s attorney, said he is confident the case would be resolved in his client’s favor.

Judge Addresses Copyright Law

Justice Murray Gilbert accepted Dotcom’s argument that online communication of copyright-protected material is not a criminal offense in New Zealand. The judge ruled that contrary to the district court’s views, this section of the law provides no extradition pathway in Dotcom’s case.

The judge also found that the appellants are wrong in asserting the general criminal law fraud provisions cannot apply in copyright infringement cases but only under the Copyright Act.

The judge said he agreed that the evidence in the case establishes evidence on all accounts.

Mansfield claimed the decision indicated that Dotcom did not commit an offense under New Zealand’s copyright law.

Dotcom tweeted that he is getting extradited for a law that does not apply and that he is no longer getting extradited for copyright. He also said he expected the case to last for at least two more years.

Also read: Kim Dotcom extradition trial starts & he brings his own ejection seat

U.S. Court Indicted Dotcom

Dotcom and his associates were indicted by a grand jury in the Eastern District of Virginia for the file-sharing site Megaupload. The indictment, dating back to January 2012, led to an FBI shutdown of Megaupload and then the raid at his home. They accused Dotcom of copyright infringement, racketeering and money laundering.

Three years later, Dotcom and three associates faced an extradition hearing despite the fact that Dotcom claims never to have lived, visited or incorporated in the U.S.

Dotcom has fought the allegations in the court of public opinion. In a white paper he links to on social media, the case is framed as “The US vs You (and Kim Dotcom).”j

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Digital Currencies Need Regulation to Grow

Researchers from the Bank of Canada maintain that digital currencies such as bitcoin need government intervention for it to flourish long-term.

The report, Canadian Bank Notes and Dominion Notes: Lessons for Digital Currencies [PDF], examines the period in Canada when private bank notes and government issued notes or ‘Dominion’ notes were in circulation at the same time in the 1800s.

The report states that because the notes shared the same characteristics of today’s digital currencies, it can draw from the experience as to how today’s digital currencies might function. It adds that private digital currencies are likely to be counterfeited too. However, while a central bank can issue its own digital currency, it finds that doing so is unlikely to push out private alternatives.

The report’s authors state:

We conclude that well designed and managed private digital currencies could circulate widely but only with appropriate government regulation to ensure their safety, soundness, and uniformity.

CAD-Coin

First revealed in June 2016, although it was first proposed in 2014, the Bank of Canada confirmed that it was working on its own digital currency prototype known as the CAD-Coin. In partnership with some of Canada’s biggest banks and R3, it was announced that this would be the digital equivalent of the Canadian dollar.

Since the prototype, details of the experiment are yet to be revealed; however, according to Carolyn Wilkins, Bank of Canada senior deputy governor, central-bank issued currencies play a significant role in financial stability and function as a ‘transmission mechanism for monetary policy.’

In her opinion the digital currency bitcoin is viewed more of a commodity rather than a money itself despite the fact that this was the currency that provided the building blocks for the Bank of Canada to develop its CAD-Coin.

Government Regulation

The whole point of bitcoin’s existence and the fact that it remains the most popular digital currency is down to the fact that it’s an unregulated and decentralized currency.

The fact that the Bank of Canada believe that the currency needs government regulation for it to flourish in the long-term is unlikely to go down well with the general populace, and is unlikely to happen anytime soon.

Not only that, but given that a bank-issued digital currency such as the CAD-Coin is unlikely to force bitcoin out illustrates the impact the currency has produced in its relatively short life-span.

As an alternative digital currency that people are using there are many who would say that it’s more money than commodity.

Featured image from Shutterstock.

Nigerian Retail Banking Sector to see 92% Disruption by FinTech

A report has shown that retail banking and fund transfers in Nigeria are the two biggest areas that are most likely to be affected by FinTech over the next five years.

The report, Nigeria FinTech Survey 2017 [PDF], which was released by PricewaterhouseCoopers (PwC), found the likelihood of disruption within these two areas amounted to 92 percent and 85 percent respectively.

Over the last few years, the banking and payments sub-sectors have experienced a large amount of disruption with new technology-driven payments applications and processes as well as innovative digital applications that aid simpler payments, and an increase in the use of electronic devices to transfer money.

FinTech is quickly evolving within the financial services sector which is seeing an increase in the number of technology-focused startups and other entrants changing how the industry works.

In Africa, FinTech investments are estimated to have increasde by a compound annual growth rate of $200 million from 2014 to $800 million in 2016. According to the report, this could potentially increase to a value of $3 billion by 2020, with Nigeria and South Africa receiving a significant portion of the investments.

Changing Customer Needs

The report found that financial services in Nigeria see changing customer needs as the main impactor FinTechs will have on their business. It revealed that 60 percent of those surveyed believe that as much as 40 percent of financial services firms will be at risk by 2020.

With 85 percent of the African population owning a mobile phone and Nigeria leading the world in mobile share of web traffic at 82 percent, financial service industry players need to embrace the digital experience offered by companies such as Facebook, Amazon, and Google, to ensure their customers get the same level of experience from their financial service providers.

Deji Oguntonade, head of the e-Payment Solutions Group, Guaranty Trust Bank Plc, said that FinTechs are more agile and are not bogged down with legacy issues from infrastructure, culture, and manpower perspectives.

He said:

They are therefore more open to try out new technologies and provide customers with endearing products and services in a much quicker manner. It would therefore be good for banks to partner with FinTechs and take advantage of their agility.

Blockchain: An Untapped Technology

Although the technology demonstrates a lot of promise, several challenges and barriers to adoption remain such as cybersecurity, privacy concerns, and restricted governance over decentralized networks.

As such, compared to other trends blockchain ranks lower on the agenda. While respondents recognize the blockchain’s importance, they are unsure of how to or unlikely to respond to this trend.

The survey found that 45 percent of respondents within banking are ‘moderately’ familiar with it while only a few consider themselves to be experts. This lack of understanding could lead market participants to underestimate the impact the blockchain could potentially have on their activities.

Featured image from Shutterstock.

WWII Veteran Didn’t Want Bitcoins in Alleged £10,000 Pension Scam

An odd courtroom drama played out at the Hastings District Courtroom in New Zealand today. The judge-only trial involved a 95-year-old WW II veteran and a 48-year old American migrant promising returns on investment with bitcoins exchanged from the veteran’s £10,000 RAF pension fund.

As reported by regional publication Stuff, local police alleged that Roy Toler, a 48-year-old American migrant in New Zealand had taken the pension funds belonging to 95-year-old Geoff Bibby, a Lancaster Bombers navigator of the Royal Air Force during World War II, to invest them into bitcoins without the veteran’s knowledge.

The Judge heard that Bibby wanted to transfer his RAF pension fund of £10,000 from the UK to his new adopted home in New Zealand in late 2015. However, traditional banking charges or wire transfer fees put off the veteran who began looking for other solutions.

Bibby was a navigator of the Lancaster bombers (pictured above) during World War II.

An acquaintance introduced Bibby to Toler who, according to Bibby, claimed he could transfer the funds with no fees and that they would credit Bibby’s account within eight working days.

For his part, Toler denied the claim and instead stated that he had told the veteran about bitcoin instead. According to him, Bibby had agreed to invest his pension into the cryptocurrency.

As reported by the publication, Bibby stated in court:

I had absolutely no intention of investing the money. He mentioned something about Bitcoin, but I wasn’t interested. I thought it was a load of codswallop and I couldn’t understand it.

The funds were transferred to an account held by a limited company of which Toler was sole director, in October 2015. There was no written agreement about the transfer of funds. Two months later, all of the money was spent by Toler.

Toler told the Judge that he held USD$45,000 in bitcoins and that he had put a portion of this amount in ‘Bibby’s name’, according to the publication, in exchange for the pension fund.

Toler claimed his bitcoin account was hacked soon after the pension funds had arrived, adding that he hasn’t been able to recover these lost bitcoins since.

Bibby, who did not see the funds credit his account, persevered for a whole year asking Toler about his pension funds, to no avail. Finally, he went to the police.

A short while after, Toler gave Bibby a bank cheque for NZ$22,500.

Judge Bridget Mackintosh reportedly pointed to ‘well-publicised skepticism’ about bitcoin’s integrity, noting that the ‘Bitcoin scheme’, as stated by the publication, seemed very complex.

Toler is charged with obtaining (money) by deception and Judge Mackintosh has made no ruling yet, reserving her decision in court today.

Images from Shutterstock.