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Timothy Massad Says CFTC Has Legal Supervision on Bitcoin

By Forexminute - Deepak Tiwari | Bitcoin | Dec 12, 2014 9:52PM GMT




In a testimony before the US Senate Committee on Agriculture, Nutrition and Forestry the chairman of the US derivatives regulator has said that digital currency derivatives fall within his agency’s remit. The testimony from Timothy Massad, who chairs the Commodity Futures Trading Commission (CFTC), may not please many Bitcoin stakeholders.

He said that while his agency does not have specific rules governing digital currencies, it would oversee futures and swaps in any commodity and this includes digital currencies. According to him the agency’s authority extends to futures and swaps contracts in any commodity, derivative contracts based on a virtual currency represent one area within the responsibility.

Interestingly, Bitcoin is a digital currency which does not fall under any jurisdiction and cannot be controlled by any government agency for that matter; this is its special feature. However, with the attempts on the part of various government agencies in the US in the last one or so years sound a desperate attempt to regulate it.

According to Mr. Massad the CFTC defines commodities “very broadly” and the term is not limited to agricultural commodities like metals and energy, but also includes derivatives linked to stock market indices, currencies and electricity. Thus, in his views digital currency derivatives are a form of innovation that his agency wants to encourage.

The Agency Aims to Stop Manipulation and Fraudulent Activities in Bitcoin Ecosystem

However, he is of firm opinion that his agency is also tasked with enforcing consumer protections and preventing manipulation and fraud and that is where the role comes in. The CFTC chair referred to TeraExchange’s Bitcoin swap as an example of a digital currency derivative that fell within his agency’s oversight.

Similarly, New Jersey-based TeraExchange received approval for its swap from the CFTC in September. According to Mr. Massad innovation is a vital part of the markets, and it is something that the regulatory framework is designed to encourage. At the same time regulatory framework is intended to prevent manipulation and fraud.

Thus, according to him to make sure that markets operate with transparency and integrity, the jurisdiction must be expanded. Though some market participants welcomed Massad’s comments, some others think that his statement was too broad to be interpreted clearly.

According to them more specific comments from the regulator would be required before market participants could be sure about the impact of possible regulation.


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US stocks dropped on Friday putting the S&P 500 on track to snap the seven weeks of gains with oil prices dropping to fresh lows of five years after disappointing China data.

The S&P 500 ended the day 1.6% lower to $2,002.70, taking the losses for the week to 3.5%. The last time that it suffered such a decline was in May 2012, as reported by The Financial Times.

The Dow Jones Industrial Average declined 1.8% or 312 points to 17,284.30 while the Nasdaq Composite finished the day 1.2% lower or 54.56 points at 4,653.596.

Weak prices of oil have increased worries of global demand and have raised concerns on earnings about earnings for energy companies with the year-end tax selling putting more pressure on the energy sector.
According to Reuters, Brent crude dropped to lows of $62.75, the lowest from Jul 2009 and it was last down 0.6% at $63.30. WTI crude declined below $60 per barrel and it was last down 1% at $59.37 as worries increased over the global supply glut and a sluggish demand outlook. The Select Sector Energy ETF dropped 0.8% in premarket trade.

Adding to the pessimism was the data showing that the Chinese economy showed signs of softening in November as factory growth slowed more than expected and investment expansion hovered near a low of 13 years.

Adobe systems increased 7.5% to $75 in premarket after the company said it would buy stock photography company Fotolia for $800 million and reported quarterly revenue that was above market estimates.

European shares dropped with further declines in oil prices hitting energy stocks, while political concerns over Greece also pegged back equities.

Asian shares got a boost after upbeat US spending data suggested weaker prices of oil have some upside for the US economy.


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Due to Sluggish International Sales Overstock.Com Fails to Complete Bitcoin Sales Target for 2014



As the international sales were not on the expected lines, the international retail giant Overstock.com is reporting that it expects to complete $3m in total Bitcoin sales for 2014 which are below than the expectations. In March, CEO Patrick Byrne had suggested the company was on pace to achieve $10m–$15m, or even $20m, in Bitcoin sales.

When the company decided to embrace the digital currency Patrick Byrne had kept a higher target that could have gone up to $10m–$15m, or even $20m, in Bitcoin sales. Judd Bagley, director of communications and general manager of Overstock’s Cryptocurrencies Group, confirmed, however, that the company had expected a higher figure than $3m.

Talking to media Bagley admitted that while they were still very happy with sales to customers paying with Bitcoin, the numbers didn’t meet the initial expectations. According to the company reports in total, roughly 11,100 customers have so far paid with Bitcoin at both its US and international websites.

This should have not disappointed the company though as this year has been traumatic for Bitcoin investors wherein the prices fell to record levels after reaching to above $1000 in October the last year. This year the Bitcoin prices fell below $300 and for a long time the exchange rate has been below $400.

50% of Bitcoin sales completed by customers who had previously not shopped with it

The decline of Bitcoin has been alarming for a lot of investors and some analysts even call it the worst investment of 2014. When Overstock decided to accept Bitcoin, it became one of the largest merchants to do so. The decision provided widespread publicity for Bitcoin and sparked an uptick in interest among US and international merchants.

However, thanks to sluggish international sales the company was not able to achieve its targets. Though it $3m total earnings from Bitcoin sales, the company has not confirmed how much of it is from international customers. The company stressed that it has seen significant gains, and more importantly, no drawbacks, from its support of the Bitcoin ecosystem.

Overstock informs that 50% of its Bitcoin sales were completed by customers who had previously not shopped with it. Looks the company indeed received Bitcoiners; however, it has also to be kept in mind that though it decided to accept Bitcoin in January, the actual transactions started only in late April.



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Last 24 hours in the cryptocurrency market were as bad as the previous ones. Look further to know why.

BTC/USD


Bitcoin market is entering into its worst phase since the early November. The price has already broken below its key support level around 340, and is now putting pressure on 320 to hold the price from falling into a bearish breakout. As you can see the 4H BitStamp chart above, the selling pressure has been monumental in last few hours, and the market has formed a bearish flag. In the meantime, the price continues to stay in an oversold territory, without the hint of any bullish correction. This is disaster!

In the meantime, we cannot rule out the possibilities of a possible bounce back from the bottom which, at this point of time, seems to be located around 300-310. There the price could be reversed to start another rally, but still it is unlikely to go beyond 340, which is looking like a stronger resistance level for now.

The price is currently below each and every SMA and EMA, while the RSI is near 18, indicating an oversold area. Bitcoin needs a bull-whale!

LTC/USD


Still a little better than Bitcoin, the LTC/USD is trending downwards amid a strong selling pressure. The price is currently below the 200-, 100- and 50-hours SMA, while the RSI is around 30 on 4H BTC-e charts. It overall indicates a possible bearish breakout in next few hours, with 2.75 being the only hope to hold the price to start another rally.

In case bulls find the bottom as an opportunity to buy back into the market, we could expect LTC/USD to test 3.02 as the next resistance level, though the market will still find it difficult to escape from the bearish bias it is in. In case they don’t, the next downside risk will be towards 2.02.


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PeerNova Raises $8.6 M to refocus its business on Blockchain-based enterprise products




PeerNova is not new to Bitcoin; however, in order to strengthen its presence in the ecosystem, the company recently organized a fund raising event and even managed to bag $8.6 million. The company announces that it is focused towards expanding the business on Blockchain-based enterprise products.

The latest fund raising by the company is quite successful given the fact that the prices of Bitcoin have fallen dramatically in the last couple of months. This looks like the investors still have penchant for the revolutionary digital currency that according to a lot of bankers and technical experts has potential to transform the way payments are done today.

Currently, Bitcoin valuations are hovering near the sub-$300 mark which though not bad as it traded around $10 earlier the last year, is bad when compared with the exchange rate it touched in October 2013. It had then reached to $1200 in some Bitcoin exchanges and from then on a lot of experts had started predicting that it could touch $2000.
*Despite all hoopla around Bitcoin some publications have even put it as the worst investment in 2014. However, it does not seem legit when the investments are pouring in to PeerNova which is not alone in the segment as several other companies have attracted venture capitalists. They are willing to invest in startups as they see a lot of hope in Bitcoin.

The Funds Will be used to Further Expand R&D

In its press release to media PeerNova said that it will use the new funding to boost investments in research and development, accelerate the launch of its Software as a Service (SaaS) platform and expand its service delivery capabilities by growing sales, marketing and support teams.

Talking to media Miles Kilburn of Mosaik Partners said, “We are very excited about the enormous potential of block chain technology to serve as a platform to reduce friction, costs, and improve security in e-commerce financial and other transactions.” He also informed that he will be joining PeerNova’s Board of Directors.

Sharing his views on the event Dr. Naveed Sherwani, CEO of PeerNova said, “This is a significant step that further solidifies our belief in the Blockchain as the remarkable invention of the 21^st century. This investment will help us hire the best of breed in software engineering talent, expediting our development timelines.”

He said that the company will be launching our first industry-leading applications in 2015.


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Bitcoin Expo London 2015 Lines of Renowned Speakers

London is though not new to Bitcoin; the scheduled Bitcoin Expo 2015 is expected to become a huge success for the digital currency. According to the organizers of the event, “The year of 2015 will begin in a grand style in London! Investors, Start-ups, students, companies, exhibitors, entrepreneurs, enthusiasts and cryptocurrency supporters – all are invited!”

Thus, the organizers are not mincing their words to claim that the event is going to be a huge success and for that they are inviting everyone to enjoy the speeches and debates as well. They say that anyone can get the most up-to-date information from the Bitcoin industry participating the event – the event will be hosting some fruitful debates from the industry experts.

According to the people behind the event, “If you want to be a part of the monetary future, join the Start-up Show and visit the exhibitors at this wonderful event. You can register now for FREE or with our special registration opportunities for Startups and Investors.” Thus, this is one wonderful opportunity for every Bitcoin enthusiast in London they should not miss.

Coming from the organizers of the CryptoEvents that brought the Central European Bitcoin Expo Vienna, BitcoinExpo 2014 Shanghai and Bitcoin 2 Business Congress Brussels, BitcoinExpo 2015 is a free conference. Therefore, the organizers are expecting that interested parties should not miss this unique opportunity to meet top Bitcoin companies.

Attendees will be able to explore the potential available in Bitcoin ecosystem by networking with great speakers and cryptocurrency professionals. Moreover, as the number of free tickets is limited, interested parties are interested to register now.

Renowned Speakers and Industry Experts to Participate

The BitcoinExpo 2015 will be attended by some of the renowned personalities that include Marco Streng CEO, Genesis-mining; Matej Michalko CTO, Bitcoin Marketing; Adam Vaziri CEO, Diacle Ltd, John Michell Xecnet Ltd UK; Wilhelmina Jewell Strong-Sparks CEO and Founder OTGC, BiTHouse; Amin Rafiee CoinsSource and Simon Dixon CEO, BankToTheFuture.
Some other speakers like Atif Nazir CEO, Block.io; Benjamin Bommhardt Bitcoin Foundation; Mariën Glenn Founder, DogeChain.info; Kingsley Edwards Founder, Leetcoin Inc; and Christian Rotzoll CTO, DogeRain too will be putting their views at the event. Though there are no ticket prices for attendees; Attendee VIP will have to pay £12900, per head.

Similarly, Startup companies will be charged £9900 and those who fall in the category of Investor will be charged £39900.


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Following are the major Bitcoin news of the day

Charlie Shrem Found Guilty of Abetting Illicit Transactions

Charlie Shrem, founder of BitInstant and former board member of the Bitcoin Foundation, was found guilty of abetting illicit transactions to online drug bazaar Silk Road. As a result, the 25-year old Bitcoin entrepreneur received a two-year jail term. US District Judge Jed Rakoff described the sentence as “probation-only”, while refraining from imposing a harsher verdict.

“I have no excuses for what I did. I broke the law and I broke it badly,” said a broken Shrem. “No one [in bitcoin] is doing this anymore, they’re terrified… Bitcoin needs to stay away from criminals, from people taking actions that I did […] I need to be out there… helping the world to make sure they don’t do a stupid thing like I did.”
You can read the full report here.

Brazilian Senate Rules Out to Regulate Bitcoin, For Now

A new report presented by Brazil’s Federal Senate has advised to avoid regulating cryptocurrencies like Bitcoin in the wake of their limiting range in the country’s economy. The 18-page study has found both hailers and critics inside the Brazilian finance sector.
You can read the full report here.

Bitcoin Enters Into the Nebraskan Territory

Bitcoin Company Alpha Bitcoin recently presented Nebraska their first cryptocurrency ATM machine, which is now installed just outside Jones Bros Cupcakes in Aksarben Village. The area meanwhile has become the 15th establishment to accept Bitcoin as one of the payment methods.
You can read the full report here.

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Orange County Gets its First ATM as ZenBox Installs one




As a two-way Bitcoin ATM has been placed the new Anaheim Regional Transportation Intermodal Center (ARTIC) in California’s Orange County, the local Bitcoin supporters are enthusiastic about the prospects as they see a bright future for the digital currency. According to the company it is the first Bitcoin ATM in the locality.

Located inside Mission Market Express in the station’s Grand Foyer, ZenBox gives the station’s 10,000-plus daily commuters a familiar way to acquire digital currency. Nonetheless, as Mission Market Express was the first convenience store in California to accept Bitcoin, it was not unexpected that it would be hosting the first Bitcoin ATM as well.

According to ZenBox, the organization is introducing the alternative currency to a broader audience through its ATM and to further encourage adoption, the c-store will offer ARTIC customers ongoing discounts on Bitcoin purchases. Nonetheless, the new ZenBox ATM offers two-way functionality, which means users can use it to buy and sell Bitcoin.

Talking to media professionals Timothy Curry of ZenBox regional operator ezCoinAccess says that the ATM’s location at ARTIC makes it accessible to customers both from Orange County and beyond. The decision was made after Mission Market’s owner Roland Foss heard that both Overstock.com and the Sacramento Kings began accepting Bitcoin.

Roland Foss says that he immediately saw the market opportunity for his business. Now, Bitcoin enthusiasts travel to Mission Market Express from over an hour away just to buy items with Bitcoin. Nonetheless, he hopes that his organization will benefit a lot from this as the locality has quite large number of Bitcoin users.

Easy Access to Bitcoin Helps Bitcoin Supporters Use the Digital Currency

Currently, ZenBox has 18 ATM locations across the United States; thus, it is one of the largest networks of Bitcoin kiosks in the country. Though Bitcoin ATMs are still a novelty that most Bitcoin users do not have access to, they are an important tool to spread Bitcoin adoption. Also, they give cryptocurrency visibility in local communities as well as a “physical” presence.

A lot of Bitcoin installation companies often worry about the business and profitability; however, if they are located in strategic places, the opportunities to break even go higher. As the number of Bitcoin ATMs is increasing in the US, even Bitcoin users are willing to explore the digital currency as they can now get easy access.


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Bloomberg – a renowned business news service – recently voted Bitcoin as the 2014’s worst investment, thus*beating Russian Ruble and Ukrainian Hryvnia in terms of maximum drop.

As known to everyone, the new-age cryptocurrency has lost half of its value over the course of 12-months – crashing from the peak of $1,100 to the current position of $330. This drop somewhat turned out to be worse than Ruble which fell around 45% against the USD due to trembling oil prices and certain political reasons.

“A bitcoin has lost 58 per cent of its value in US dollars this year and 72 per cent since last November. If you’d invested $10,000 in bitcoin at the beginning of 2014, it would be worth $4,202 today,” Bloomberg demonstrated.

Despite being a marvellous innovation, Bitcoin continued to be the victim of unnecessary scandals, starting with the China’s biased rulings over local Bitcoin companies, followed by the controversial collapse of Japanese Bitcoin exchange Mt. Gox – everything added to the negativity Bitcoin was already surrounded with.

In the meantime, the digital currency kept tackling governments and regulators all around 2014, thus affecting its potential user adoption by greater extents.

Kevin Dowd, a finance and economics professor at Durham University however thinks Bitcoin to be the victim of its own hype. “It’s become the subject of a religion and if you don’t agree with it, you must be a lunatic,” he said. “I think many of the ‘crypto-currencies’ are disastrous investments. I would advise people just to get out.”

Tom Robinson supported the theory and said: “You have a peak of hype and maybe realistic expectations, followed by a trough of disillusionment and eventually you reach a plateau. I think we’re in the trough of disillusionment,”

While many Bitcoin supporters also think the currency to be in a realistic position at this point of time; though undervalued. For long-term prospects, they still think this cryptocurrency to be a better alternative to cash payment methods, provided with technological advancements and good marketing among the common users.

Bitcoin is already founds its place in the invoices of companies like Microsoft, Dell and Time. All it needs is a push for being used a widespread medium of exchange. Professor Philip Booth from Institute of Economic Affairs thinks that that “bitcoin’s successors will learn from its mistakes and the trial-and-error process of the market will produce something that is more appropriate for use as a widespread medium of exchange.”



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Online payments expert Stripe recently added Bitcoin payment support to its API, following which users will able to accept payments in digital currency alongside credit cards. The new-feature is scheduled to come out of beta testing in January 2015 and will charge a fee of 0.5% per transaction.

Launched in March 2014, Stripe has earned itself a reputation for offering hassle-free online payment APIs to address businesses of all sizes. Until now, the company’s platform was supporting only credit card payments, but due to the increase requests from users, it eventually decided to add Bitcoin support alongside.

From the look of it, Stripe seems just like another Bitcoin payment processors that convert BTC to USD in real time for merchants, in order to avoid market volatility. The company’s advice page clearly elaborates this progression in detail. Here is an excerpt:

“When you [merchants] use Stripe Bitcoin, your customer pays in bitcoin and you receive dollars in your bank account. At the time of the payment, the customer’s bitcoin are converted to dollars at market rate. This enables you to accept payments from any bitcoin user without taking on volatility risk.”

Stripe however hasn’t any revealed whether it is processing the Bitcoin payments by itself, or has hired a third party organization for the service. Such insight details might come to the surface only around the time of the Bitcoin support’s full-fledged launch.


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