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Following the introduction of restrictions against file-sharing services, Mastercard and Visa have reportedly started to take action against VPN providers. This week, Swedish payment provider Payson cut access to anonymizing services after being ordered to do so by the credit card companies. VPN provider iPredator is one of the affected customers and founder Peter Sunde says that they are considering legal action to get the service unblocked.

Payment providers are increasingly taking action against sites and services that are linked to copyright infringement.

There’s an unwritten rule that Mastercard and Visa don’t accept file-hosting sites that have an affiliate program and PayPal has thrown out nearly all cyberlockers in recent months.

It now appears that these policies have carried over to VPN providers and other anonymizing services. Before the weekend customers of the popular Swedish payment service provider Payson received an email stating that VPN services are no longer allowed to accept Visa and Mastercard payments due to a recent policy change.


Mastercard Visa

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We have now entered a Brave New World of Forex Trading following the disclosure of a US Surveillance program (“PRISM”), central bank manipulation of currencies (“currency wars”) and random acts of regulators (which are not mutually exclusive). With the increasing politicization of the financial markets, Forex traders are now becoming more exposed to market changes from geo-political rather than economic risk factors. As we know markets subjected to political rather than economic risk factors create unpredictable sharp short term volatility risk and cross country correlation risk which is almost impossible to risk manage and therefore costly to FOREX traders.

The key driver for ongoing FIAT currency intervention is the ongoing battle between emerging and emerged economies trying to out-compete each other for export markets. Some of the competitors in these currency wars are also seeking economic competitive advantage against their competitors via access to information from state owned cyber espionage programs. The ongoing use of illegally obtained information from state sponsored surveillance programs which would likely be used in currency market intervention would further undermine the properly functioning and confidence in FIAT markets.

BTC/USD Mt Gox
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Digital Bitcoin Marketplace

A new bitcoin-dedicated site called Yumcoin is offering content creators the chance to sell their wares in exchange for the digital currency.

The service, launched last week, allows creators to sell their digital goods online, in exchange for bitcoins. Software, music, videos, ebooks and plugins are listed among the products that can be sold on the site.

Users sign up for free accounts, and the service allows them to upload digital products to sell at a maximum price of 10 bitcoins. The files are stored on an Amazon’s cloud service. Sellers can then enter a product description, and choose an image to describe the product. Yumcoin gives them a product URL, which they can then share on Facebook or Twitter. Opening the URL gives the user 20 minutes to scan the QR code containing the payment bitcoin address and buy the product.

Yumcoin Product Screen


The site takes 1 percent of the sale price, plus .0025 bitcoins (around 25 cents at the current value) as a commission on every sale. Users provide just an email address and password when registering for the site, and they are able to nominate a bitcoin wallet whenever they want to withdraw their balance from Yumcoin. The site publishes a policy listing content not permitted for upload, including the usual suspects: obscene material, counterfeit items or digital content that you do not own, along with personal information.

Yumcoin's site is sparse — with no “featured product” directory — presumably because of its recent launch. At present, it appears to be offering a minimum viable product, Eric Ries-style, although more seems to be in the works.

“There’s lots of new features we’re working on (ie. catalogs, storefronts, and analytics),” the company stated in an email to CoinDesk.

Source: CoinDesk

Practically everyone who is interested in the buzzy digital currency Bitcoin trades at Mt. Gox. It handles more than half of all Bitcoin’s transactions, with roughly $144 million in USD filtering through the system right now, according to Bitcoin Charts.

But Mt. Gox is under increasing legal, federal and technological pressure that appears to be causing traders to lose some faith in the website, as trading volumes on Mt. Gox are slipping.

Bitcoin Trading Volume on Mt Gox


In the latest development, Symantec researchers discovered that a group of hackers had spoofed the Mt. Gox site and duped users into downloading harmful malware onto their computers — another in a series of attacks aimed at harassing Mt. Gox and some of its users (and perhaps stealing some Bitcoins in the process). A string of malicious DDoS attacks throughout 2013 have caused the website to even shut down a few times to stabilize the currency.

Mt. Gox has also faced legal heat. The website has introduced tighter verification regulations on non-Bitcoin trades, according to Forbes, in order to separate itself from recently shuttered trading website Liberty Reserve (indicted for participating in $6 billion worth of money laundering) and intermediary Mutum Sigellum (seized by Homeland Security for failing to register as a money transmitter). On top of that, Mt. Gox has been hit with a $75 million lawsuit, according to Gawker, by Bitcoin portal CoinLab, after a partnership went sour.

Interestingly, the Bitcoin exchange rate has remained steady throughout it all. The currency has other places to go, and in the event that Mt. Gox doesn’t make it (and there is a growing amount of chatter about that possibility), a new trading post will rise from its ashes.

Currently, 11 different exchanges manage Bitcoin transactions, with the second largest, BitStamp, handling more than $27 million in trades. As unstable as Mt. Gox may get, that escape route is a sign that Bitcoin has outgrown its original trading arena.

Source: GigaOm

Bitcoin Beyond the Reach of Government

When talking about the online currency Bitcoin – a currency backed not by any nation state, but instead a series of mathematical rules – coverage tends to focus either on the surging value of each coin (currently about $130 or £85) or the fact that Bitcoins are quite a handy way to buy drugs online, using the Silk Road website.

Both are of interest, but are roughly akin to focusing on how the aeroplane might disrupt the hot-air balloon industry: it's true, but drastically misses the true potential of an innovation to change the world – for good or for ill.

The real transformative power of Bitcoin, or something like it, lies not in a speculative bubble, but in its potential to put currency outside of the control of governments, or law enforcement agencies.

What that could mean has been brought to light by a massive international investigation into a different online currency, Liberty Reserve, which now stands accused of involvement in a $6bn money laundering scheme.

Liberty Reserve, which operated out of Costa Rica, was a centralised "gateway" currency, making transactions hard to trace. People needed to provide only minimal details – name, email, address and date of birth – to open an account, making it an easy way to make money traces disappear.

In pre-prepared remarks, Preet Bharara, the US attorney for the southern district of New York, described the site in damning terms.

"The only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes, as it became a popular hub for fraudsters, hackers, and traffickers," he said. "And the global enforcement action we announce today is an important step towards reining in the wild west of illicit internet banking. As detailed in the indictment, Liberty Reserve was intentionally created and structured to facilitate criminal activity. It was essentially a black market bank."

Law enforcement has finally caught up to the weakest link in the maze of virtual back streets, false-facers and more: the trail of money. Trying to trace a hack is often almost impossible, but trying to follow where – say – stolen money goes is far more doable.

That's not an easy task – securing the Liberty Reserve indictment took 17 law enforcement agencies. But given the extensive record-keeping in traditional banking, regulations around moving money across borders, and more, chasing the cash is a far easier task than trying to follow sophisticated online operators with experience of covering their tracks.

Unless, of course, some unknown genius (or group of clever people) invents a currency that so far lies beyond such regulations, is to all intents and purposes untraceable, and doesn't require even the minimal information requested by Liberty Reserve.

Or, in other words, something exactly like Bitcoin.

Source: Guardian