October 31, 2014 - In This Issue:










'It is Impossible to Technically Ban Decentralized Cryptocurrencies Due to the Nature of the Internet' - Evgeny Volovik

Evgeny Volovik is the head of the Information and Communication Department at Russia's Federal Financial Monitoring Service Resource Center.


The Federal Financial Monitoring Service (Rosfinmonitoring) reports directly to the President of the Russian Federation and is a federal executive body responsible for combating money laundering and terrorist financing.


The agency also develops and implements state policies, assesses threats to national security arising from money laundering, financing of terrorism and proliferation of weapons of mass destruction and develops measures to counter these threats.


Back in August at the #CryptoForum Conference in St. Petersburg, Russia, Evgeny Volovik made some interesting statements that appeared to counter the official stance of Russia's Central Bank on cryptocurrencies. He remarked that:

  • Bitcoin is not a monetary surrogate; The Federal Financial Monitoring Service has evidence that terrorists prefer fiat over digital currencies;

  • If Russia is excluded from the world's financial system then Russia will revert back to the time of the USSR and will trade with gold;

  • International sanctions against Russian companies and officials don't have teeth. If Russian is included into the FATF blacklist, it will drop down to the level of Iran.

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Goldbugs Move to Crypto-Currency on Low Bitcoin prices Via Agora Commodities

Many people might have felt dismayed when the price of Bitcoin collapsed from over $1000 USD to its current level of around $350. This stunning value depreciation doesn't seem to have effected Sound Monetarists, who have traditionally only hoarded precious metals, from moving those assets into Bitcoin.


Agora Commodites, a leader in Bitcoin to precious metals transactions has noted the marked increase of inquiries and transactions from customers wanting to move their physical bullion into Bitcoin. This is in stark contrast to when Bitcoin was sailing to $1000 when almost all the transactions were Bitcoin to bullion in nature.


Joseph Castillo, CEO of Agora Commodities, puts the influx of gold & silver holders moving into Bitcoin this way, "There has been many comparisons made between precious metals and Bitcoin. Some people have even deemed Bitcoin as Gold 2.0. Our recent surge in customers selling their gold and silver for Bitcoin reflects this trend. People who have long turned to gold and silver as a vanguard to fiat currency see this as another logical medium to store their wealth."


Bitcoin Bullish On Asian Opportunities

(Bitcoin) markets have seen lower volatility in the past few days in relation to previous weeks; the price fluctuated in a narrow range yesterday, between $358 and $348. At present, the Bitcoin price on the BitStamp exchange stands at $355.95, with $357.43 being today's high so far. The price action has recently been pushed below the first daily resistance level, which lies at $356.03. If the price manages to sustain itself above this level, it should be bullish and the next resistance will be found at $362.06.

However, if a downward move is realized, then $346.59 will act as the first support level for today.

Trading in Bitcoin is quietly making a comeback in China, where modern technology and financial innovation has allowed new businesses in the Bitcoin space to emerge, including companies mining the currency for investors. Several companies in China have bought equipment designed to mine Bitcoin more efficiently and utilize cloud computing technology. However, an unnamed official told Guangzhou's 21st Century Business Herald that the government is very likely to intervene if investment in bitcoin continues to grow.


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Singapore-based Coin Republic, a Bitcoin brokerage and consultancy founded by David Moskowitz, recently hit SG $1 million in turnover. A significant milestone, this helps to cement Coin Republic's status as a key player in the growing Bitcoin ecosystem that's taken root in the city-state.


Asked about its significance, Moskowitz stated "It shows that there is demand by the general public in Singapore for an alternative asset class and means of exchange."


This growth bodes well for the Bitcoin ecosystem locally and in the wider region, in terms of growth prospects. With prices having stabilised from the decline of the past few weeks, this turnover implies growing demand for the volatile digital commodity, which remained stable despite market turmoil last week.


Moskowitz explained the decline of the last few months as part of Bitcoin's growing traction. Its acceptance by major merchants, such as Dell, Paypal and Expedia have created downwards pressure on the virtual currency.


Many merchants were also converting their Bitcoin holdings to fiat currency, rather than circulating it back into the ecosystem by paying suppliers and employees in Bitcoin.


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Bitcoin in Your 401(k)?

Barry Silbert can't see into the future, but he has a very clear idea how he'd like it to look - and it includes 401(k) investors. 


"No one can say for sure where bitcoin will be in five years," the founder of Digital Currency Group says. "There's huge upside potential for bitcoin. It has the potential to completely disrupt the existing market on how money is transferred around the world, and potentially revolutionize how commerce gets done."


Those should be more than familiar notions for anyone who's heard Silbert talk about bitcoin. What's far less so is his idea that bitcoin has a place in the defined contribution world.


Bitcoin, for the uninitiated, is a form of digital currency that emerged in 2009. According to Coindesk, an independent online journal covering the digital currency market, bitcoin's most important characteristic is that the currency is decentralized.


"No single institution controls the bitcoin network," it notes. 


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