Weekend Roundup: PayPal Embraces Bitcoin, Spain Classifies BTC as a Payment System and the US Gov. Comes Down on Two Notorious Companies

1. US PayPal Merchants Can Now Accept Bitcoin

On Tuesday, William Suberg reported on another big piece of news from PayPal, this time announcing that the payment network itself had partnered with a handful of BTC exchanges to allow bitcoin payment processing.

“‘Today we are announcing PayPal’s next step in helping merchants accept Bitcoin payments. PayPal has entered into agreements with leading Bitcoin payment processors BitPay, Coinbase and GoCoin,’ a senior PayPal exec stated in a press release. ‘Starting today, these agreements let PayPal digital goods merchants accept Bitcoin with a simple integration through the PayPal Payments Hub.’”

2. Spain Considers Bitcoin an Electronic Payments System

Diana Ngo reported last Sunday that a ruling from the Spanish government identifying the Bitcoin network as a payments system.

“[The] Ministry of Finance's body the Directorate General for the Regulation of Gambling (Dirección General de Ordenación del Juego, or DGOJ), as well as the Spanish Congress, indicated in two separated responses to Abanlex that Bitcoin was considered as an electronic payment system, and noted that Spain-based Bitcoin gambling companies must apply for both a gambling license and a relevant individual license.”

3. Butterfly Labs Has Its Wings Clipped

Ian DeMartino reported Tuesday that the US Federal Trade Commission had raided Butterfly Labs and won an injunction to keep the company from doing business.

“Butterfly Labs has been at the center of controversy nearly since its inception. Pre-ordered hardware almost always shipped late, leaving miners who had calculated profits based on energy consumption predictions, the hashing power of the hardware and Bitcoin's predicted difficulty level in the cold. The problem was that when mining equipment arrived late, Bitcoin's difficulty was higher and the profits Butterfly Labs' hardware should have produced were impossible to realize.”

4. $40.7 Million Fine: Judge Rules Ponzi Scheme on Bitcoin Savings and Trust

Carlo Caraluzzo reported Monday that a federal judge ruled Bitcoin Savings and Trust was indeed a criminal enterprise and levied a hefty fine against what it identified as a Ponzi scheme.

“US Magistrate Judge Amos Mazzant ruled that [Trendon] Shavers had ‘knowingly and intentionally’ run his business ‘as a sham and a Ponzi Scheme.’ The ruling included an order for Bitcoin Savings and Trust and its owner, [Trendon] Shavers, to pay a total of US$40.7 million. The judge ruled that the SEC had presented sufficient evidence that his virtual currency investments were a complete scam.”

5. Ripple Coming to US Banks

On Thursday, Ian DeMartino reported that a couple of US banks would begin using the Ripple protocol for their own operations.

“Cross River Bank of Teaneck, New Jersey and CBW, a century old bank operating out of Topeka, Kansas, will be among the first banks to use the Ripple protocol to enable instantaneous transactions between customers and the network of Ripple gateways using the protocol.”

Elsewhere

Koinify has a great blog post that went up Thursday title “The 11 Best Reads for Learning About Decentralized Applications.” “Tech companies are increasingly moving to block everyone — even police with a warrant — from accessing people's data,” a post on the political blog The Hill begins (h/t /r/Rad_Decentralization). CryptoCoinsNews’ Kyle Torpey responds to CoinDesk’s Daniel Cawrey over Cawrey’s speculation as to whether Bitcoin is the Napster of cryptocurrencies.

Market activity

The PayPal news Tuesday sent bitcoin prices against the dollar soaring briefly. Buy orders of nearly US$450 were reported on multiple exchanges before prices began to creep back down toward the US$400 mark.

For the second week in a row, our analyst Tone Vays nailed this prediction (which may or may not have been the predictive equivalent of banking in a pull-up 3 on a fast break):

“Our overall stance has been altered to Long-Term Bearish (though the downside is somewhat limited here), Intermediate-Term Bearish but Short-Term Bullish.  We are looking for a potential bounce in prices back to the US$440-460 levels where the most likely outcome from there would be continued selling pressure.  The thickness of the arrows in the charts is proportional to the probability level of set outcomes.”

Interestingly, Thursday saw a bigger spike across the board in terms of price, trade volume and total number of transactions. Prices Thursday again flirted with the US$450 mark on some exchanges, but the number of daily transactions also hit its cyclical peak that day, and exchange trade volume hit about US$12.7 for the day, the second highest mark for September so far.

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