Customers affected by Mt Gox’s insolvency have been given more time to file their online bankruptcy claims.
The claim process was previously[1] due to close at the end of May. However, a document[2] from bankruptcy trustee Nobuaki Kobayashi, released on the former exchange’s webpage today, indicated the deadline has now been extended[3] until 12pm on 29th July (Japan time).
Past this new date, affected users will only be able to view their existing bankruptcy claims online or transfer these to somebody else.
“Nearer the time of distribution, the bankruptcy trustee is planning to give users an opportunity to use the system again to make changes to the details of their bankruptcy claims other than increasing the amount of the bankruptcy claims that users have filed,” noted the document.
The online process, overseen by Kobayashi and bitcoin exchange Kraken[4], was created to cater for the majority of Mt Gox creditors who live outside Japan.
Missing coins
One of the world’s first bitcoin exchanges, Mt Gox halted operations in February 2014 following an alleged loss of 850,000 bitcoins, then around $454m[5].
Although investigations are ongoing, Wizsec, a group looking into the exchange’s closure, asserted[6] most of its funds were stolen a year before Mt Gox’s collapse, meaning it had been operating as a fractional reserve system.
According to Kraken CEO Jesse Powell, creditors can expect to receive no more than 20%[7] of their original account balance.
A deal between bitcoin exchange Quoine and payments network Econtext will allow more than 20,000 online and eventually physical merchants to accept bitcoin in Japan.
The move essentially allows merchants that already use Econtext’s payment processing services in thousands of online stores to accept bitcoin payments without the need for a bitcoin-specific processor. The service will be available for businesses to use today[1].
Quoine[2] CEO Mario Gomez Lozada said his company had entered into discussions with Econtext[3] last year, and has since done extensive integration work to connect it to Quoine’s payments platform.
Gomez Lozada told CoinDesk:
“For us, it’s a pretty significant deal.”
According to Gomez Lozada, Econtext has signed up a couple of merchants to accept bitcoin already and is actively approaching others.
The partnership could spur a large increase in the number of bitcoin-accepting merchants in Japan, where adoption has been slower than in other nations due to negative media attention from the Mt Gox[4] insolvency.
How the system works
Quoine’s exchange interfaces with the merchant’s checkout system, supplying a bitcoin price for the merchant to quote to the customer.
The quoted rate is locked in for both customer and merchant for 30 minutes, even if bitcoin fluctuates wildly in that time. Econtext supplies a payment method selection screen for its merchants to use, which will now feature a bitcoin option and display QR codes customers can use to make the payment.
The company is a recently-acquired subsidiary of Digital Garage Inc[5], a Japan-based technology investment company. It provides ‘settlement services’ for businesses, working with payment systems like credit cards, electronic money and loyalty points, as well as convenience stores, banks and communications carrier bills.
Quoine bolsters offering
Known more to professional forex traders than general consumers, Singapore-based Quoine[6] claims to be the highest-volume bitcoin exchange operating in the Japanese yen market.
Gomez-Lozada said the exchange currently averages volumes of between 500 and 1,000 BTC a day, with that number leaping much higher on special days and holiday periods.
“Our growth has been quite significant in terms of volume, it’s been quite amazing and we continue to see volumes going up.”
As well as bitcoin, Quoine allows accounts in 10 fiat currencies.
Quoine recently enabled the ability to trade bitcoin through other fiat currencies on its platform. While users could previously only trade with their local fiat currency, they may now speculate for profit on another level by trading BTC for other currencies using their original local balance.
The exchange also allows up to 25x margin trading (with bitcoin or fiat collateral), algorithmic trading, Japanese yen futures, interest-earning bitcoin lending and API access.
Mt Gox customers can now formally make a claim against the defunct exchange, with the potential to receive their payout in bitcoin.
The process is being overseen by exchange Kraken[1], appointed to assist Mt Gox’s bankruptcy trustee Nobuaki Kobayashi last November[2].
According to instructions posted[3] on the Mt Gox homepage, account holders have until 29th May (Japan time) to fill out forms directly from the site, or open an account with Kraken and begin from there.
The online claims process is available as the large majority of Mt Gox’s 100,000 creditors live outside Japan, enabling them to participate more easily in the bankruptcy process.
Those who cannot supply a Mt Gox username or password will need to complete the process offline, mailing a printed form instead.
Bitcoin payouts possible
With a Kraken[4] account, users are able to request a payout in bitcoin. Those who do not have a Kraken account, or do not wish to open one, would have to receive any payout in fiat currency.
It is still not 100% certain that distribution in bitcoin is possible, but the trustee says it is investigating.
Kraken is also offering[5] up to $1m in free trades to creditors claiming funds through its system.
Ayako Miyaguchi, Kraken’s managing director for Japan, said there is still some misunderstanding as to whether claiming in fiat or bitcoin is preferable.
“There is no advantage to holding fiat over bitcoin, or taking a payout in fiat over bitcoin. Everything is considered in terms of its value in Japanese yen, and everyone will get their pro rata share of that number. There is an advantage with bitcoin, however, when you consider withdrawal fees, which of course will be much lower for bitcoin compared to fiat.”
The bitcoin value listed on the claims form is $483, which it specifies is taken from the CoinDesk Bitcoin Price Index[6] at 23:59 on 23rd April 2014, Japan time.
To complete the process, users will need to supply their personal information, Mt Gox account information including the amounts claimed, and bank details (to help verify that the account is genuine).
Mt Gox customers have for some time been able to log into the exchange with their former username and password to see their exact bitcoin balances in fiat.
Third creditors’ meeting
At the third Mt Gox creditors’ meeting held in Tokyo today, it was announced that the company’s total remaining assets had been valued at 1.376bn JPY ($11.5m). This is roughly 60m JPY ($504,000) more than had been stated at the previous meeting.
The difference was collected from “money deposited with other companies”, according to a statement, including 35.3m JPY from one “foreign payment service provider”.
Total current bitcoin reserves are listed as 202,159 BTC.
In another twist, the trustee claimed that Mt Gox still has loan receivables of over $136.17m against CEO Mark Karpeles. Karpeles has so far not presented a repayment plan, prompting the trustee to state he was considering taking “necessary legal action” to resolve the issue.
Realistic expectations
In a statement, Kraken CEO Jesse Powell said his company’s philosophy is to put customers’ best interests first.
“We see our involvement in this process as an opportunity to restore faith in the community by showing what we need more of in the bitcoin space – trusted leadership.”
Posting on Reddit, Powell cautioned that no one would likely receive the full value of their account balance at the time of Mt Gox’s collapse in February 2014.
Anyone who read the most recent Wizsec report[7] on the missing coins, he wrote, probably would not expect to receive any more than 20% back. The report noted that Mt Gox had less than 100,000 BTC in its system after June 2013.
The total amount creditors could claim would be known after two months of claims applications and another two for the bankruptcy trustee to evaluate the claims. The result would be known “sometime in September or October”.
Mt Gox’s missing bitcoins were stolen from the exchange over a period of time beginning in 2011, according to a new report released today by a group investigating its collapse.
They were gone long before the company’s collapse in February 2014, the report said[1]. Gox had therefore been operating on a fractional reserve basis for most of that time, either knowingly or unknowingly.
The stolen bitcoins had been withdrawn and sold off on various exchanges including Mt Gox itself, and given the timing probably at prices far below the 2013-14 highs.
Tokyo-based bitcoin security firm WizSec[2], which produced today’s update and a previous one[3] in February, has been conducting an unofficial investigation into Mt Gox’s collapse based on data pieced together from various leaks, hacks and other sources.
Bankruptcy trustee Nobuaki Kobayashi and his police team have still not made all transaction data available, including a list of all the bitcoin addresses Mt Gox used.
WizSec’s report says its team has assembled a list of over 2m bitcoin addresses related to Mt Gox by comparing leaked data with blockchain records and performing clustering analysis on addresses used at similar times.
Huge discrepancy
The resulting chart shows a dramatic difference between the number of bitcoins Mt Gox should have held, and what it actually held.
chart by WizSec
The company held little or no more than 100,000 BTC from May 2013 onward. Interestingly, neither the ideal nor actual totals includes the 200,000 BTC ‘found’ in cold storage after the collapse.
One key question (until now) has been whether Mt Gox’s bitcoins were stolen or whether they ever existed at all, and records of their deposit faked.
Report author Kim Nilsson notes that the coins did in fact leave Mt Gox, meaning they definitely were deposited there at some point.
Speaking to CoinDesk, he said the WizSec team was “happy to finally have this breakthrough out in the public”, but noted that there is still a lot of investigative work to be done by those with access to more complete data.
How many bitcoins did Gox have?
After a prior security breach in mid-2011, CEO Mark Karpeles performed a transaction[4] proving the company controlled at least 424,242.42424242 BTC.
Using that figure as a baseline, Nilsson measured changes in total BTC held since that day, arriving at 950,000 BTC on the day of Gox’s collapse in February 2014.
This matched total holdings stated elsewhere in leaked data, he wrote.
Not Willy
One surprising revelation from the latest report is that the bitcoins likely disappeared long before the appearance of Mt Gox’s infamous trading bot, nicknamed “Willy”[5].
Speculation surrounding Gox’s dying days in 2013-14 had implied Willy was related somehow[6] to the theft, though WizSec’s report says that is no longer considered possible.
The bot may, however, have existed to convert the missing bitcoins into missing fiat currency amounts instead.
“The possibility exists that this kind of manipulation may have been the main purpose behind Willy as a way of coping with the practical problems caused by such a massive bitcoin shortage. This is left for later investigations to clarify.”
Cold storage not monitored
That nearly all Mt Gox’s bitcoins disappeared raises several questions about the nature of its cold storage system. How ‘cold’ was it?
The company was known to keep paper wallets stored under lock and key, which it added to and subtracted from as required. The cold storage system was also reportedly not monitored with any degree of scrutiny, meaning the thief was free to either compromise them or wait for the funds to be moved to a ‘hot’ wallet.
“A reminder to all bitcoin businesses out there: Always. Monitor. Your. Bitcoins,” Nilsson wrote.
To be continued
This latest report will again confirm suspicions many had about the way Mt Gox was run.
A newspaper report at the beginning of the year claimed[7] the theft was an ‘inside job’ by someone with access to the company’s system. Today’s revelation that Gox was indeed running a fractional reserve will also surprise few – other than the sheer length of time over which it happened.
Trustee Kobayashi announced[8] in November that exchange Kraken would assist with the investigation, as well as manage the claims process and distributing Mt Gox’s remaining assets to creditors at some point in future.
Nilsson wrote that his contribution to the research has been voluntary, and hopes the work will now prove valuable to the authorities in their continuing investigation.
BitFlyer has released a new block explorer that it hopes will provide a more colorful and robust offering amidst the growing landscape for online bitcoin tools.
Dubbed chainFlyer[1], the visualizer provides an illustrated environment in which users can examine individual bitcoin transactions, inspect completed blocks on the bitcoin ledger and search for information on the blockchain.
Transactions are depicted as multicolored charms that descend from the top of the screen, chiming when they fall to the browser floor. In turn, blocks are pictured as boxes that can be opened and examined for transaction information.
Overall, the block explorer seems to prioritize style over function, though it has goals of appealing to a more technical audience as well, with tags that allow users to save searches.
CEO Yuzo Kano told CoinDesk:
”This is very similar to Blockchain.info[2] except we have the scrypts and commands of each transaction.”
Kano acknowledged that such an in-depth look into the bitcoin ledger would be for more technical audiences. However, he expressed his hope that the animated and musical nature of the site would inspire those who lack a technical background but are curious about the blockchain to take a closer look.
BitFlyer has so far raised $2.9m[3] over three rounds of fundraising.
Japanese e-commerce giant Rakuten has integrated its US site with bitcoin payment processor Bitnet, enabling customers in America to pay with the digital currency.
Often considered a rival to Amazon[1], Rakuten has also confirmed plans to roll out bitcoin integration to both its German and Austrian e-commerce sites.
Yaz Iida, president of Rakuten[2] USA, said the company’s mission was to “empower the world through the Internet”. He added:
“Not only can bitcoin support this vision by helping our merchants to compete globally, but it also has the potential to benefit society by enhancing the security, privacy, and convenience of financial transactions.”
Speaking about the integration, John McDonnell, co-founder and CEO at Bitnet[3], said that they were excited to join with Rakuten in helping both merchants and shoppers reap the benefits of this new technology.
He added: “Rakuten’s global marketplaces are great examples of how digital currencies can impact global commerce.”
Interest in bitcoin
The news comes after Rakuten’s CEO, Hiroshi Mikitani, one of Japan’s wealthiest individuals, announced[4] his company was considering accepting bitcoin just last month.
Rakuten is not new to the bitcoin space. The Wall Street Journal previously reported[5] that the e-commerce giant had formed a department to study digital currencies and had invested in US-based bitcoin ventures such as Bitnet.
The Tokyo-based company employs over 14,000 people and operates 40 businesses worldwide. The company is expanding worldwide and currently operates throughout Asia, Europe, the Americas and Oceania.
In Japan it operates a bank, an insurance company and even a professional baseball team.
BitFlyer has closed a fundraising round of 130m JPY ($1.1m), led by Barry Silbert’s Bitcoin Opportunity Corp, Recruit Holdings Ltd. subsidiary RSP Fund No. 5 and GMO Venture Partners.
This is bitFlyer[1]‘s third round[2] of funding[3], bringing the Japan-based bitcoin services firm’s total investment to $2.93m since it launched in early 2014.
In a statement, bitFlyer said it will use its new capital to set up overseas offices, improve security, recruit new talent, accelerate service development and carry out marketing and advertising campaigns to promote business growth.
When it announced its second funding round in October, CEO Yuzo Kano hinted Singapore may be bitFlyer’s first overseas target thanks to its bitcoin-friendly regulatory environment.
Participating investors
The funding round included at least one familiar name to the bitcoin industry in Barry Silbert’s Bitcoin Opportunity Corp[4].
Bitcoin Opportunity Corp invested in bitFlyer’s previous round, and has been integral in funding numerous well-known digital currency startups around the world including BitPay, Coinbase, Ripple Labs and Xapo.
Recruit Strategic Partners[5], a subsidiary of Japan-based company Recruit, is a Tokyo-based venture capital firm that funds tech startups around the world, mainly in the US and Japan. It also has an office in Silicon Valley, and lists crowdsourcing and financial technology as two of its primary[6] investment targets.
This is the first investment in a bitcoin firm for both Recruit and GMO.
Leveraging relationships
BitFlyer also wants to use the new funding to expand its customer and revenue base by leveraging relationships with its investment partners, another factor it said will help its international operations.
One such relationship is with GMO parent and payments gateway GMO Holdings, through which bitFlyer[9] has already gained access[10] to over 48,000 online merchants and even started a bitcoin-based consumer rewards scheme[11] through PointTown, owned by GMO Media.
A market-order style bitcoin exchange, bitFlyer charges 0.5% plus 0.0004 BTC on buys, and 0.01 BTC to sell. BitFlyer has also launched a mobile app for iOS devices and offers multiple tiers of accounts for personal and business customers.
Bitcoin will be on the agenda in Japan next month at ‘Financial Conference 2015’ – an event being held by online retail giant Rakuten in conjunction with other firms.
The Japanese multinational and Amazon rival will host the one-day event[1] in Tokyo on 23rd February, the first such event in the company’s history.
Notably, Xapo[2] CEO Wences Casares and Bitnet[3] CEO John McDonnell both appear on the speakers list[4] alongside PayPal founder Peter Thiel and MasterCard’s James Anderson.
One session is a panel discussion titled ‘The Rise of Bitcoin’. Local lawyer So Saito, of advocacy group the Japan Authority of Digital Asset[5] (JADA) will also be speaking.
The event’s website says:
“Innovative financial businesses are flourishing all over the world as technology evolves from day to day. Virtual currencies such as ‘Bit Coin’, advanced payment systems optimized for mobile, as well as their collaborations with Finance & Technology are rapidly emerging.”
Rakuten and bitcoin
Rakuten was reluctant to speak about any possible plans to introduce bitcoin into its online shopping ecosystem.
CoinDesk contacted the company to ask about the intent behind inviting bitcoin representatives to its conference, but received the response: “As for bitcoin related questions, we’re not in a position to do comment at this stage”.
CEO Hiroshi Mikitani has spoken favorably[6] about bitcoin in the past, saying it is a more stable option than some national currencies and anticipating that his company would accept bitcoin “sooner or later”.
Rakuten is also notable in Japan for operating its own bank[9], a purely online operation with no physical branches. It also has insurance and investment management businesses, and its own team in Japan’s national baseball league.
Its international operation includes over 40 businesses gained mostly through acquisition, including Buy.com and messaging app Viber. It has over 10,000 employees and revenues in 2012 topped 4.63bn.
CoinDesk has reached out to Xapo and Bitnet for comment on their involvement in the event.
Japanese newspaper readers began the year with bitcoin as front-page news
Blame for 99% of the bitcoins missing from Mt Gox falls on internal system manipulation and not any external attack, a major Japanese newspaper has claimed.
Citing an unnamed source connected to the ongoing police investigation, Japan’s Yomiuri Shimbun newspaper led with the story[1] on the front page of its new year’s day edition. It said that only 7000 BTC, or 1% of the total 650,000 missing, could be attributed to hacking attacks from outside the company.
Yomiuri did not elaborate further on the matter.
That a company insider might have been responsible for the theft of 650,000 BTC from Mt Gox has been whispered about for some time, though no-one in particular has been named as a suspect, even unofficially.
No major hack attacks
Mt Gox had no full-time staff other than CEO Mark Karpeles, employing a series of contractors on temporary work arrangements. No-one associated with the case, however, is suggesting Karpeles might himself be responsible.
The ‘inside job’ theory is contrary to the official line the company has maintained until now, that the bitcoins’ disappearance was a gradual theft attributable to the ‘transaction malleability[2]‘ flaw in bitcoin’s underlying code.
This claim was derided at the time by bitcoin core developer Gavin Andresen[3] and other independent[4] researchers. Mt Gox began using the transaction malleability line in early February[5], even before it was clear the exchange had been damaged beyond repair, saying withdrawals would resume as soon as possible.
Willy and Markus
The clearest sign of impropriety within the Mt Gox trading system came in March 2014, when leaked transaction data showed anomalous behavior attributed to two automated trading bots[6], nicknamed ‘Willy’ and ‘Markus’. The Yomiuri report links “suspicious accounts” to the disappearance, but does not specify whether it means these known accounts or new information.
The ‘Willy’ bot appeared at certain times in late 2013 and seemingly under several different User IDs, all of which had irregularities in their records, such as “??” in place of a user location.
It would pop up under a new User ID, spend (for the most part) $2.5m buying bitcoins at the then-current market rate, and then cease trading. It is possible this helped push up bitcoin’s price[7] in November 2013.
‘Markus’ was an earlier bot that ‘bought’ bitcoins at random prices though appeared to never spend any actual fiat money on the transactions. The two bots acquired about 570,000 BTC until November 2013, after which no more records are publicly available.
Assuming the automated activity continued after that time and until Gox’s implosion two months later, one theory is those two bots were connected with the disappearance of the 650,000 BTC.
Asia is home to over half the world’s population, not to mention a large number of its fastest-growing economies and busiest financial centers.
In terms of funding and business activity, the Asian bitcoin scene is dominated by its most advanced economies: China, South Korea, Japan, Hong Kong and Singapore. The region is home to over 50 countries and jurisdictions with diverse conditions and financial needs.
In theory, this should be bitcoin’s land of milk and honey.
However, Asia’s economic and political diversity is both an advantage and disadvantage, and there are still plenty of wrinkles to be ironed out before the region’s cumulative talent is unlocked and potential realized.
Let’s take a look at Asia’s major news stories of 2014: the good, the not-so-good, the innovative and unusual.
China: in or out?
Just as China is the factory to the world’s manufacturing industry, its industrial-scale bitcoin mining farms and Shenzhen-based hardware factories also make it the largest producer of bitcoins.
The nation is also home to the world’s highest-volume bitcoin exchanges – their fee-free models and exotic trading products enticing both human and automated speculators from mainland China and far beyond.
When questions are raised about the source of bitcoin’s value and volatility, the answer is often an ambiguous one-word: “China”.
China was often erroneously said to have banned and unbanned bitcoin in 2014, though it is important to note that at no point was bitcoin officially outlawed, nor did local businesses lose access to all banking facilities.
Things were far from smooth sailing, however. Comments from the People’s Bank of China in December 2013 coincided with the beginning of bitcoin’s price decline from its $1,100+ heights, a downward trend that has continued all year.
Occasional news hoaxes[1] about bans, from unknown sources, only added to the official opaqueness.
CEOs from China’s five most prominent bitcoin exchanges: OKCoin, Huobi, BTC China, BtcTrade and CHBTC, issued a joint statement[5] promising they would no longer encourage excessive speculation in digital assets and would report new industry developments to the authorities.
Then, almost mysteriously, regulatory activity seemed to melt away.
In the latter half of 2014, big name Chinese bitcoin exchanges gained more attention by focusing on markets outside China and continued to grow. OKCoin and Huobi launched USD exchanges registered in Singapore and Hong Kong respectively, and BTC China continued to offer its range of services in English.
Both OKCoin and Huobi held lavish events in Beijing to celebrate the fact that they were still around, and going strong.
Chinese companies raced to introduce new products and features to attract new customers from the professional finance industry, including margin and futures trading, and P2P lending to support trading or mining hardware projects.
Some initially speculated that bitcoin’s popularity in China was due to wealthy Chinese looking to move their money into offshore investments, though experts have disagreed[6], and recent liberalization of China’s capital controls may have led investors to look at other asset classes[7] instead.
Japan: professional competition
Japan, for decades a financial services powerhouse, finally jumped into the bitcoin game in 2014 after some hiccups.
Professional bitcoin services began emerging in the first half of the year, with strong local market knowledge, seven-figure venture capital backing and consumer-friendly promotion campaigns.
Exchanges BitFlyer[8] ($1.8m-plus investment raised) and Quoine[9] ($2m-plus raised) were launched by founders with years of experience in the Japanese offices of international finance giants, and Kraken[10] launched its long-awaited Japan office in October.
Payment processor/exchanges Coincheck[11] and Bitbank[12] ($1.4m raised) also competed with BitFlyer for the consumer trading and merchant payment markets, signing up both bricks-and-mortar and online businesses.
BitFlyer’s partnership with online services company GMO opened it up to over 48,000 online merchants. Additionally, its accompanying consumer rewards scheme[13] through GMO subsidiary PointTown allowed users to withdraw in bitcoin, while BitBank started its own program called BitcoinGET[14].
Bitcoin in Japan was aided by one of the world’s most digital currency-friendly politicians, Mineyuki Fukuda[15], who retained a seat in Japan’s December national election.
The government MP and head of its IT strategy committee met with industry representatives at his parliamentary office and at meetups, crowdfunded[16] a bitcoin research tour of the US and was instrumental in forming Japan’s first digital currency industry liaison group, the Japan Association of Digital Asset[17] (JADA).
Japan is also busy developing its own homegrown altcoin, Monacoin[18], which has gained a cult following among the country’s tech savvy and otaku[19] (‘geek’) communities.
Mt Gox won’t go away
Unfortunately for Japan, it seems no story can exist without at least a passing reference to Mt Gox[20] – this is as true for Japan’s local media as it is for bitcoin news sites.
It’s almost hard to imagine that a year ago, Mt Gox was still a going concern, instructing users to “trade with confidence” on its “secure” platform. The rest is history: a hard shutdown, protests, various claims of hacking, bugs and thefts, and a protracted claims process that has left creditors with little hope they will ever see their money again.
Over the course of the year, there were attempts to resurrect the brand by Chinese companies OKCoin[21] and BitOcean[22], and a consortium of US investors called Sunlot Holdings. However, facing legal challenges[23], creditors’ objections and Mt Gox’s fast-dwindling brand value, all eventually abandoned their plans.
Mt Gox’s CEO Mark Karpeles remains in the gilded cage of his Tokyo penthouse apartment, not facing any charges related to the losses, yet seemingly unable to leave the country.
Bankruptcy trustee Nobuaki Kobayashi has allowed him to continue operating his web services business Tibanne and also permitted that company to be paid from Gox’s remaining funds, in the hope that it will someday make enough money to pay back out-of-pocket customers.
The year ends with Kraken now officially participating[24] in the investigation of Gox’s losses, aided by security firms WizSec[25] and Chainalysis. Over 600,000 BTC still remains unaccounted for.
South Korea: The quiet achiever
The Republic of Korea’s bitcoin startups are concerned mainly with the domestic market, and as such are often overlooked by the international media. Despite this, they managed to outdo their Japanese counterparts in 2014 in investment terms.
Exchange and payment processor Coinplug[26] raised a total of $3.3m[27] by the end of the year, while competitor Korbit received at least $3m[28]. Korbit claimed in August it had already signed up 25,000 individual and 400 merchant customers.
Coinplug’s July deal with payments giant Galaxia Communications[29] opened its business to potentially over 10,000 e-commerce websites. The company also developed and launched one of the first bitcoin ATMs[30], produced by the largest bank machine manufacturer outside the US, Nautilus Hyosung.
Other notable Korean companies included Devign Labs[31], which built P2P marketplace Coinone[32] and raised $200,000 in funding.
Digital currency also had plenty of time in the Korean spotlight in 2014, starting with the Winklevoss twins’ appearance[33] at tech startup conference beLAUNCH.
Asia’s two international city-states are also its leading financial centers, placing them both firmly on bitcoin’s radar as places to watch.
Singapore was fast out of the gate, its reputation as a tech startup and financial hub attracting exchange and payments pioneers like itBit[36] and GoCoin[37], along with homegrown ATM producer Tembusu[38].
While itBit decided to shift[39] its primary headquarters to New York to capture a share of the US-based trading market, Singapore remains a focal point for bitcoin with its own regulators promising[40] this year not to “stifle innovation”.
Another headline grabber was Temasek[45], the Singapore government-owned investment company with a $172bn portfolio. In June, its chairman Lim Boon Heng announced the firm had been conducting a “bitcoin experiment[46]“, supplying its staff with bitcoin wallets and a small amount of coins for donation to their preferred charities.
Hong Kong has also looked promising as an exchange center, helped mostly by its business-friendly legal and political environment, and ability to attract large numbers of customers from mainland China.
Bitfinex[47] is now one of the world’s largest USD bitcoin exchanges, its volumes growing[48] from around 10,000 BTC per day in April to as much as 50,000 BTC per day in October.
ANX also grew, acquiring and reviving[49] troubled Norwegian exchange Justcoin in November, and launching a bitcoin-to-ATM-debit card[50] that allows users to load cards directly from their ANX bitcoin balances.
Derivatives trading platform BitMEX won the Hong Kong leg of the Slush Startup Challenge[51], later traveling to Finland to compete in the international event.
Southeast Asia emerges
Countries in the ASEAN region also got off to a shaky start in late 2013 and 2014, with central bank representatives in Vietnam[52] and Thailand[53] suggesting bitcoin’s non-legal tender status may render its use illegal.
Common sense has prevailed and local companies have since managed to establish trust channels with authorities in both those countries, keeping exchanges open and connected to banking services.
By August, Vietnamese state TV had even broadcast a report[54] examining the curiosity and issues surrounding bitcoin.
His company has also been involved with one project to allow the public to buy and sell bitcoins over the counter at 10,000 convenience stores[63], and another called ‘Bali BitIslands[64]‘, which over the course of 2014 has begun turning the tourist island of Bali into a bitcoin haven, one business at a time[65].
Philippines: new use cases
The Philippines stands out among other Southeast Asian markets as a country exploring bitcoin use cases beyond exchange trading and daily spending.
Having noted the up to 13.5 million Filipinos living abroad[66] and the $23bn they sent home in 2013, startups Rebit.ph[67] and Coins.ph[68] have devoted their energies to building bitcoin-based remittance services to rival the over-the-counter and paper form experiences that are all too familiar to Pinoy expats.
India: Plenty of potential
India, with over 1.2 billion people and a booming[69] native IT industry, could be[70] bitcoin’s sleeping giant.
Despite starting the year amid regulatory uncertainty, the nation’s digital currency businesses have since been allowed[71] to grow and take their message to the public.
BTCX India CEO Kamesh Mupparaju said:
“We are very much looking forward to 2015 and believe this will be the year that bitcoin goes large in India.”
Vishal Gupta of the Bitcoin Alliance of India has held seminars[76] before hundreds of Indian university students, saying he was impressed by the level of knowledge demonstrated. Awareness of digital currencies was also on display during a TV interview with central bank governor[77] Raghuram Rajan just last week.
There has even been positive bitcoin coverage[78] in the Indian media, which suggested that bitcoin might be a worthy token for those facing difficulties acquiring gold.
After a year packed with largely positive developments in the region, one can only look forward to what the combination of bitcoin and the huge Asian market will bring in 2015.
