Mt. Gox and Ripple Founder Jed McCaleb Unveils Project ‘Stellar’

 

Stellar, the long-secret digital currency project helmed by industry entrepreneur Jed McCaleb, has officially launched.

McCaleb is the original founder of defunct Japanese bitcoin exchange Mt. Gox and a co-founder of digital currency-focused payment network Ripple Labs.

The new platform is a decentralized gateway for digital currency to fiat currency transfers, The Wall Street Journal reports. Like Ripple and bitcoin, Stellar will act as a public transaction authenticator and feature its own in-house digital currency called ‘stellar’.

McCaleb’s announcement follows months of rumors about the project, which first surfaced in February. At the time, a mysterious website was launched to enlist developers, alpha testers and designers, and now redirects to the official Stellar site.

In a statement, the Stellar Development Foundation’s Executive Director Joyce Kim suggested that Stellar will act as a bridge between fiat and digital currencies – a key requirement if the latter are to be adopted by mainstream users.

Kim added:

“This is probably the best way to bring the best of both worlds together.”

Stellar details

According to WSJ, Stellar will act as a transaction gateway, enabling usability in both fiat and digital currencies.

While it’s not clear what, if any, infrastructure is already in place, Stellar, like Ripple, will allow cross-border transactions that use digital currency as a technological ‘middleman’ for fiat transfers.

Notably, the platform’s in-house currency, stellar, will be distributed to users for free. Supply is capped at 100 billion units, with roughly 95% of this amount being given away.

Stellar also sports a diverse leadership and advisory team. Noted board members include former Square Chief Operating Officer Keith Rabois and Stripe CEO Patrick Collison. Dogecoin co-founder Jackson Palmer and AngelList co-founder Naval Ravikant will also serve as advisors for the project.

Break from Ripple continues

The launch of Stellar cuts McCaleb’s remaining ties with the Ripple project.

In May, McCaleb announced his intention to sell his holdings of XRP, the native currency of the network. His statements, posted to the XRP Talk forum, caused a rapid XRP sell-off, with the value of the currency declining 40% following the news.

Despite his post, however, McCaleb has not yet sold the XRP, which he was awarded when he joined the company. When Ripple set aside 20 billion XRP for distribution amongst its founders, a 9 billion slice was awarded to McCaleb.

McCaleb was the original founder of OpenCoin, developing its protocol and later serving as its CEO. The company later changed its name to Ripple following the addition of current CEO Chris Larsen. In interviews, McCaleb described OpenCoin as an attempt to build a bitcoin network that did not rely on mining to process transactions.

Source : http://www.coindesk.com

Silk Road 30,000 bitcoin auction causing stirs, what happens when it’s 144,341 bitcoin

We did not expect the US Marshals Service to release information about the auction of Silk Road bitcoin last week but in the absence of information speculation both on the markets and on the internet is building.

First Barry Silbert, Founder of SecondMarket and BitcoinTrust has tweeted that they were outbid on all blocks.

Since then Alex Walters (a former core Bitcoin developer and the then chief technology officer of Bitinstant) has posted on reddit  saying “I Lost” in his $400 to $500 per coin.  That post was closely followed by another reddit user saying that his bid of $451.13 per coin was also unsuccessful.

Routers is also now reporting that investment firm Pantera Capital  has also been notified that their bids were also unsuccessful.

Meanwhile the actual price of bitcoins of the various exchanges has risen close to 15% from just under $600 a coin to close to $650.

In the end, we may never know who bought the confiscated coins or how much they bought them for but it does seem that it will be a pivotal point in bitcoins evolution.

It is anyone’s guess what will happen when they decide what to do with the remaining 144,341 bitcoins.

Backstory: It has now been close to 10 months since the FBI raided Silk Road, Arrested the Dread Pirate Roberts (named Ross William Ulbricht in real life) and  shut down the hidden tor service.  Silk Road had the somewhat seedy reputation of being the Amazon.com of illegal drugs.

In the following months the FBI collected up the pirates stash into two separate piles, the first in the bitcoin address  1Ez69SnzzmePmZX3WpEzMKTrcBF2gpNQ55 totals staggering 29,658.80112195 BTC (or somewhere about $19 Million US Dollars) and is believed to be the funds that the users of Silk Road had deposited at the time of the raid.  This is the bitcoins that has just been auctioned by the US Marshal Service to the highest bidder.

The second amount stored in 1i7cZdoE9NcHSdAL5eGjmTJbBVqeQDwgw is even bigger, totalling just over 144,341 BTC (or over 93 Million USD) is believed to be the pirates personal hoard and is now in civil forfeiture waiting for further developments in the case.

According to the US Marshals Service there were 45 bidders that paid a $200,000 USD deposit in order to take part in the bidding of the parcels of bitcoin split into nine 3,000 BTC lots and a single  block of  2,646 BTC.  The the auction, which ran from 6am EST to 6pm EST on 27th June and has now closed.

By Neil Fincham
Source: Mine Foreman

Peter Todd Joins Viacoin Development Team as Chief Scientist

 

Bitcoin Core developer and current Coinkite advisor Peter Todd has been hired by the Viacoin development team to work on a Bitcoin 2.0 technology concept.

Todd will serve as chief scientist and advisor on both the Viacoin core project and the decentralized smart contract platform ClearingHouse, which is being developed in tandem with Viacoin.

The primary focus of his work will be treechains, a concept created by Todd that allows for block chain scalability and side-chain coordination. Furthermore, treechains promote a greater degree of mining decentralization – a key issue facing the digital currency community today.

According to the official announcement, posted on the viacoin development blog, Todd’s work will allow for greater versatility and complexity of block-chain utilization – something that will enable the technology to be used on a larger scale in the broader economy. Tree Chains will ultimately be integrated into viacoin, serving as the basis of a broader build-out of its block chain and the protocols being developed for it.

Todd told CoinDesk:

“My goals with treechains are permissionless development, decentralizing mining, and making bitcoin scale. I want to allow anyone with a new idea for a decentralized consensus system the chance to compete on a level playing field; treechains is that playing field.”

The growth of Bitcoin 2.0

As a developer, Todd is no stranger to either decentralized smart block-chain platforms or Bitcoin 2.0 projects. In addition to his work with Coinkite as chief naysayer and the Bitcoin Core project, Todd has been involved with the development of mastercoin, Counterparty and coloured coins. Notably, Todd resigned from the Mastercoin project following the announcement that he was working with the Viacoin team.

ClearingHouse, like Counterparty – a platform on which ClearingHouse is based – allows for the creation and deployment of a variety of smart contracts and actions. Todd’s treechains concept enables greater coordination and communication between block chains, a potential application that would make smart transactions simpler to conduct.

As such, the impact on digital currency development is significant. Viacoin told CoinDesk:

“Giving Peter the necessary resources to research and develop treechains will have a lasting impact on decentralised consensus-based systems. Mining centralization is an undisputed problem and if you extrapolate it to its logical conclusion, will spell the death of decentralised consensus.”

Source : http://www.coindesk.com

Introducing quick sell: Sell your bitcoins faster and safer

 LocalBitcoins has released a faster and safer way to sell your Bitcoins: Quick sell. The new feature is especially helpful when paying bills with Bitcoin.

 Quick sell is visible in your dashboard after logging in. 

How quick sell works

 Start by selecting payment method, currency and country (if required). Next, choose the amount you wish to sell. At this point, Quick sell shows the estimate how many Bitcoins would be needed for the transaction. Finally fill in the required details and click “Send trade request”.

Quick sell goes through all matching LocalBitcoins bitcoin buy advertisements from reputable traders. It chooses the advertisement with the best exchange rate and then makes a trade request .

The bitcoin buyer pays the transaction with the payment details you provided. If you have bills you can directly give the bill payment details in the quick sell form. (This works very well with national bank transfers, but may not be available in every country yet.)

Please note that some advertisements require SMS verification and other verifications - enable them to get access to advertisements with better prices. 

Paying a 100 € phone bill.

By Henrik Heino
Source: Local Bitcoins

Bitcoin-to-Gold Service Faces Class Action Over Alleged Fraud

 

Bitcoin-to-gold website Coinabul LLC is facing a serious federal class action alleging that it defrauded some of its clients.

The leading plaintiff is Yazan Hussein, who claims he transferred 1,644.54 BTC to Coinabul last year, but did not receive the gold he ordered.

The federal complaint was filed in Illinois on 25th July. It names Coinabul and its CEO Jason Shore as defendants. Hussein demands a jury trial.

Hussein turned to Edelson law for representation, the same firm heading the Mt. Gox class action in the US. Chris Dore, a partner at the firm, told CoinDesk that Hussein reached out to the company after trying to resolve the Coinabul dispute for close to a year.

Dore explains:

“Once we were contacted by our client, we looked into it and this problem [is] widespread. There are countless complaints of people having the same experience where suddenly they stopped responding and stopped sending any product in exchange for the bitcoins. We did file it as a punitive class action and we do intend to pursue it as a class.”

Dore added that Edelson wishes to pursue the complaint as a civil matter to ensure that all bitcoins involved in unfulfilled transactions are returned.

“The contracts that were entered into were simply not performed and [Coinabul] showed no ability or interest in performing those contracts,” he said. “What we want – and what we feel is best – is for all the bitcoins to be returned, and then everyone simply goes forward and that is the end of the case.”

Dore said Edelson has not been in touch with Coinabul yet.

No shipments since last June

The suit alleges that Coinabul stopped honouring its sales more than a year ago, back in June 2013. However, Coinabul continued to take orders and accept bitcoin payments for precious metals it did not have in stock, the plaintiffs claim.

The complaint describes the nature of the case as follows:

“Defendants run an online marketplace called ‘Coinabul’ where consumers may exchange ‘bitcoins’ – a new form of digital currency – for physical denominations of silver or gold. Unfortunately, rather than delivering the metals promised to their customers, defendants chose to capitalize on the lack of effective regulatory oversight in this burgeoning industry, and instead defrauded their customers out of millions of dollars worth of bitcoins.”

The plaintiffs claim Coinabul stopped shipping the promised gold or silver and thus unlawfully misappropriated millions of dollars worth of customers’ bitcoins.

Delays, excuses, more delays

The complaint states Coinabul unexpectedly stopped shipping precious metals to their customers approximately two years after it was founded in 2011. This caused a backlash, especially on bitcoin forums such as bitcointalk.org.

Coinabul responded to the controversy by taking part in online discussions and apologising for “longer-than-usual delays”.

The company went on to issue additional ambiguous statements in an attempt to alleviate customer concern over the unfulfilled orders. Then, in July 2013, Coinabul sent an email to customers claiming that it was unable to find a bank willing to take its business.

However, in the email Shore claimed that a “large portion of outstanding orders” had already received tracking numbers and were en route to customers.

The complaint alleges the company never stopped accepting bitcoins for new orders, although it had no intention of fulfilling them.

Hussein’s history with Coinabul

Hussein claims Coinabul still owes him 1,644.54 BTC. The unfulfilled orders were placed between 22nd-24th June last year.

Prior to these unfulfilled orders, Hussein spent approximately 1,400 BTC on gold coins and bars from the website. However, these shipments were fulfilled within several weeks.

Dore explained:

“The long and the short of it is that he last year did some successful business with Coinabul where he transferred bitcoins and they gave him precious metals. He tried to do it again and transferred the bitcoins over and nothing came back. Time passed and time passed.”

After noticing that his last two orders were not fulfilled in a reasonable timeframe, Hussein began contacting Coinabul in July 2013.

Following an email exchange he decided to ask for his money back on 4th September. However, Coinabul informed Hussein that he was at “the mercy of the banks” and that the company could not fulfil any orders.

Over the next few months Hussein said he merely got vague excuses for why his orders were not shipped. Eventually he decided to take legal action.

Crucially, the complaint states that the exact number of class members is unknown to the plaintiff, but it points out that Coinabul received “over a thousand” orders. It is unclear how many of these remain unfulfilled.

“We have been contacted by other people, so it’s definitely not isolated,” said Dore. “I can’t really say [how large the class is]. It’s not gigantic, if I had to guess, I would say it’s in the thousands.”

Source : http://www.coindesk.com

Coinbase Drops Bitcoin Processing Fees for Non-Profits

In all the excitement yesterday over Wikipedia’s new partnership with Coinbase, another significant piece of news from the bitcoin company got rather overshadowed.

Notably, the payment processor announced that it will waiver all fees for registered 501(c) non-profit organisations accepting bitcoin through its merchant tools.

On its blog, the company explained why the move is beneficial for charitable organisations to start accepting the digital currency:

“The Internet has made it easier for non-profits to operate by enabling them to increase geographic reach and reduce the overhead required to fundraise. Adding bitcoin as a donation option is a natural next step for non-profits because it eliminates one of the most significant costs remaining – payment processing fees.”

The announcement continued that any non-profit accepting bitcoin through the company would be able to instantly exchange its bitcoin donations for US dollars and receive a daily bank transfer without incurring any costs.

Lower costs boost causes

At any charitable organisation overheads inevitably eat into donations, taking away much-needed funds from the intended recipients of the money. Charitynavigator.org even cites some highly-rated charities losing over three-quarters of their funds in this way.

The percentage of funds lost to expenses is an issue that charities themselves take seriously and one that can sometimes put people off giving.

Along with premises, staffing and other day-to-day essentials of running an organisation, donations will often incur fees from payment networks for their services. While PayPal offers a slightly lower rate for non-profits (2.2% + 30 cents per transaction, down from a standard charge of 2.9% + 30 cents), credit card tend to incur standard charges of around 1.5-3%.

Bitcoin, however, enables donors to give virtually 100% of their donation to the intended charity, with only a tiny fee going to miners.

Coinbase said that US donors may also enjoy significant tax deductions based on their bitcoin-denominated donations, although this may not be the case in every country.

Crypto-friendly charities

Apart from Wikipedia, most major non-profits do not yet accept bitcoin donations. However, some (such as UK charity Comic Relief) have said they are considering accepting the digital currency in the near future.

Furthermore, a number of smaller non-profits, including Sean’s Outpost, the Women’s Annex Foundation and some open-souce software organisations, already accept bitcoin alongside other cryptocurrencies.

In particular, the dogecoin community has proven very supportive of efforts to spread goodwill by donating to those in need, recently fundraising for a charity: water campaign to build much-needed wells in a drought-hit region of Kenya.

Source : http://www.coindesk.com

Overstock’s CEO Wants to Issue Stock on the Blockchain, Pay Employees in Bitcoin

It’s been clear from the start that for Overstock CEO Patrick Byrne, cryptocurrency is more than the “Bitcoin bump.” Byrne is a staunch Libertarian, speaking at events like PorcFest 2014, and Bitcoin ties directly into his vision of what that means. Bitcoin, to Byrne, seems to be a tool of freedom, and a way to break the hold of central banking on the western world. Shortly after Overstock began accepting the cryptocurrency via a partnership with a Coinbase, Byrne was quotes as saying,

“We want a money that some government mandarin can’t just whisk into existence with a pen stroke.”

Overstock.com, one of the largest online merchants, with $1.3 Billion in annual sales, began accepting Bitcoin in May, following a keynote announcement by Byrne at BITCOIN 2014, an industry conference. Since then, the company has begun to hold 10% of its Bitcoin revenue in Bitcoin, and has made other motions of support, including funding Bitcoin research with three percent of their Bitcoin profits. Now, over the last few days, the company has announced a desire to do more — a lot more.

In a page created on Saturday on an Overstock website, the company discusses a number of ways of using the Bitcoin blockchain to issue securities (abstract financial assets that can be exchanged in a decentralized, pseudonymous manner), using a variety of different techniques, including Counterparty and NXT. This kind of cryptosecurity would be similar to a traditional corporate stock, but the trading and ownership would be enforced by a decentralized cryptocurrency network, rather than by a centralized exchange like NASDAQ or the NYSE. In the same way that Bitcoin moves control of money away from the central banks, a switch to this kind of system would move control of the stock market away from centralized stock exchanges. There are a lot of unsolved issues with issuing such a security, and Byrne wants to know if it’s possible – hence the web page, which aims to attract public comment, solutions, and discussion to held clarify some unresolved areas of the idea. That said, it’s likely that Overstock would seek SEC permission before issuing such a bond.

This kind of system would help to make issuing stocks more approachable for small businesses, and would make it possible for individuals to purchase equity in corporations in a way that is not currently possible: imagine a version of Kickstarter, where the backers are actual investors, and own a share of the corporate equity going forwards. It would also eliminate a number of unethical forms of trading, like naked short selling (the process of selling and asset without owning or borrowing it first, in an attempt to exploit short-lived arbitrage opportunities). It would also, of course, make enforcing financial regulation against, for example, insider trading more difficult, because it would be difficult for law-enforcing bodies to determine who owns a particular cryptosecurity in order to determine if legal action needs to be taken. Cryptosecurities would also put hard brakes on the minimum transaction time for high frequency trading due to the relatively large transaction confirmation times of Bitcoin, reducing the profitability of that industry (whether or not this is a good thing is, of course, up for debate).

If Overstock goes through with it, it’ll be the first publically traded company to issue such a security, a move that could kick off an entire Bitcoin stock market, likely with disruptive implications for the finance industry. Investigating the issue further, Wired quoted James Angel, a Georgetown University professor of finance, who says that he thinks cryptosecurities are “a really interesting idea.”

“The biggest hurdle is institutional inertia. [...] When you talk about the stock settlement system, you’ve got over 4,000 broker-dealers involved in the process, and it’s not something that’s easy change.”

Byrne himself is a little bit blunter.

“I wish to provide the world a way to give Wall Street some payback, in the form of a massive hot fudge high colonic that would be a cryptosecurity.”

This announcement was followed today by the revelation that Overstock would be offering its employees the option of taking their bonuses in Bitcoin. To incentivize them to take it, employees will be offered a premium over cash if they take it as Bitcoin. While most employees will likely sell their Bitcoin bonuses for USD immediately, many of them will probably choose to make any purchases that they can and need in Bitcoin (to avoid the loss of transaction fees on that money). This will stimulate the Bitcoin economy in a small way, and also help to push the idea of Bitcoin as a legitimate currency in the eyes of the public. With any luck, other companies will be willing to follow in Byrne’s footsteps.

Source : http://thebitcoinnews.co.uk

Bitcoin ASIC Miner Company Rockminer and Its Community Success

Interview With Alex of Rockminer and Information Rockminer’s “Mining Everyone Project R100″

Rockminer is a community success story in the manufacturing area of Bitcoin ASIC miners. I had recently reviewed the R-Box ASIC miners from Rockminer and not only did I like the miner, I found that the community supports them robustly. With Rockminer being a new manufacturer, the risks of being passed over and not noticed were huge as happens to many new companies that bring miners to market. First they had the R-Box, and then the Rocket, now they have an R3-Box which I will have a review of soon as well. The R4-Box is in development. I contacted Rockminer and was able to get a hold of Alex, head of the overseas department and sales of Rockminer, for an interview. He told me about their Mining Everyone: Project R100 (ROCKMINER’s 100 Experience Hot Spots Over the World) a very aggressive new way to demonstrate Rockminer’s commitment to the cryptocurrency community in general.

“The Mining Everyone: Project R100 (ROCKMINER’s 100 Experience Hot Spots Over the World) is a great way to introduce people to mining and Rockminer’s miners. By leveraging the Bitcoin and Crypto Currency communities expertise to help exhibit the power of their miners and the ease of use of newer ASIC miners, it will help more people get into mining. Rockminer is looking to do this worldwide. I applaud this project as we need more people interested in mining to help keep it decentralized. Here is a bit about it from their website.”

R3-Box Sneak Peek

As you can see, The Mining Everyone: Project R100 is a worthy cause to get behind. Rockminer is bringing mining directly to more and more people in a real and fun way. With Rockminer sending mining rigs to the administrators to publicly show off mining, the publicity will be great. I live in the middle of nowhere, or else I would be signing up right now.

Alex and I had an interview recently. He helped shed some light on a couple different facets of Bitcoin mining hardware manufacturing, such as how they tie down pricing in BTC and a few of their other challenges.

Source : http://www.cryptocoinsnews.com

Bitcoin Megaphone: Speak Your Mind

 

Bitcoin Megaphone is a revolutionary first-of-its-kind micro-publishing platform that allows people to anonymously speak their peace in an un-moderated, free speech preserving format. What makes this business model truly unique within the Bitcoin ecosystem, is that it is on a pay-per-character basis. While short posts cost mere pennies, the more you have to say, the more bits you have to pay.

Mike Solomon, owner of Bitcoin Megaphone, graciously took a few moments out of his busy day for a short CCN interview.

Bitcoin Megaphone Interview

MB: What exactly is Bitcoin Megaphone?

Solomon:

Bitcoin Megaphone is the world’s first pay-per-character publishing platform. That’s a fancy way of saying it’s a public blog where anyone can post anything they want for .00001 BTC per character, completely anonymously.

In this regard, it’s like Twitter, but instead of being limited to 140 characters, you’re charged per character. So the only limit to the size of a post is the size of your wallet. Also, each post creates a virtual “tip jar” that can accept donations, and only the post’s author has the private key. This allows the authors to claim 100% of their tips while maintaining their anonymity.
This is where things get interesting. Every time someone creates a post, a “virtual tip jar” is automatically generated for that post. Each post has its own unique tip jar, and it’s baked right into each post’s URL.
And here’s the kicker – only the original creator of the post is given the keys to the tip jar. This is possible thanks to the ingenious system of public/private key generation that’s a part of the Bitcoin system. So anytime you see a post on Bitcoin Megaphone, you can send money to it and the author gets 100%.
This lets people get a return on their investment, and offers incentive to post and share funny, engaging, or timely content. Getting social currency in actual money is much more enticing than the meaningless Retweets and Likes we’re all so obsessed with.

MB: Can you share the inspiration behind creating Bitcoin Megaphone?

Solomon:

When I first started learning about Bitcoin in March 2014, I was shocked at how new the technology was and the relatively small (but growing) size of the community. I wanted to create something that was simple, fun, and could only be made with Bitcoin. Before Bitcoin, a service like this wouldn’t have been possible.

MB: Any new exciting features in the works?

Solomon:

Most of the development I’m doing these days focuses on security and ease of use. The basic mechanics of the ecosystem are set, so I’m working to sure it up and position it to scale. A good portion of my time is spent doing outreach. I feel like the site can be a huge benefit for authors, artists, and poets who in the past have notoriously found it difficult to self-publish and monetize.

MB: What would you say is the one really underutilized feature of Bitcoin megaphone is?

Solomon:

As the site grows, I see hashtags becoming a vital part of categorizing the information. There are still so few hashtags that people have used, which means there’s a lot of potential for people to claim the earliest and most visible posts for new hashtags. I’m also planning an API so that people can take the data and process it in new and interesting ways.

MB: What are some of your personal favorite posts?

Solomon:

There’s already a post that cost $15 where someone jokingly referenced the infamous Nigerian Prince scam email. It hasn’t gotten any tips yet, but I applaud the author’s balls.

MB: Speaking of posts, what do make of that crazy 5 BTC tip?

Solomon:

My guess is that people are tipping their own posts to boost their visibility. There’s no real way to prevent this, but viewing by “most tipped” is sure to attract some spammy behavior.

MB: Any other exciting Bitcoin or altcoin-related projects that you are working on?

Solomon:

This is really my only foray into BTC and cryptocurrency for now. My day job is working for Conde Nast in digital advertising, so I’ve got kind of a Dr. Jekyll and Mr. Hide thing going on… by day I work in legacy media and by night I work to subvert it by exploring new publishing paradigms and revenue streams. It’s important to note that Bitcoin Megaphone and Conde Nast are in no way affiliated, whatsoever.
Before Bitcoin, it would have been impossible to create a website like this. There are no credit cards to hook up, no user accounts to create and spam with marketing emails; no annoying ads that disrupt the experience of exploration and discovery; no annoying comments to moderate. It’s just content and micropayments.
There are a lot of smart and talented people looking at micropayments as the future of online publishing. Personally, I have no idea how things will shake out, but I’m excited to keep watching this living breathing ecosystem evolve. Right now on the Internet, text is a commodity (think of those walls of text on your crazy friend’s Facebook page). Bitcoin Megaphone transforms strings of text from a commodity to a unique store of value.

Source : http://www.cryptocoinsnews.com

Bitcoin to Gold : Coinbul faces "Class Action" alleging Fraud

 

 

Bitcoin to Gold company Coinabul, a company that claims to be “The first Bitcoin to gold service,“, is facing a ‘Class Action’ lawsuit alleging that the company has been involved in committing fraud. On a personal level, I bought .76 Bitcoin worth of gold on may 3rd, and I’m still waiting. Yazan Hussein claims that he paid 1,654.54 bitcoins to Coinabul last year and has, up to date, received no gold. He filed the Federal complaint in Illinois on July 25th naming Coinabul and its CEO, Jason Shore, as defendants.

Edelson Law, the firm involved in the class action against Mt Gox, is representing Mr. Hussein in the class action. Chris Dore, a partner at Eldeson, states:

“Once we were contacted by our client, we looked into it, and this problem [is] widespread. There are countless complaints of people having the same experience where suddenly they stopped responding and stopped sending any product in exchange for the bitcoins. We did file it as a punitive class action, and we do intend to pursue it as a class.”

Eldelson claims that Coinabul shipped the most recent precious metals as far back as June 2013. They have however continued to take Bitcoin payments and simply not send out stock, thereby committing a fraud. It is stated that they have, over this period, received millions of dollars in payments, made by customers acting in good faith.

Dore went on to explain: “Defendants run an online marketplace called ‘Coinabul’ where consumers may exchange ‘bitcoins’ – a new form of digital currency – for physical denominations of silver or gold. Unfortunately, rather than delivering the metals promised to their customers, defendants chose to capitalize on the lack of effective regulatory oversight in this burgeoning industry, and instead defrauded their customers out of millions of dollars worth of bitcoins.”

My own experience of Coinabul is small change, I bought gold successfully from Bitgild and also from Agora Commodities, there were no problems. I placed a small order with Coinabul and after a month or so, sent an email, they assured me that the order would be dispatched in the immediate future. The order has not, and will not, arrive. The problem with companies like Coinabul is that they give legitimate businesses a bad name. I am contemplating joining the class action. Coindesk has a copy of the full lawsuit here. There is a strong case for research in online purchases. I have written about this before here.

Perhaps Eldelson Law is a company that finally recognizes the need to represent the cryptocoin community. If they are, they may well make quite a bit of money out of the cases that will come to their door. Edelson Law is pursuing the action as a civil matter to make sure that all defrauded bitcoins are returned to their rightful owners.

Strangely enough, although Coinabul has stopped shipping orders their website continues to update their gold and silver prices as well as taking, and not refunding the bitcoins they receive in payment. Good luck defending the class action lads.

Source : http://www.cryptocoinsnews.com