Dark Web Alleged Silk Road Conspirator Handed to US Authorities

Dark Web Alleged Silk Road Conspirator Handed to US Authorities

Dark web alleged Silk Road conspirator, Gary Davis of Ireland, agreed recently to be extradited to the United States. Once on US soil, he will face charges levied against him five years ago in connection with the eventual conviction of Ross Ulbricht (who prosecutors claim was the site’s mastermind). Mr. Davis, should he be convicted, would receive a life sentence.  

Also read: US Presidential Candidate Would Pardon Snowden, Ulbricht on First Day

Alleged Silk Road Conspirator Extradited to US

A visibly upset Roger Ver, CEO of Bitcoin.com, took to his personal Youtube channel, wearing a Freeross.org t-shirt. Mr. Ver set about reminding viewers of two ominous happenings in recent weeks as they related to the crypto community. Ross Ulbricht’s appeal to the Supreme Court of the United States was refused, upholding a Circuit Court decision affirming his life sentence without the possibility of parole. He, Mr. Ver also reminded, has been languishing in prison for half a decade now.

Mr. Ver also lamented news a former employee at Bitcoin.com, Gary Davis, 29, was to be extradited from his native Ireland. Mr. Davis faces charges stemming from his alleged involvement in Silk Road. Silk Road was an online marketplace, one credited with demonstrating a use case for cryptocurrency as peer to peer cash. The site matched buyers and sellers, and often those voluntary exchanges ran afoul of US law.

Dark Web Alleged Silk Road Conspirator Handed to US Authorities
Gary Davis

Mr. Davis was arrested by Irish law enforcement after US Judge James C. Francis IV, of the United States District Court for the Southern District of New York, outlined three counts of indictment: conspiracy to distribute narcotics, conspiracy to commit computer hacking, and conspiracy to commit money laundering. US prosecutors asked Mr. Davis be extradited as far back as early 2014.

As of late June of the present year, Mr. Davis waived his final appeal from being sent to the United States, and essentially agreed to extradition. He was forced to capitulate shortly after Ireland’s highest court ruled 5-0 the process engaged in by US and Irish law enforcement was legal. Mr. Davis had two days to further appeal to the EU Court of Human Rights. He declined.

Mistaken Identity, Isolation

Mr. Davis will be caged in New York’s Metro Correctional jail, presumably until trial or plea. In advance of just this scenario, a legal team has already been assembled in the US, sources explained. They will have their work cut out for them if Mr. Ulbricht’s plight is any indication of what’s in store. The original Federal Bureau of Investigation (FBI) indictment pegs Mr. Davis as “Libertas,” allegedly Mr. Ulbricht’s right hand at Silk Road. The site was said by the FBI to have generated in excess of a billion dollars, with Mr. Ulbricht’s take in the teens of millions. Law enforcement officials in the US claim Mr. Davis was paid $6,000 a month to be a kind of customer service representative at Silk Road.  

Mr. Davis had been fighting extradition based on his Asperger’s syndrome spectrum, arguing health care wouldn’t be of similar quality in the US while awaiting justice in this matter. Speaking for the Irish Court, Judge McKechnie explained Mr. Davis’ defense did not ultimately constitute an obligation upon the government of Ireland, and cleared the way for his being handed over to US authorities.

Dark Web Alleged Silk Road Conspirator Handed to US AuthoritiesDuring his four year appeal process in his native country, Mr. Davis reportedly explained to a psychiatrist the entire case was due to mistaken identity. A copy of his passport on Mr. Ulbricht’s hard drive, he noted, was a mystery. Mr. Ver, in his video, highlighted how Mr. Davis had never been to the United States, and would essentially be uprooted from everything he’s ever known.

Indeed, Mr. Davis’ defense made a similar argument about isolation in the United States. An Irish Justice agreed, stressing he wished to emphasize how he “in no way seek to diminish or trivialise the very real concerns and worries of the appellant and his family as he faces the prospect of extradition to the United States and being imprisoned there. Such a prospect would be daunting for an individual in robust mental health let alone someone coping with a significant mental health condition.”

Is the Silk Road case an important story for the crypto community? Let us know in the comments section below. 


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Bitcoin Businesses Denied Banking Services in Ireland

Bitcoin Businesses Denied Banking Services in Ireland

Leading companies from the crypto sector in Ireland have complained they are being denied services by some of the country’s major financial institutions. Among the affected businesses are bitcoin exchange Bitcove, winner of the bank-sponsored “Best Business Startup” award, and Ireland’s “longest running” bitcoin broker, Eircoin.  

Also read: Swiss Crypto Company Acquires License to Distribute Funds to Investors

Banks Close Accounts of Award-Winning Startup

Several Irish businesses have been forced to either stop trading cryptocurrencies or seek partners abroad after local financial institutions refused to offer them banking services. Some of them have lost their bank accounts, while others have never been allowed to open one in the country, the local press reported.

Bitcoin Businesses Denied Banking Services in Ireland

Bitcoin exchange Bitcove, which has been operating since 2014 and had previously worked with Allied Irish Banks (AIB), Permanent TSB and Bank of Ireland, is one of the affected companies, The Irish Times reported. One of its co-founders, Peter Nagle, told the newspaper the banks closed its accounts stating they do not support companies offering cryptocurrency exchange facilities. The trading platform has since been using the services of “a more progressive banking partner” in Europe.

“Particularly disappointing was Bank of Ireland. We were participants on the Ignite startup program, which is backed by the bank. Our business and its progress were reviewed monthly by a panel which included Bank of Ireland representatives. At the end of the incubator Bitcove won the award, but then just a few months later our accounts were frozen and eventually closed,” Nagle explained.

One of Ireland’s First Bitcoin Brokers Also Hit

Bitcoin Businesses Denied Banking Services in IrelandAnother crypto firm that has suffered from the clampdown is Eircoin, one of Ireland’s oldest bitcoin brokers, which closed a couple of months ago. An affiliated consulting business was also refused banking services. “We are being shuttered due to a negligent and defensive banking system,” Eircoin’s cofounder Dave Fleming said, quoted by the Irish daily. He added that his company, along with other cryptocurrency sellers, had previously consulted with the Central Bank of Ireland which told them that as long as they were abiding by the regulations their operations were in line with the law.

Bank of Ireland, one of the four largest Irish commercial banks, admitted in a statement it was not providing banking services to virtual currency exchange platforms, but noted that its customers were not prevented from transacting cryptocurrency. AIB Group, another “Big Four” bank, denied it was refusing services to companies from the crypto sector. A spokesman was quoted as saying, “We don’t discriminate in relation to providing banking services to cryptocurrency companies nor have we been systematically exiting such companies.” According to the official, some of these businesses are unable to comply with the anti-money laundering and know your customer requirements that the bank is obliged to adhere to.

Bitcoin Businesses Denied Banking Services in IrelandThe Banking and Payments Federation of Ireland (BPFI) stated that it wasn’t aware of any policy to close accounts of companies trading cryptocurrencies. However, the organization presenting 70 traditional financial institutions noted that Irish lenders are expected to take measures to minimize the risk of facilitating “financial crimes which are enabled by cryptocurrencies,” such as money laundering and terrorism financing.

Sharp Contrast

The negative attitude of the legacy financial institutions towards crypto businesses sharply contrasts with the view of Ireland as a crypto-friendly jurisdiction in general. Recently, it was reported that a new government-backed platform will promote the country as a hub for developers of applications based on the technology behind cryptocurrencies. Blockchain Ireland was launched by the Irish Blockchain Expert Group in partnership with a young company called Consensys. The initiative is supported by Enterprise Ireland, the Department of Finance, members of the industry and representatives of academic institutions. The agency promoting foreign investment in the country, IDA Ireland, has also backed blockchain and crypto projects.

Bitcoin Businesses Denied Banking Services in Ireland

Cryptocurrencies and the related economic activities received another recognition by authorities in Dublin with the decision of the Irish revenue service to issue guidelines on the taxation of crypto transactions. The new “Tax and Duty Manual” clarifies related matters and confirms that in most cases the existing tax regulations apply to the crypto sector. According to the advisory, crypto incomes and profits are subject to direct taxes such as corporate tax, income tax, and capital gains tax. Officials have also stated that for VAT purposes bitcoin constitutes a currency. The Irish tax agency regards cryptocurrencies as “negotiable instruments” and exempts them from the value added tax.

Do you think the bank clampdown on crypto businesses in Ireland is temporary? Share your thoughts on the subject in the comments section below. 


Images courtesy of Shutterstock, Bitcove, Eircoin, BPFI.


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Study Finds Irish Crypto Userbase to Have Quadrupled in Four Years

Study Finds Irish Crypto Userbase to Have Quadrupled in Four Years

Research has indicated that Irish attitudes regarding cryptocurrency are increasingly positive, with the Irish cryptocurrency user base estimated to have quadrupled in last four years.

Also Read: Ireland Clarifies Taxation of Crypto Transactions

Study Finds Irish Crypto Sentiment to be Moving “From Suspicion to Curiosity”

Study Finds Irish Crypto Userbase to Have Quadrupled in Four YearsA study carried out by Amárach Research in partnership with communications firm Red Flag has found Irish citizens to be viewing cryptocurrencies in an increasingly favorable light. The survey queried 1,000 Irish citizens aged over 16 years, and claims to be “the first in a series” of polls examining Irish engagement with financial innovations.

The research estimates that 120,000 Irish citizens currently own cryptocurrency, a 300% increase in four years. In total, the study estimates that 180,000 Irish citizens have at some point owned BTC.

General awareness of cryptocurrency appears to have substantially increased following the significant media coverage of last year’s bull run, with 85% of respondents indicating that they were familiar with bitcoin – up from less than half of Irish adults in 2014 as was found in a separate study conducted by Amárach.

Millennials are Three Times More Likely to Own Cryptocurrencies

Study Finds Irish Crypto Userbase to Have Quadrupled in Four YearsUnsurprisingly, millennials were found to be the demographic most likely to engage with cryptocurrency, with 25 – 34 year olds estimated to be three times more likely to own crypto assets than the average person.

Despite the significant uptick in Irish crypto user adoption, Gerard O’Neill, the chairman of Amárach, stated that “Cryptocurrency advocates still have a long way to go in driving higher adoption in Ireland.”

Deirdre Grant, managing director of Red Flag Ireland, concluded that “This is a fast-growing sector in Ireland, particularly among young men. But, the level of understanding is still quite low, with one in eight respondents believing [cryptocurrencies] are used mainly by criminals.”

Irish Regulators Provide Tax Guidance for Crypto Users

Study Finds Irish Crypto Userbase to Have Quadrupled in Four YearsLast month, Ireland’s Revenue Commissioners published a manual seeking to provide clarity regarding the tax obligations of the nation’s cryptocurrency users.

The document asserted that businesses and individuals transacting in cryptocurrency will be taxed according to existing regulations, with gains and losses on cryptocurrency trades accruing capital gains tax for individuals and corporate tax on chargeable gains for companies.

Do you think that cryptocurrency is a topic that most people are now familiar with? Join the discussion in the comments section below!


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Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and Digital IDs

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDs

The city of Zug, home of the Swiss Crypto Valley, will invite its residents to take part in an experimental blockchain-based vote. They are expected to share opinions on several questions of local importance, including the fireworks display during the annual Lakeside Festival and the use of digital IDs to borrow books and pay parking fees. This and other fintech and crypto-related stories from the Alpine nation and other corners of Europe are featured in today’s edition of Bitcoin in Brief.   

Also read: Bitcoin in Brief Tuesday: POT Saves World, Coinbase Pumps ETC, Binance Wants EUR

Zug Experiments with Blockchain-Based Vote

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDsAuthorities in the Swiss city of Zug plan to ask local residents to participate in a consultative blockchain-based vote this month utilizing the city’s electronic ID system. They will be able to vote via their smartphones by downloading and installing an app. The experimental vote will be held between June 25 and July 1. Citizens will be asked if they are in favor of setting alight fireworks during the annual Lakeside Festival, and whether they think digital IDs should be used to borrow books from the library, pay parking fees, and for identification on regular referendums.

According to Swissinfo, the results of the vote will be non-binding. Nevertheless, the initiative, which aims to test whether blockchain can be used on a broader scale, highlights again the positive attitude of Swiss authorities towards cryptocurrencies and the underlying technology. The canton of Zug, dubbed Switzerland’s Crypto Valley, has become home to many fintech startups and even established crypto companies like the Chinese giant Bitmain, which has opened an office there.

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDsFor some time now, Zug has been accepting cryptocurrency payments for municipal services, including company registrations using bitcoin and ether. The city introduced its eID system to provide citizens with digital access to council services. The pilot phase of the project started last fall. The system is based on blockchain technology.

New Swiss Body to Simplify Capital Markets

In another example of Switzerland’s serious approach to fintech innovations, leading representatives of the country’s financial, technological, academic and legal sectors have recently formed the new Capital Markets and Technology Association (CMTA) to facilitate the use of blockchain in financial markets. In a press release, they noted that “the blockchain technology has the potential to reduce the complexity of the capital markets system and lower the barrier of entry for startups.”

According to CMTA’s founders, the lack of legal certainty is slowing and can potentially compromise development in the field. They hope to facilitate access to funding for new businesses by defining a set of industry-supported open standards. These should ultimately contribute to value creation throughout the economy said Jacques Iffland, CMTA’s chair and partner at Lenz & Staehelin, the largest Swiss law firm.

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDs

Swissquote Bank Ltd, a leader in online banking, and Temenos, which specializes in banking software, are also behind the initiative. CMTA promises to work to create toolkits that can be used by new or established companies, businesses and startups to access funding and raise capital securely and efficiently, using new technologies and leveraging digitalization. The association is based in Geneva.

Irish Blockchain Startup Delivering Aid to Refugees Raises €1m

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDsAn Irish startup, using blockchain to facilitate the distribution of humanitarian aid, has raised an estimated €1 million from investors, according to industry sources quoted by The Irish Times. The Dublin-based Aid:tech is working in refugee camps, often in hotspots like the Middle East. On Wednesday, Enterprise Ireland and SGInnovate, the venture capital arm of the Singaporean development authority, announced simultaneous investments in the Irish company. This is the first time both state-backed organizations have allocated funds to support a blockchain business, the Irish daily notes. Amsterdam-based Blue Parasol Investments and Tin Fu Fund, a closed private equity fund managed by Shenzhen Capital Group, also took part in the funding round.

Aid:tech aims to increase transparency in the distribution of aid, welfare, remittances, donations, and healthcare services through digitizing their delivery using blockchain technology on its platform. According to the company, only a fraction of the estimated €306 billion (~$360 billion) transferred each year by non-governmental aid organizations is currently delivered via transparent systems which, the startup claims, are extremely expensive to administer. The blockchain technology employed by the Irish firm would allow all international aid to be accounted for, including the distribution of medicine, food and other essentials, the publication details.

Government-Backed Platform to Promote Ireland as a Blockchain Hub

In an attempt to highlight Ireland’s capabilities in the blockchain ecosystem, authorities in Dublin have launched a new government-backed platform. Blockchain Ireland, founded in partnership with a young company called Consensys, aims to create conditions for greater cooperation between startups working in the sector, both on national and international level. The platform was launched by the Irish Blockchain Expert Group and backed by Enterprise Ireland, the Irish Department of Finance, leading members of the country’s blockchain industry and representatives from a number of academic institutions.

Bitcoin in Brief Wednesday: Zug Tests Blockchain to Decide on Fireworks and IDs

The online platform is a source of useful information about the Irish blockchain ecosystem. It will be used to promote the country as a blockchain hub by highlighting the Irish technology sector and business environment which turn Ireland into an ideal location for blockchain-enabled business, Silicon Republic reports. The services it will be offering include providing information on setting up a new company and support for blockchain projects in Ireland. Its activities, however, will stretch beyond Irish borders. Blockchain Ireland will be working to develop the European and international blockchain ecosystem as well.

What are your thoughts on today’s topics in Bitcoin in Brief? Let us know in the comments below.


Images courtesy of Shutterstock.


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Ireland Clarifies Taxation of Crypto Transactions

Ireland Clarifies Taxation of Crypto Transactions

The Irish revenue service has published a manual with guidelines aimed at eliminating the uncertainty surrounding the taxation of crypto transactions. Investors and traders of digital coins, businesses working with cryptocurrency and tax advisors, of course, can now find answers to many but not all of their questions. The notice has been issued at a time when tax authorities across Europe are trying to tap into crypto incomes and profits in the absence of dedicated regulations in most cases.  

Also read: Poland Backpedals on “Irrational” Crypto Tax After Strong Backlash

Cryptos to Be Treated Under ‘Normal’ Tax Rules

The “Tax and Duty Manual” issued by authorities in Ireland attempts to clarify matters related to crypto taxation and mostly confirms that the existing regulations apply to the crypto sector. The document provides guidelines on the tax treatment of various transactions involving cryptocurrencies. The Irish Revenue Commissioners, the government agency responsible for customs and taxation, emphasizes that the advisory published this month is to be used as a reference for tax purposes only, as it does not cover regulatory and other aspects.

According to the instructions, direct taxes such as corporation tax, income tax and capital gains tax are applicable but each case should be reviewed separately, according to the individual facts and circumstances. In general, businesses accepting crypto payments for goods or services should keep records of crypto transactions. No special rules have been introduced so far and taxable profits should be calculated according to the current tax legislation.

Ireland Clarifies Taxation of Crypto Transactions

The profits and losses of a company transacting in cryptocurrency must be reflected in accounts and are taxable under “normal CT rules,” the document states. Ireland’s Taxes Consolidation Act from 1997 recognizes that some businesses operate and prepare their accounts in a “functional currency” other than euro. The authors of the manual point out, however, that cryptocurrencies cannot be considered functional currencies as defined in Section 402(1) of the TCA. Therefore, accounts for tax purposes cannot be maintained in crypto. Instead, euro or other fiat currency should be used.

Irish tax officials have explained crypto income taxation, as well. “Profits and losses of a non-incorporated business on cryptocurrency transactions must be reflected in their accounts and will be taxable on normal income tax rules,” the notice reads. They have also informed taxpayers that gains and losses incurred on cryptocurrencies are chargeable or allowable for capital gains tax if they accrue to an individual, or for corporate tax on chargeable gains for companies.

Bitcoin Is Currency as Far as VAT is Concerned

In the absence of common European guidelines on how to treat cryptocurrencies for tax purposes, many member-states have decided to base their VAT (Value Added Tax) policies on a ruling by the Court of Justice of the EU from 2015. The Luxembourg-based institution has drawn a parallel between “virtual currencies” and fiat money, when they are used for payments. The Republic of Ireland is now joining these countries confirming that bitcoin constitutes a currency for VAT purposes.

Ireland Clarifies Taxation of Crypto TransactionsIn result, cryptocurrencies like bitcoin are regarded as “negotiable instruments” and exempt from VAT in accordance with the Irish VAT Consolidation Act of 2010. The manual notes this applies to companies buying and selling cryptocurrencies and acting as owners of crypto holdings. On the other hand, value added tax is due from suppliers of goods or services sold for cryptocurrencies. The taxable amount, however, should again be calculated in euro and at the time of the supply.

The Irish Revenue Commissioners point out that the value of bitcoin and other cryptos may vary between trading platforms. In the absence of a single exchange rate, a “reasonable effort should be made to use an appropriate valuation for the transaction in question,” the manual says, without detailing what “reasonable” and “appropriate” may mean in practice.

Income received from mining operations will generally be outside the scope of the value added tax. Crypto mining is not considered an economic activity for VAT purposes yet. It’s worth noting that no instructions have been given on the taxation of incomes, profits and other flows related to initial coin offerings. The document issued by the Irish revenue service does not say anything about digital tokens and token sales.

Do you think the Irish tax manual provides enough clarity in regards to crypto taxation? Share your opinions in the comments section below.  


Images courtesy of Shutterstock.


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