Henry Sapiecha


Henry Sapiecha

bitcoin 400 fred wilson

Motherboard, a blog run through Vice Media LLC, was recently given a tour of a bitcoin mining facility in Dalian, a port city in Liaoning Province, northeast China.

The mine, located on the second floor of a repurposed factory, generates 4,050 bitcoins a month, the equivalent of around $1.5 million, according to Motherboard:

“Despite its dystopian appearance, the group’s six mining farms encompass eight petahashes per second of computing power, whose brute force, as of October, accounted for 3 percent of the entire Bitcoin network.”

Bitcoins – a digital currency that can be transferred instantly between two people anywhere in the world – are generated by “mining” them with custom-built computers. Wikipedia compares the process to “a continuous raffle draw [where] mining nodes on the network are awarded bitcoins each time they find the solution to a certain mathematical problem (and thereby create a new block). Creating a block is a proof of work with a difficulty that varies with the overall strength of the network.”

“To put it simply, we’re racing to find an answer on the Internet,” said Jin Xin, Bitcoin Mine Manager, in a video shot during a site visit. “Whoever does the correct calculation will be rewarded. The rewards are bitcoins, a virtual currency.”

At its peak, the Changcheng factory churned out 100 bitcoins a day at each of its six sites, but the group of entrepreneurs is finding that as the level of difficulty and computing power increase, the ratio is gradually changing. The process uses about 1,250 kilowatt-hours of electricity, and the group’s monthly electricity bill is about $80,000. They are currently mining from 20 to 25 bitcoins a day.

The facility has about 3,000 “miners,” which are computers that connect to the Internet and churn out algorithms whose correct queries are then generated an award in the form of a “bitcoin” – which is really just a number associated with a bitcoin address.


Henry Sapiecha

fiona-geminder-pratt image

Fiona Geminder is one of Australia’s richest people, but you’re unlikely to know it given the privacy and secrecy in which she shrouds her life.

While a lot of the richest people in the world like to flaunt their wealth, or at least use their name to drive their business or philanthropic work forward, Geminder has almost no public profile at all. She does not give interviews and there are hardly any photographs of her

Despite her vast wealth – estimated by Forbes to be around the $2 billion mark (AU$2.27 billion) – Geminder is little known and would not be recognised on the street by most people.

When we mention her family name, however, you might have a bit more of a clue as to just who she is. Geminder is one of the daughters of Australian box magnate Richard Pratt, who died after a battle with prostate cancer in 2009.

Pratt was born in Poland to Jewish parents and built Visy Industries into one of the leading companies in Australia, earning a fortune worth more than AU$5 billion before his death.

The Pratt family is therefore one of the richest in Australia, with son Anthony the second richest person in Australia, but Fiona Geminder has mainly shunned the spotlight and her father’s funeral over five years ago was one of the last times she was pictured in public.

Fiona is married to Raphael Geminder, who is the chairman of the Pact Group, another of Australia’s leading packaging companies.

This video gives an insight into Pact Group and its business strategies.

While the Geminders live an extremely private existence, one controversial aspect of their lives is the link between the family and the two companies: Visy and Pact.

While Anthony Pratt has led Visy since the death of his father and built it up even further into one of Australia’s top companies, the Geminders have instead focused on the Pact Group.

However, the two companies are essentially rivals and as Fiona retains a substantial stake in Visy, there is occasionally speculation about friction between the Pratt heirs over the difficult business relationship between the two firms.

While Fiona shies away from publicity, her husband Raphael has to speak to the press more often as a result of his position as Pact’s chairman and the media has often speculated that Raphael – sometimes known as Ruffy – does not get on well with Fiona’s brother Anthony.

Visy was recently reported to have won a $55 million packaging contract from Pact for the drinks company Lion.

Raphael previously said in an interview: “I don’t think there is any difference between Visy and any other competitor. Losing a customer is a painful experience, period. It doesn’t matter where the pain is. It is like saying, ‘Is it more painful if you smash your finger whether it is a thumb or a pinky?’ They are all fingers.”

Fiona has avoided commenting on the rivalry between her brother and husband and while she has a stake in both Visy and Pact, it is not thought she plays an active role in the running of either firm, acting in an owner’s capacity at Visy and as a sort of sleeping partner at Pact.

This video gives an insight into the corporate profile of Pact Group.

While Pact is perhaps less well known than Visy, its flotation in December 2013 valued the company at close to $1 billion, making Fiona and Raphael two of the richest people in the world.

Pact was established by Raphael in 2002 and he is now pursuing a five-pronged strategy in a bid to make it one of the biggest and most dominant packaging companies on the planet. But Visy is likely to remain a major competitor to Pact whatever direction the two firms go in.

Indeed, Pact was once a part of Visy before it was split and Raphael took control of the business. And as Raphael is believed to be in favour of mergers as part of his growth strategy for Pact, it is not impossible that Visy and Pact could one day be the same company once more. Pact and Visy do currently work together on a few contracts, but the two firms do not have a close relationship.

It is difficult to pinpoint how much of Fiona Geminder’s wealth was inherited after the death of her father and how much of it has been amassed as a result of Visy and Pact’s success in recent years, but it is certain she is one of the richest billionaires in Australia.


While Fiona and Raphael Geminder have made a conscious decision to maintain as low a public profile as possible, one of their children has instead elected to pursue life in the spotlight.

Their daughter Georgia is an up-and-coming model but, typically for a Geminder, has chosen not to use her last name to avoid getting attention as a result of it. Georgia instead works under the name Georgia G and her biggest break so far has been being named a 2014 Formula One Rolex Australian Grand Prix Ambassador.

Georgia was reportedly spotted at an American Australian Association benefit dinner in 2010 where the Pratt family was being honoured and she is on the books of Chadwick Models.

As well as Georgia, Fiona and Raphael have three other children together – Ben, Annabel and Samantha. Fiona and South Africa-born Raphael met when he was a partner with New York real estate financiers Ekstein Rothenberg.

Raphael has previously described Fiona as the greatest mentor he has had in his life. He told The Australian in 2013: “She has kept me very balanced and very focused on the important things in life. And what are those? Your family.

“I think family is everything. It is why you are on earth. It is central to everything I do. We are as committed to our family as I’d like to think most people are. We all have a duty and a commitment to be good family people.”

Perhaps this helps to explain why the Geminders keep themselves to themselves and do not try to cultivate any sort of public profile apart from what they need to run their business.

Family always comes first for Fiona Geminder.

Henry Sapiecha


IS INDIA THE SLAVE CAPITAL OF THE WORLD WITH 30MILLION SLAVES..????Modern slavery takes many forms, including sex trafficking. A prostitute stands on a street corner image

No choice: Modern slavery takes many forms, including sex trafficking. A prostitute stands on a street corner. Photo: Peter Morris

London: Almost 36 million people are living as slaves across the globe, with an index on Monday listing Mauritania, Uzbekistan, Haiti, Qatar and India as the nations where modern-day slavery is most prevalent.

The Walk Free Foundation, an Australian-based human rights group, estimated in its inaugural slavery index last year that 29.8 million people were born into servitude, trafficked for sex work, trapped in debt bondage or exploited for forced labour. This year’s figure represents about 0.5 per cent of the world’s estimated population of 7 billion people.

Releasing its second annual index, Walk Free increased its estimate of the number of slaves to 35.8 million, saying this was due to better data collection and slavery being uncovered in areas where it had not been found previously.

For the second year, the index of 167 countries found India had by far the greatest number of slaves. Up to 14.3 million people in its population of 1.25 billion were victims of slavery, ranging from prostitution to bonded labour.

Mauritania was again the country where slavery was most prevalent by head of population while Qatar, host of the 2022 World Cup, rose up the rank from 96th place to be listed as the fourth-worst country by percentage of the population.

“From children denied an education by being forced to work or marry early, to men unable to leave their work because of crushing debts they owe to recruitment agents, to women and girls exploited as unpaid, abused domestic workers, modern slavery has many faces,” the report said.

“It still exists today, in every country – modern slavery affects us all.”

The index defines slavery as the control or possession of people in such a way as to deprive them of their freedom with the intention of exploiting them for profit or sex, usually through violence, coercion or deception.

The definition includes indentured servitude, forced marriage and the abduction of children to serve in wars.

Hereditary slavery is deeply entrenched in the West African country of Mauritania, where 4 per cent of the population of 3.9 million is estimated to be enslaved, the report said.

After Mauritania, slavery was most prevalent in Uzbekistan, where citizens are forced to pick cotton every year to meet state-imposed cotton quotas, and Haiti, where the practice of sending poor children to stay with richer acquaintances or relatives routinely leads to abuse and forced labour, it said.

Qatar was ranked fourth.

The tiny Gulf state relies heavily on migrants to build its mega-projects including soccer stadiums for the 2022 World Cup. It has come under scrutiny by rights groups over its treatment of migrant workers, most from Asia, who come to toil on construction sites, oil projects or work as domestic help.

The next highest prevalence rates were found in India, Pakistan, Democratic Republic of Congo, Sudan, Syria and Central African Republic.

The index showed that 10 countries alone account for 71 per cent of the world’s slaves.

After India, China has the most with 3.2 million, then Pakistan (2.1 million), Uzbekistan (1.2 million), Russia (1.05 million), Nigeria (834,200), Democratic Republic of Congo (762,900), Indonesia (714,100), Bangladesh (680,900) and Thailand (475,300).

For the first time, the index rated governments on their response to slavery. It found the Netherlands, followed by Sweden, the United States, Australia, Switzerland, Ireland, Norway, Britain, Georgia and Austria had the strongest response.

At the opposite end of the scale, North Korea, Iran, Syria, Eritrea, Central African Republic, Libya, Equatorial Guinea, Uzbekistan, Republic of Congo and Iraq had the worst responses.

Every country in the world apart from North Korea has laws that criminalise some form of slavery, yet most governments could do more to assist victims and root out slavery from supply chains, Walk Free Foundation’s head of global research said.

“What the results show is that a lot is being done on paper but it’s not necessarily translating into results,” Fiona David told the Thomson Reuters Foundation by telephone from Canberra.

“Most countries got 50 per cent or less when we looked at the strength of their victim assistance regime. It’s also striking that … out of 167 countries we could only find three [Australia, Brazil and the United States] where governments have put things in place on supply chains.”

The report showed that conflict had a direct impact on the prevalence of slavery, Ms David said, citing the example of the Islamic State militant group which has abducted women and girls in Iraq and Syria for use as sex slaves.

“What our numbers show is the correlation really is quite strong so as an international community, we need to make planning for this kind of problem part of the humanitarian response to crisis situations,” Ms David said.


Henry Sapiecha

Former Chinese premier Zhu Rongji is the first senior politician to be listed among the country’s top philanthropists, a survey shows.

Zhu Rongji, respected as an economic reformer, donated nearly $4 million from book royalties image

According to wealth publisher Hurun’s Philanthropy List 2014, Mr Zhu last year donated 23.98 million yuan ($US4 million) in book royalties to low-income schools and students.

He ranked 60th on the 103-name list, after technology billionaires, property tycoons and investment gurus.

Mr Zhu, Chinese premier from 1998 to 2003, was known for his tough style with other officials but credited with pushing deep economic reforms.

China’s top 5 philanthropists

Name Donations $USm Company
Jack Ma 2,400 Alibaba
Huang Rulun 97 Century Golden Resources
Wang Jianlin & Wang Sicong 73 Wanda
He Xiangjian 68 Midea
Tang Lixin 52 Shinesun

Source: Hurun Research

The books that contributed to his donation were collections of transcripts of his speeches since the late 1980s, when he was mayor of Shanghai.


Chairman and chief researcher of the Hurun report, Rupert Hoogewerf, said Mr Zhu’s contribution marks the first time a book royalty donation has made the list.

The former premier is among 71 new philanthropists this year – the highest since records began in 2004.

Mr Hoogewerf said the new names suggested charitable giving by the wealthy was still in its “early stages” in China.

“It shows that charitable donations are still in the early stages, but the fact we are seeing so many new faces shows me that the industry is developing and maturing,” he told the ABC.

“Also, it is worth bearing in mind that many donations are made on a one-off basis and thereafter, it is the foundation that makes the annual donations.”

China’s richest man and founder of e-commerce giant Alibaba, Jack Ma, ranked as China’s most generous person, after he donated a 1.4 percent stake in his firm – worth about $2.4 billion – to set up an environment, healthcare and education charity.

Mr Ma’s personal wealth ballooned to $19.5 billion after Alibaba’s record-breaking initial public offering on the New York Stock Exchange in September, according to Forbes magazine.

To compile the list, the Hurun Research Institute surveyed 3,000 of China’s most successful entrepreneurs and cross referenced with media reports and charitable foundations.


Henry Sapiecha


Rotariu uses the first bitcoin ATM in downtown Bucharest

The interest in bitcoin in Romania stands out in a region where national currencies are widely seen as poor substitutes for the euro.

Tech-savvy and still deeply distrustful of officialdom 25 years after the end of communism, many Romanians are unfazed by warnings about the cryptocurrency.

In the western town of Oradea, 370 miles (595 km) away from the capital, the first bitcoin exchange in the country has drawn more than 2,000 clients in the seven months since it opened, with transactions totaling 5.12 million lei ($1.57 million).

But Romania ranks as the European Union’s second-poorest state and among the weakest in collecting taxes and fighting fraud, making it poorly equipped to manage the bitcoin.

Bitcoin is still an infant in Europe relative to the United States, where hundreds of start-ups backed by some Wall Street traders and venture capitalists have propelled consumer and media interest. Activity in virtual currencies around Europe is concentrated in London, Amsterdam and Berlin.

Romanian entrepreneurs envision a future where the bitcoin is as common as grocery shopping. But they say it needs a legal framework to gain credibility.

“It is an industry in its early stages,” said George Rotariu, who opened the ATM in Bucharest in collaboration with Vancouver-based Bitcoiniacs and plans to expand to more Romanian cities. “You need a legislative framework to supply services or have a business in this field,” he said.

“We groped around in the legislation and interpreted some policies,” said Horea Vuscan, a local politician who owns the Oradea bitcoin operator BTCXchange.

“We are now in talks with officials because I don’t know where we fit in, a bourse, bank, money transfer firm.”

Bitcoin is stored entirely on computers, not backed by any government or central bank. It lets owners hold, trade and move money from place to place almost as cheaply as sending email.


Its use has raised concerns for governments around the world, especially after Tokyo-based Mt Gox, once the world’s leading bitcoin exchange, filed for bankruptcy after saying some 850,000 bitcoins had gone missing.

A report by Bank of America last year found bitcoin showed promise as a low-cost way to do e-commerce and as an alternative to traditional money transfer services, but could also be used to evade high taxes, capital controls and confiscation.

In July, the European Banking Authority, the EU’s banking watchdog, urged national policymakers to discourage credit and payment institutions from buying, holding, or selling virtual currencies pending a regulatory framework.

“Using bitcoin in Romania is not regulated and carries very large risks,” said the Romanian Financial Supervision Authority (ASF). “The risk of fraud is also not to be ruled out.”

It said the industry “would need to have a visible economic significance in Romania, which it does not”, before regulation is considered, adding it would enforce any EU-approved rules.

Some EU states, including Finland, the United Kingdom, Germany or Poland have found ways to tax bitcoin transactions.

But Romania collects just under 60 percent of its regular tax goal. That amounts to roughly 33 percent of economic output, well below the bloc’s 46 percent average.

“There is some preoccupation with bitcoin,” one finance ministry official said. “But a legal framework is some time away and only after that will we analyze the need for a fiscal one.”



The number of Romanian service providers accepting bitcoins – which are divisible to eight decimal places – has risen slowly to a handful of coffeeshops, gyms, restaurants and beauty salons, according to service tracker

“I want to bring bitcoin to street level, I want everyone to have a phone app where they keep their coins and use it everywhere, in coffee shops, restaurants, grocery shops, just like a regular wallet,” BTCXchange owner Vuscan said.

But before it can gain greater traction, bitcoin needs to address its volatility; it has swung from 1,170 lei ($370) to 3,406 lei ($1,100) this year, according to Oradea’s BTCXchange.

Vuscan’s exchange works only for Romanian leu deals, but he plans to open it to euro and dollar transactions, hoping to join larger European bitcoin exchanges such as Slovenia’s Bitstamp.

BTCXchange is registered as a standard company. Vuscan enforced some safeguards – users are required to have a bank account and there are self-imposed policies against money laundering. But there are no legal or regulatory safeguards.

Bitcoin’s rise in Romania is partially due to its status as one of Europe’s active technology hubs. The country has attracted investors including Oracle, IBM and Intel.

But while Romania boasts pockets of super-fast internet networks, only 58 percent of households have internet access, below the EU average. A 2012 Verizon report also said Romania was the world’s second-biggest hacking center after China.

Vuscan says his exchange is safe and he will reimburse clients if their bitcoins get stolen. “I can hardly wait for them to try,” he said when asked about hacker attacks.

($1 = 3.2626 Romanian lei)

Henry Sapiecha

For years, wealthy Chinese have been transferring billions worth of their money overseas, snapping up pricey real estate in markets including Australia, the US and Canada despite their country’s currency restrictions.

china flag flying in front of bank building image www.acbocallcentre (2)

Now, one way they could be doing it is clearer. Last week, when China Central Television leveled money-laundering allegations against Bank of China, the state-run broadcaster’s report prompted the revelation of a previously unannounced government program that enables individuals to transfer their yuan and convert it into dollars or other currencies overseas.

Offered by some banks in the southern province of Guangdong, across the border from Hong Kong, the trial program was introduced in 2011 for overseas property purchases and emigration and doesn’t constitute money laundering, Bank of China said in a July 9 statement. The transfers were allowed by regulators and reported to them, the bank said.

“What it shows is the government has been trying to internationalise the renminbi for a lot longer than we thought,” Jim Antos, a Hong Kong-based analyst at Mizuho Securities said, using the official name for China’s currency and referring to policy makers’ long-stated goal of allowing the yuan to become freely convertible with other currencies. “I’m rather encouraged by this news because this is the way they need to go.”

Currency Controls

China’s foreign-exchange rules cap the maximum amount of yuan that individuals are allowed to convert at $50,000 ($53,400) each year and ban them from transferring the currency abroad directly. Policy makers have taken steps in recent years, including allowing freer movements of capital in and out of China, as they seek to boost the global stature of the not-yet-fully convertible yuan.

“There’s a silver lining in this incident as it may force the regulators to address the issue in a more open and transparent way,” said Zhou Hao, a Shanghai-based economist at ANZ. “This is an irreversible trend.”

The issue came to light after CCTV said Bank of China helped customers transfer unlimited amounts of yuan abroad through a product called Youhuitong, which means “superior foreign-exchange channel.”

Positives, Negatives

The program is another sign that China is testing methods to allow outward yuan flows before full convertibility, May Yan, a Hong Kong-based analyst at Barclays Plc, said by phone. The goal has been announced by policy makers since the 1990s, and is a step toward stated plans to make Shanghai a global financial capital by 2020.

“For an experiment, you want to see if there’s any positives or negatives,” Yan said. “When the bank or the regulators can accumulate that experience, then they will decide if they want to move forward, or broaden it or shut it down.”

The central bank in February unveiled rules to make it easier for companies with operations in Shanghai’s free-trade zone to move yuan in and out of the country, a further loosening of controls on currency flows. The yuan surpassed the euro as the world’s second most-popular currency in trade finance in 2013, according to the Society for Worldwide Interbank Financial Telecommunication.

The Guangdong branch of China’s currency regulator, the State Administration of Foreign Exchange, picked Bank of China, China Citic Bank and a foreign lender to let individuals transfer yuan abroad in a trial the banks were told not to promote, Time Weekly reported in April 2013. A Beijing-based Citic Bank press officer declined to comment on the program.

$3.4 Billion Estimate

While Bank of China didn’t provide figures, the 21st Century Business Herald estimated the lender has moved about 20 billion yuan ($3.4 billion) abroad through Youhuitong, citing people with knowledge of the trial program. “Many commercial banks” in Guangdong offer a similar service, Bank of China said in its statement, without naming them.

Today, a link on CCTV’s website for the report on Bank of China led only to advertisements. A spokeswoman for CCTV’s international relations department, which handles foreign media inquiries, didn’t immediately respond to an e-mailed request for comment on why the story appeared to no longer be available.

The People’s Bank of China and SAFE didn’t reply to requests for comment. The central bank is “verifying” facts related to media reports of bank money-laundering, the official Xinhua News Agency reported July 10, citing a PBOC spokesman.

Youhuitong Suspended

Youhuitong has been suspended while the PBOC and its anti-money laundering bureau request records of all previous transactions, according to a person familiar with the product, who asked not to be identified because he wasn’t authorised to speak publicly.

Transfer approval for Youhuitong customers usually takes several weeks to a month, the person said. They need to provide documents showing how the money to be transferred was obtained, such as tax-payment receipts and proof of income, as well as a property-purchase agreement or proof of emigration, he said.

Youhuitong customers would typically deposit yuan with Bank of China at least two weeks before the transfer, the person said. Once approved, the customer and the bank agree on an exchange rate before the funds are moved to an overseas account designated by the customer, he said. Money destined for real estate would go directly to the property seller’s account to ensure the cash won’t be misused, he said.

A Beijing-based press officer for Bank of China declined to comment. Industrial & Commercial Bank of China  and China Construction Bank, the nation’s two largest banks, declined to comment on whether they offer similar products.

Another Way

HSBC, which runs the largest branch network among foreign banks in China, offers its Chinese clients another way to access offshore mortgages while avoiding the cap on foreign-exchange conversion, according to a person familiar with the mechanism, who asked not to be identified without having authorisation to speak publicly.

Customers deposit yuan with HSBC’s mainland unit or purchase its wealth-management products, and the bank’s overseas branch then issues a foreign-currency denominated mortgage using the China deposits as collateral, the person said.

“We seek to abide by the rules and laws of the jurisdictions and geographies in which we operate,” said Gareth Hewett, a Hong Kong-based HSBC spokesman.

Affluent Chinese have been moving money overseas in search of greater investment returns. China’s benchmark stock index has tumbled 66 per cent from its 2007 record, while the government has clamped down on property lending to rein in rising prices.

Spending up in Australia

Chinese buyers, including people from Hong Kong and Taiwan, spent $US22 billion on homes in the States in the year through March, up 72 per cent from the same period in 2013 and more than any other nationality, the National Association of Realtors said in its annual report on foreign home purchases.

“Clearly the property market wouldn’t nearly be so robust as it is today without mainland money,” Mizuho’s Antos said. “How did they do it? With Bank of China’s help. There has been a tremendous amount of mainland money flowing offshore and it couldn’t have happened without” official approval.

And Chinese have become the biggest investors in Australia’s commercial and residential property, with purchases surging 42 per cent to $5.9 billion in the year to June 2013, according to the Foreign Investment Review Board.

Vancouver’s real estate market has also seen the impact, having been “fueled tremendously in the last couple of years by high-end wealthy Chinese and Hong Kong buyers,” according to real estate agent Malcolm Hasman.

China needed to improve its oversight of capital flows after $US2.7 trillion in unexplained funds moved overseas in the decade prior to 2012, Anthony Neoh, a former government adviser who helped the country open up to foreign money managers, said last year, citing data from Integrity International. Those funds fueled property bubbles in cities such as Hong Kong instead of being invested in domestic assets, he said.

“We know the demand to move abroad is there,” said ANZ’s Zhou. “Even if you impose various restrictions, the money will find its way out of the country, via underground banks and other means.”


Henry Sapiecha

BIT COINS IN BULK IMAGE www.profitcentre.netsingapore

Summary: The island will get its first Bitcoin ATM in March, but does it really need another currency which main appeal is the anonymity it offers, especially since Singapore is reportedly susceptible to money laundering?

eileenyu singapore bitcoin image

It’s cool, it’s hip, and it’s virtual. Bitcoin has garnered much attention the world over, including here in Singapore where news broke this week that the island will be getting its first Bitcoin ATM. The question, however, is whether the country needs another currency, especially one that carries with it inherent risks.

Singapore-based trading platform, Bitcoin Exchange, purchased a Lamassu system and is scouting for a location to place the ATM, which will begin operation in March. The company plans to acquire more units if demand grows, according to Bitcoin Exchange’s director Zann Kwan.

She told local newspaper MyPaper that Bitcoin buyers in Singapore currently need to wait at least a day after transfering money, including service fees, to an overseas exchange before they receive their Bitcoins. “This is not cheap and defeats the concept of bitcoin… A Bitcoin vending machine makes it very easy and safe to buy Bitcoin, and avoids such additional costs and other risks,” Kwan said, pointing to the possibility sellers might default on the transaction.

She told the company had yet to decide from which exchange it would base its rates. “There are a few bars that are accepting Bitcoins now and people are talking about it, but you need a few people to start the ball rolling, then the momentum will pick up,” she added.

According to Lamassu, an ATM unit is priced from US$5,000 and can issue Bitcoins in 15 seconds. Another Bitcoin ATM manufacturer, Robocoin Technologies, last month said it was negotiating plans to bring its kiosks to Hong Kong.

While countries such as China and Thailand–and possibly India and Indonesia–have outlawed the use of the currency, Singapore has chosen a different route by choosing not to regulate it, but warning businesses and individuals they will trade with Bitcoin at their own risk. The country’s Inland Revenue Authority last month outlined tax requirements for transactions involving the digital currency.

That my government has somewhat embraced Bitcoin isn’t surprising, since it traditionally has been deemed to be business-friendly. In its annual report released last October, the World Bank again ranked Singapore the world’s easiest place in which to do business, offering the most business-friendly regulatory environment for local entrepreneurs.

Inherent risks may damage Singapore financial reputation

This friendliness, however, has brought with it global critics who say the nation has become a tax haven and hub for money laundering activities.

Add Bitcoin to the equation, and such risks may exacerbate. The currency’s biggest appeal is the anonymity it affords its users, and it is this trait that has led to the associated risks, including money laundering and funding of illegal activities.

In a risk assessment study released last month, the Singapore government said the country was

potentially susceptible to money laundering and terrorist financing, adding that some sectors needed stronger oversight to mitigate such risks. The report assessed 14 financial and 8 non-financial sectors in the country including banks, money changers, casinos, and money lenders. It noted that internationally-oriented and cash-intensive sectors, in particular, were at risk. “Full banks face higher inherent risks, owing to their large customer volumes and the international nature and the international nature of their transactions,” it said.

Bitcoin also is international by nature, as is its transactions. Furthermore, its appeal to buyers and sellers who seek anonymity has led to illegal activities and the sale of contraband goods, some of which eventually shut down sites such as Silk Road and Sheep Marketplace.

It is such risks that have led China and India to warn against the use of the digital currency. Nonetheless, this hasn’t stopped retailers and consumers from lapping up the currency of the month.

Bitcoin1-in hand image

A “cool” novelty for merchants, but not compelling payment option

Some merchants in Singapore have started accepting Bitcoins, including Bartini Kitchen, Squash Passion, Artistry, and Hospoda Microbrewery. I asked fellow ZDNet blogger and restaurant owner in Singapore, Howard Lo, if he planned to follow suit. Here’s his reply:

“Bitcoin is cool and I think there’s a certain PR value for accepting Bitcoins. The geeky folks, of which there are many in Singapore, would probably come check you out just to see what it’s like to do a transaction using Bitcoins.

But is it worth training the staff and implementing the infrastructure to support Bitcoins? To be honest, I don’t know what is needed to actually accept Bitcoins. I imagine it’s just an electronic transfer into the Bitcoin account. But I’d want to figure out if it is worth the tradeoff in time to support just 1 or 2 people per week who might actually pay by Bitcoin.

The fluctuation in the value of Bitcoins is worrying. There’s the possibility of making a lot just from that fluctuation, but what if the value drops dramatically? Alternatively, do I convert the Bitcoin into Singapore dollars at the end of each night? That could be a hassle.

And how do I display my prices in Bitcoin? Let’s say a S$15 lunch set…do I change the Bitcoin price every day since the currency fluctuates so much?

I’m not concerned about someone hacking my Bitcoin account, but I will need to look into what kind of Bitcoin fraud happens. Whether it’s a customer perpetrating a fraud on me or someone pretending to be my restaurant and somehow getting money from someone else.”

Indeed, money laundering risks aside, there remains many questions about the viability of Bitcoin. Why would it appeal to Singapore consumers who already are used to cash, electronic payment NETS, credit and debit cards as payment options?

Sure, Bitcoin is universal and currency-agnostic, but purchasing in a foreign currency isn’t an issue for Singaporeans who are very familiar with e-commerce. The one attraction in this case would be the ability to transact in a currency that’s stable so online shoppers will know how much they’re spending and won’t lose out in the local-foreign exchange. But with its highly fluctuating and volatile state, Bitcoin currently is unable to offer this.

And for the merchants, as Howard pointed out, there currently are few reasons for him to want to offer it as a payment option.

In the Sheep Marketplace incident, Reddit user “kyerussell” rebuked anyone for thinking they could get their money back. “It seems that this subreddit is full of people that don’t understand the fundamentals of bitcoin and somehow think that this’ll result in people getting their money back. It won’t. That’s the point of bitcoin… You aren’t going to get anything back. None of you are going to get anything back, and it’s by design. This is EXACTLY how Bitcoin is supposed to work. Bitcoin would be fundamentally broken if you somehow got your money back.”

And unlike theft of real cash, it remains to be tested if there will be legal recourse for the loss of the digital currency. As a ZDNet reader pointed out: “Really, I would say it is exactly like black market cash.”

With all the associated potential risks, and many unanswered questions, there is little reason to choose to transact in Bitcoin over traditional payment options. If its value stabilizes, and governments start recognizing it as a legal currency with a proper framework for consumers to seek recourse, perhaps then. But, just not right now.

cash_register image

Henry Sapiecha


roman-abramovich (1)

Russian businessman Roman Abramovich is one of the country’s richest men and the owner of the Chelsea Football Club. Source: AP

A REPORT by a major investment bank says 35 per cent of household wealth in Russia is owned by just 110 people, the highest level of inequality in the world barring small Caribbean nations.

Credit Suisse said in a report published that worldwide, billionaires account for just 1-2 per cent of total wealth. The investment bank said that Russia has one billionaire for every $US11 billion ($11.6 billion) in wealth while in the rest of the world there is only one for $US170 billion.

The fall of Communism saw Russia’s most prized assets sold off to a small circle of businessmen later known as oligarchs. President Vladimir Putin allowed them to keep their wealth in exchange for their political loyalty.

Metals and banking tycoons Vladimir Potanin and Mikhail Fridman, who made their fortunes in the 90s, are still high on the list of Russia’s richest men. But the past decade saw a rise of new billionaires who draw their wealth from state contracts and some of whom are known to be the presidents’ friends, like Gennady Timchenko.

Credit Suisse said that there were hopes with the demise of the Soviet Union that Russia would turn into a high skilled economy with fair wealth distribution but “this is almost a parody of what happened in practice”.

The 35 per cent of wealth that Russian billionaires own is equivalent to $US420 billion.

“Russia has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident billionaires,” the bank said in the report


Henry Sapiecha

gold dollar sign line

Next Page »