Bitcoin prices fell below $400 on major exchanges Thursday after it was confirmed two major Chinese exchanges were ordered to stop bank transfers from customers. The Chinese government issued a statement last month, requiring banks to close accounts of bitcoin exchanges by April 15. While the deposit halt had been expected, this didn't stop the slide that put the sell price at $390 as of late Thursday.
Bitcoin bulls still remain, however. Although he has taken a 20% hit in his investment, Legg Mason's Bill Miller still believes the potential rewards of bitcoin outweigh the risks.
Florida has become the first state to bring criminal money laundering charges in a case involving the virtual currency bitcoin.
The price of bitcoin dropped under the $500 mark since the IRS's notice on its policy of deeming bitcoin as property, not currency. Users of bitcoin will now have to keep a strict record of purchases made with bitcoin, then perform calculations to account for the change in value to extract taxes from any gains. This has made the usage of bitcoin more complicated for average users. Rumors of China's intent to make bitcoin illegal may also be a contributing factor for the price drop.
The Internal Revenue Service announced that bitcoin and other virtual currencies will be treated like property, not currency. The IRS will treat bitcoin like stock, and gains from investment will be treated as capital gains for taxation purposes.
Mt. Gox, the collapsed bitcoin exchange, says it has discovered 200,000 bitcoins valued at around $114 million. "We believed there were no bitcoins left in old wallets, but found 199,999.99 bitcoins on March 7," said former Mt. Gox chief executive, Mark Karpeles. Mt. Gox said it reported the discovery of the coins to the bankruptcy court on March 10.
Boomberg News reports Pantera Capital Management LP has invested about $10 million in Bitstamp Ltd., a bitcoin exchange.
"I did not create, invent or otherwise work on Bitcoin. I unconditionally deny the Newsweek report."
A class action lawsuit is filed in Canada and the U.S. targeting Mt. Gox and Mizuho Bank in Japan regarding the loss of bitcoins. The allegations include negligence, breach of contract and fraudulent misrepresentation.
New York state financial regulator Benjamin Lawsky said he would consider accepting applications to operate exchanges for bitcoin and other digital currencies to help speed the development of rules for that market. "The recent problems at Mt. Gox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges, including robust standards for consumer protection, cyber security and anti-money laundering compliance," Lawsky said in a statement.
Blog and Twitter accounts of Mt. Gox CEO Mark Karpeles are hacked and defaced. Hackers claim Mt. Gox still has customers' bitcoins and upload a data dump of user accounts to the site. An investigator from Kaspersky Lab, a cybersecurity firm, later discovered the archive file leaked also contained bitcoin-stealing malware.
Mt. Gox files for bankruptcy in Dallas to protect its U.S.-based assets.
Newsweek stands by their story, while Reddit starts a fundraising campaign for Dorian Satoshi Nakamoto. "If this person is Satoshi, then the funds are a small 'thanks' and won't make much of a difference… However, if this person is not Satoshi, then these funds will serve as a 'sorry for what happened to you,' help with medical bills his family is facing, any legal bills they may incur, or anything else," wrote Andreas M. Antonopoulos, a member of the bitcoin subreddit.
Newsweek claims to have found the man behind bitcoin. Journalist Leah McGrath Goodman identified Dorian Satoshi Nakamoto, a Japanese-American man living with his mother in Temple City, California, as the creator of bitcoin. Nakamoto denies his involvement.
Mt. Gox files for bankruptcy protection in Tokyo.
Mt. Gox’s website goes dark.
Mt. Gox halts customer withdrawals.
- Satoshi Nakamoto