What is Bitcoin? It is a virtual cryptocurrency, which means that it has no substance and is not underwritten by anyone or any asset other than its creator's reputation. It has an imaginary or perceived value.
Bitcoin and other crypto currencies have their supporters, particularly amongst the online gaming and gambling community. They claim they meet the needs of the Internet instant economy. That it is a modern state of the art technological solution and that avoids the slow, expensive and regulated banking system.
Critics of the software argue it is unregulated, exposed to abuse, and being encrypted is secret between two parties. They claim it is yet another dot.com bubble waiting to burst.
In December 2017, Andrew Bailey, head of the UK's Financial Conduct Authority, echoing Chris Woolard, his Director of Strategy & Competition's warning in June 2017, announced that investing in bitcoin was akin to gambling as they are not regulated, not within the remit of central authorities or have the consumer protection of traditional assets and, are therefore, not a safe investment.
In an interview with the BBC's Newsnight programme he said, "It is a very volatile commodity in terms of its pricing. If you want to invest in bitcoin be prepared to lose your money, that would be my serious warning." However, in response to CBOE's recent launch he added, "If you buy a future or if you buy an option then we do come into the picture." The latest cautions follow the FCA's formal warning in September 2017 about Initial Coin Offerings, when it stated they were "very high-risk, speculative investments."
Jamie Dimon, CEO of JPMorgan Chase has labelled bitcoin a fraud that would eventually blow up and Warren Buffet has urged traders to "stay away from it," calling it a "mirage."
All bubbles burst.
If any investment rises 1000% in a year and suffers extreme volatility, questions must be asked.
Some argue that the recent listing of Future Bitcoin on the NASDAQ is proof positive that it is a highly risky "investment."
This is precisely what Bitcoin is – a highly risky investment. It is not a currency... backed by reliable data, economic factors, political and social policies, a track record, assets, governments and, crucially, a financial protection or insurance scheme. It is driven entirely by price. As such its temporality and very existence relies on perception and trust.
Other critics voice much stronger concerns. They claim its massive growth in price is as a result of criminality in the form of its appeal for money laundering and tax evasion.
One commentator described Bitcoin and other crypto currencies as the modern version of container fraud perfected by 80's & 90's criminals such as John Palmer, to circumvent official bank accounts that included Coutts, by simply transferring the ownership of particular containers of loot to another owner.
In response in early December the UK Government has announced plan to strengthen regulation and force traders in crypto currency to disclose their identities and report any suspicious activity
In a competent and experienced jurisdiction investors could take some comfort.
However, Calvin Ayre, the creator of Bodog has chosen his new flight home of Antigua & Barbuda as the new hub of his Bitcoin empire.
Calvin Ayre fled the USA amid charges. Antigua welcomed him and sheltered him as they have done for several fugitives from international justice over the years. Indeed, their own financial regulator Leroy King has been protected from prosecution for his complicity in the arguably largest fraud in world banking history by R Allen Stanford, a former benefactor to A&B Government and stripped Knight of the Realm.
On July 14th 2017 Chief Judge Catherine Blake of the United States District Court for the District of Maryland accepted a resolution that dismissed all of the felony charges against Calvin Ayre and Bodog. The GOAB, which is involved in a long-standing bitter WTO online gambling dispute with the USA, responded by appointing him as an economic envoy to represent its so-called digital revolution.
However, it is the creation of a crypto hub in Antigua that should worry the market and regulators alike.
Antigua and Barbuda has an unenviable reputation for lack of transparency and non-cooperation with law enforcement agencies.
It remains one of only two entire countries that have ever been the subject of Treasury Advisories by the US & UK authorities.
Following the example of other failed governments, such as Cuba, Venezuela and Zimbabwe, Antigua has expropriated the Half Moon Bay resort, once the private property of American investors, breaching its constitutional obligation to pay the owners for what it euphemistically calls a "compulsory acquisition". Individuals following this saga will recognise that it has gone on for more than 15 years, and that the dispossessed owners have now taken the enforcement of the Privy Council's Judgment, establishing the award of compensation due, beyond the boundaries of Antigua's jurisdiction.
The GOAB is also currently mired in a further land controversy over its treatment of inhabitants of Barbuda, "the sister island" of the twin state of Antigua and Barbuda, after its destruction by Hurricane Irma in September 2017, which left the island uninhabited for the first time in 300 years.
Recently Jon Snow, the eminent UK news broadcaster, highlighted the Barbudan nation's plight when he suggested that students petitioning to change the name of their halls of residence would be better placed getting behind a proper cause, such as helping Barbudans recover their rights.
Antigua has a track record of harassing journalists and the current Administration has created an environment where press freedom is a thing of the past. A particular vicious and cowardly assault has been perpetrated against Ian "Magic" Hughes, a local journalist, who had the courage to speak out against state wrongdoings and now faces the prospect of a long sentence in an abominable Antiguan jail.
The tiny island nation has frequently been linked to money laundering, illegal arms shipments, loss of correspondent banking facilities and a long term string of financial institutional failures that culminated in the Stanford debacle.
It is the also the home to a highly controversial so-called Citizen by Investment Programme that involves the issue of passports in exchange for investment monies.
CIP beneficiaries include Alexandre Cazes, a 26-year-old Canadian, who was an administrator / suspected co-founder of AlphaBay, one of the world's largest dark web marketplaces that mysteriously went offline was found dead in a Thai jail.
Peter Singh Virdee, a British businessman known as "Batman" is facing extradition to Germany and a possible 15-year prison sentence for alleged £109 million VAT carousel fraud. Virdee, also a recipient of an Antiguan passport, is behind in the 1,000-acre Gravenor Virdee project in Barbuda and solar power plants in Antigua.
More than two years on from the much-heralded launch of the controversial $2 billion Yida development known the Guiana Island project, has seen the enigmatic disappearance of its owner and CIP proponent Chinese billionaire Xiao Jianhua.
The CIP has long generated concern and it well worth noting that the Canadian Government now requires visa applications for all entering Canada on an Antiguan passport ... something that was not the case until the summer of 2017.
All in all Antigua and Bitcoin are a perfect match. It is a fitting resting place when the bubble bursts.
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