Bitcoin in the Headlines: Kingpins and Dark Markets

Yessi Bello Perez
Aug 28, 2015 at 20:01 UTC
Updated Aug 31, 2015 at 10:48 UTC
feature

Despite a few high-profile stories, the bitcoin and blockchain industry ended the calendar summer on a down note, with media outlets mostly rehashing well-worn stories.

Still, the notoriety of the publications providing coverage was of note, with The New Yorker and Rolling Stone adding to the conversation and exposing new audiences to topics such as the ongoing bitcoin fork debate and the fall of Mt Gox.

Elsewhere, perceived issues with the technology were given ample airtime, with the dark web and controversial international markets garnering the remainder of the spotlight.

A bitcoin kingpin 

bitcoin

Disgraced bitcoin exchange Mt Gox was the subject of an exposé for Rolling Stone in its latest edition, perhaps a testament to the enduring notoriety of bitcoin in the US counterculture.

The article marks the second time the US magazine has profiled a story relating to the bitcoin industry, following a February feature on Silk Road.

In the latest piece, David Kushner tackled the topic with typical Rolling Stone flair, labelling Mt Gox CEO Mark Karpeles a “bullied geek” who “forged an empire out of digital currency, and became a suspect in a half-billion-dollar heist”.

Kushner further described Karpeles as “the accidental emperor of bitcoin”. He continued:

“A hapless geek who, as much to his own surprise as others’, became the most powerful lord of digital cash. During his reign, bitcoin, the leading form of virtual currency, rose in value from approximately a quarter to more than $1,200.”

Noting the early success of the bitcoin exchange, the author cites various sources, including Tyler Winklevoss – famed for filing a lawsuit against Facebook’s Mark Zuckerberg with his twin brother Cameron Winklevoss – who said Mt Gox was “the most powerful and prominent property in bitcoin”.

After rendering a detailed history of both bitcoin and the Mt Gox case, Kushner added:

“Throughout my time with Karpeles in Tokyo, he maintained his innocence with such calm that I was left with two possible conclusions. He’s either the greatest criminal mastermind of the digital age or an overeager chump who got in way over his head, and, perhaps, resorted to the most desperate means to get out.”

While adding new details to the narrative, parts of the story may suffer from dating, as the article focused on the author’s meeting with the Karpeles three months before his recent arrest.

For example, the article ended with a surprisingly optimistic note by emphasizing how Karpeles believes he’ll have the chance to put his interests in business to use in the market again.

“Whether he’s found guilty or innocent, he’s not done dreaming yet. He hopes to take the lessons he’s learned at Mt Gox and create a more secure form of digital cash,” the author wrote.

Dark market shutters

closed

Following the mainstream media’s apparent appreciation for bitcoin-related illicit activity, some journalists this week also picked up on the “temporary” closure of dark web marketplace Agora.

The dark market website, thought to be the most popular in terms of daily transaction volume, uses bitcoin to facilitate the purchase of both legal and illegal goods.

One of the first and most widely cited pieces was by Wired‘s Andy Greenberg, who began his article by alluding to Agora’s predecessor, Silk Road, writing:

“The Dark Web’s biggest marketplace for drugs seems to have learned a lesson from the downfall of the Silk Road: When cracks start to appear in your anonymity’s armour, it’s time to quit while you’re ahead – or, at least, retreat and regroup.”

Still, unlike Silk Road articles, it seems the allure of the connection between bitcoin and crime is beginning to fade.

Stories by Business Insider and International Business Times, for example, mentioned bitcoin only in passing, scarcely stopping to provide a definition of the technology or its role in payments.

Bitcoin trading gets rial

Iranian flag

New bitcoin exchanges don’t tend to get much fanfare these days in the mainstream media, however, the launch of BTXCapital, a trading platform targeting the Iranian market, bucked this trend.

Launched on 24th August, the exchange is not the first business to open its doors in the controversial Middle Eastern state, but it was uncharacteristically public about the announcement given the past reticence of local community members to communicate with the global community.

The exchange’s application services firm, Draglet, suggested to International Business Times that BTXCapital’s efforts in the region could be shortlived.

“From a Western perspective, it’s cool to have bitcoin spreading this way,” company CEO Ganesh Jung told the news source. “There are no legal concerns from our side, but the Iranian government could block this kind of service.”

Despite the caution, even from firms affiliated with the venture, IBTimes was, as usual, bombastic with its headline, emphasizing quotes about the “huge untapped market” that the exchange could perhaps unlock for bitcoin.

Elsewhere, the news received coverage from payments industry news source, The Paypers, as well as a slew of cryptocurrency blogs and publications.

At press time, the price of bitcoin on the service was roughly $260, a figure that represents a 10% premium from more liquid bitcoin exchange markets.

Businessman with newspaper, bitcoinclosed sign and Iranian flag images via Shutterstock