Forget Air Miles, This Credit Card Firm to Give Customers Cryptocurrency

Want to get into cryptocurrency but the volatility and exchange fees put you off? This startup might have the ideal solution – a credit card that pays customers Bitcoin instead of other rewards.

Spend Inflationary Currency, Get Deflationary Currency

Typically, credit card companies offer incentives to get customers to use their cards. These might be cash back on purchases, or air miles, or some form of reward points. One new company are trying to transfer this model to the world of cryptocurrency. Thomas Harrison of Blockrize is hoping to reward his customers directly in Bitcoin or Ethereum.

Despite being barely out of the “drawing board” phase of planning, 25-year-old Harrison claims there is already interest in the idea. He told MarketWatch that there is currently a 2,000-person list of customers eager to receive one of the first cards from Blockrize. This is impressive, particularly when you consider the company is lacking a card issuer at present.

The idea is simple. Use the card for purchases in store or online and receive 1% of the value spent back in crypto. Customers will be able to decide whether they want paying in Bitcoin (BTC), Ether (ETH), or a 50/50 split of the two. The plan is to find a suitable banking partner and to launch by the end of the year.

Harrison explained to MarketWatch that he started investing in digital currencies in September 2017. Despite finding it “an exhilarating experience”, the young entrepreneur was put off by the steep fees he faced at the likes of CoinBase and other exchange services. It was in response to these charges that he came up with the idea for Blockrize.

Nick Clements, a personal finance expert at MagnifyMoney and former credit card company employee agrees that a crypto rewards scheme is a good idea. He likened Blockrize’s model to existing reward programs such as flyer miles. He went on to state that many people wanted exposure to cryptocurrency but were scared off by the volatility or the complexity of getting involved. Such a rewards program could help get the lay person familiar with using cryptocurrency without any immediate cost (or risk) to them.

For now, Harrison is the only full-time employee at Blockrize. He is, however, looking for more team members. The young company are currently receiving advice from Zak Allen of fintech company Shogun Enterprises, Alex Atallah from, a peer-to-peer crypto market, and financial services advisory company Card Linq’s Jonathan Gelfand.

One potential stumbling block for the startup will be taxation. It’s unclear whether the crypto rewards will be subject to capital-gains or another form of taxes. However, the company have appointed a legal team to help figure that one out.

It seems likely that the accruing gains made on such a card would need to be taxed in some way, particularly as Uncle Sam seems keen to take as large a slice of the crypto pie as possible. However, as with any cutting-edge technology, legislation and regulation is lagging behind the rapidly evolving space. As such, there is no precedent or law governing the tax obligation of such a reward structure for now.


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A motivational Youtuber from Mexico has been arrested over the alleged kidnapping of Thania Denisse, a 33-year-old lawyer. Germán Loera is thought to have led a gang of five to kidnap the woman. The group are also reported to have demanded the ransom be paid in Bitcoin.

Kidnapper has Scant History of Bitcoin Involvement

Loera has been an active Youtuber creating various motivational and self-help videos. These were relatively unknown until the 23-year-old was reported to be connected with the kidnapping. Naturally, his hits have increased rapidly since then. Local news source El Pais report the Chihuahua public prosecutor assigned to the case as stating:

“According to the investigation, the leader of the gang is Germán Abraham L. A., who has several videos on the internet as a Youtuber.”

The young internet personality is currently being held in custody and awaiting trial. Whilst he has no prior convictions, local media have hinted at a potential motive. Following the arrest, outlets reported that Loera’s father was recently murdered by a group of organised criminals. This has later been confirmed by the public prosecutor although there has been no explicit link made between the kidnapping and the murder yet.

There are also no real previous connections between Loera and Bitcoin. The only clue might lie in a Tweet to Bitso, one of the first Mexican cryptocurrency exchanges. The Tweet read:

 “I’d like to speak to you. We are the heads of marketing for the biggest bitcoin casinos in the world.”

The message did not receive a public reply, however. It seems likely therefore that the decision to accept Bitcoin as a ransom was done because of its pseudonymous qualities and the general misconception that Bitcoin transactions cannot be traced, rather than something deeper.

Since the story broke, comments on social media have been particularly scathing to the accused kidnapper. Some of called him a “delinquent” or a “liar” because of the hypocrisy of his self-help videos. Meanwhile, others have called for him to be executed by the state – despite the fact that the death penalty does not exist in Mexico.

The case of Loera is not the first time a kidnap ransom has been demanded in Bitcoin. Late last year we reported on a crypto-analyst at UK cryptocurrency exchange EXMO being kidnapped in Ukraine. The exchange ended up paying over $1 million for Pavel Lerner’s release.

Meanwhile, Bitcoin is continuing to be used by cybercriminals as a tool in ransomware attacks. These “digital kidnappings” involve the locking of data on infected machines. Hackers then demand a payment is made in Bitcoin for the information’s release. Last year, the WannaCry attack is thought to have infected over 200,000 computers in 150 countries.

Nobuaki Kobayashi, a Japanese attorney and trustee in the bankruptcy case of Mt. Gox, has stated today that he has sold over $400 million worth of BTC and BCH. Apparently, the sales have been ongoing since September. According to a statement, Kobayashi is selling the digital assets to raise money for creditors who lost out thanks to the early crypto exchange’s insolvency in 2014. The document released earlier also states that he has more BTC and BCH to sell.

Does That Explain Today’s Dip?

According to reports in Bloomberg, Kobayashi has an additional $1.9 billion in tokens left to sell. It is believed that he will consider exchanging them for fiat currency to pay back Mt. Gox creditors in the future.

The case of Mt. Gox caused massive disruption to the cryptocurrency market back in early 2014. According to the official company line, around 850,000 Bitcoins were appropriated from the first major exchange at the hands of hackers. The BTC was worth around $500 million back then. Of course, today they’re worth considerably more.

Following the supposed hack, Mt. Gox filed for bankruptcy protection. They later claimed that they were able to recover around 200,000 BTC but the rest were lost.

The document issued today does not outline how Kobayashi intends to sell the Bitcoin and its derivative, Bitcoin Cash, which did not exist when the funds went missing in the first place. However, he did state that he was trying to get “as high a price as possible”, suggesting that he does not intend to simply dump them on the market.

The news has coincided with a dip in the price of Bitcoin. The most popular digital currency shed around $1,000 off its price in just an hour and a half earlier today. However, based on the length of time that Kobayashi claims to have been selling Mt. Gox’s remaining Bitcoin, it seems unlikely that the abrupt downwards price pressure has been caused by his statement or actions.

A more likely explanation of the drop is the SEC announcement from today. They declared that all cryptocurrency exchanges must be registered with them. A statement from the agency read:

“If a platform offers trading of digital assets that are securities and operates as an ‘exchange’… then the platform must register with the SEC as a national securities exchange or be exempt from registration.”

At the time of writing, the price has returned back above the $10,000 level. Such knee-jerk selloffs in response to any news are common in the space. With so much uncertainty surrounding the future of the emerging asset, the slightest story can panic investors. Similar downwards price pressure occurred after South Korea was simply rumoured to be “cracking down” on cryptocurrency earlier this year. The commotion turned out to be misplaced. The government there were seeking to tackle illegal activities associated with cryptocurrency – which seems much more reasonable.

Back in 2015, an Oregon man goaded the Federal Government to come and arrest him over a donation made to Edward Snowden’s Legal Defense Fund. Almost three years later, Kristopher Ives has finally got his wish.

People in Glass Houses…

Ives grabbed the attention of the media back in April 2015. He had taken to Reddit to protest Obama’s legislation targeting those supporting overseas cybercriminals. Edward Snowden, the infamous whistle-blower and general “thorn in the side” of the US authorities, had been accepting Bitcoin as part of his Legal Defense Fund. Ives, an anarchist, Bitcoin proponent, and self-proclaimed computer nerd, felt that this was a direct attack on Snowden’s fund.

To protest this, he sent Snowden 33 cents worth of Bitcoin before demanding that he be arrested for it. His post read:

“It’s not much but it’s the principle of the matter. Please come arrest me. I live in Oregon and my name is Kristopher Ives and you can reach me at 503-383-1047. This isn’t a release of personal information as these are my business credentials publicly listed on my Github page, which I consistently link to projects I work on. I ask moderators don’t remove my information.”

He also listed the proof of his 33 cent transaction taken from a popular Bitcoin blockchain explorer. In addition, Ives Tweeted directly to the then-President Obama to protest what he felt was an unconstitutional act by the premier:

Despite several people following Ives’ lead in donating funds to Snowden and news sources picking up on the story, the Feds did not act on his goading.

However, seemingly emboldened by his flouting of the law, it has later emerged that the very next month after the Reddit incident, he attempted to blackmail an undisclosed victim of a hack attack. The Daily Beast reports that Ives threatened to “impair the confidentiality of information” obtained in the hack, demanding money “and other things of value” for said data to be kept secret.

In addition to the charges of blackmail, Ives’ has also been indicted for seventeen counts of credit card fraud. It’s thought that these were used to commit criminal acts some twelve months after the blackmail and Reddit event. More detailed information about the charges are not yet known and the prosecutor in the case was not available for comment. We do know that Ives’ five-day trial is scheduled for May 1st, however.

Of course, the current indictment has nothing at all to do with his earlier pleas for his own arrest. It does, however, feel somewhat amusing that Ives has finally been indicted. Thankfully, it is for crimes that sought his own personal enrichment, rather than his altruistic act of self-martyrdom for the cause of Snowden, a genuine freedom fighter.


Image: Flickr


Authorities in a city in the state of New York are considering taking action against cryptocurrency mining. Plattsburgh attracts commercial miners thanks to their cheap power supplies. However, officials there believe the drain the activity places on the grid could be unfairly increasing the cost to other citizens of the city.

Cheap Hydroelectricity Limited in Plattsburgh

The reason cryptocurrency miners have decided to set up shop in Plattsburgh is that the city benefits from some of the cheapest power in the entire US. This is thanks to their membership in the Municipal Electric Utility Association. Since the 1950s, the St. Lawrence River has been producing hydroelectric power and Plattsburgh receives a share of the low-cost power.

Previously, the city claimed to have the lowest power rates in the entire nation. However, when the inexpensive electricity runs out, Plattsburgh are forced to buy in power on the open market. The additional cost is then passed onto the city’s ratepayers.

With the hydroelectricity costing just less than 5 cents per megawatt hour and the bought in power costing around 37 cents, the difference in monthly bills can be dramatic. Municipal Lighting Department Manager Bill Treacy stated that the increase could be as much as $40 a month. He told local news source Watertown Daily Times:

“People are surprised when their bills are so high.”

This winter is the first time the city had to buy in additional power from elsewhere in several years. Officials believe that increases in local mining operations combined with a particularly cold winter have contributed to the extra draw.

To attempt to continue supplying residents with cheap power, the Mayor has proposed a temporary ban on cryptocurrency mining. It is believed that such a measure will allow Plattsburgh to assess the true impact of the electricity-intensive activity. This will include the cost burden on local residents, as well as various health and safety factors affecting mining operations.

However, one of the city’s miners believes the 18-month ban is unnecessary. David Bowman of Plattburgh BTC fears such measures could stifle innovation. He told WCAX:

“You know you need to protect people in the town from being adversely affected by increased electricity rates but I think there are ways to do that like possibly charging the miners more… I think it’s not a great idea to just completely ban the whole thing– it’s just too new.”

Nothing has been decided yet but the moratorium is due to be debated at a public hearing on March 15. It remains to be seen whether Plattsburgh will follow the recent example set by China in trying to remove crypto miners from their society. It would be the first US city to do so, however.

Shares in Square Inc. are rising once again. This time, however, there seems to be little news from the company themselves to justify such investor exuberance. The only “recent” development comes from a little known cryptocurrency website who reported earlier today that the global payments processing company were planning to integrate Bitcoin functionality.

Deja Vu..?

Those who stay up-to-date with news surrounding cryptocurrency will probably instantly recognise the claims by Cryptonia as old news. We at NewsBTC have reported on Square’s plans to include cryptocurrency options in their application several times since last November.

Whilst additional positive news did come from the company late last month, it hardly explains today’s surge in the price of their shares. The most recent Square development that could account for a move in the price of their stock was their CEO expressing further plans for cryptocurrency inclusion in the future. Finance Magnates report that the company were toying with the idea of rolling out consumer-to-merchant payments via Bitcoin in the near future. Jack Dorsey said on February 28, 2018 to analysts:

Bitcoin, for us, is not stopping at buying and selling… We do believe that this is a transformational technology for our industry and we want to learn as quickly as possible.”

Such a desire to be positioned at the forefront of a potential financial revolution would likely excite investors and would thus explain a move in the price of the stock last week. However, it hardly explains the 8.7% rise reported by Bloomberg earlier today – the price reached an all-time high of $50 in New York. This made it the number two ranked performer on the Russell 1,000 Financial Services Index for the day. Curiously, the price was relatively unaffected by the late February announcement by Dorsey but rose sharply this morning between the opening of trading and around 11am. This coincides with the publication of the Cryptona article and little else of note.

Whilst it is impossible to say what exactly caused today’s increase in price for Square, it would come as little surprise to learn that the move was caused by several month old news doing the rounds online once again. The cryptocurrency space reacts to the slightest news and there is certainly a sense of mania surrounding the markets.

A look at the fortunes of the likes of Long Blockchain (formerly Long Island Ice Tea) and Kodak following their own attempts to redirect themselves towards the exciting new industry highlight the lack of investor rationality surrounding the space. The former surged from $2.44 to $6.91 following their own re-brand last December. Meanwhile, when the camera manufacturer Kodak claimed to be focusing more on blockchain, their own shares rose from $3.10 to $10.70 in early January. Evidently, investors are hungry for a piece of anything that involves either of the two trending “B” words.

An ICO for a company called Miroskii has been outed for listing Ryan Gosling as part of their team. The Chinese coin offering gives investors the chance to “join the Crypto Revolution” but there are several red flags over its legitimacy. The chief of these, of course, is their decision to include a stock photo of a Hollywood actor on their website.

Miroskii Appears to be the Latest in a Growing List of ICO Scams

On the Miroskii website, under the section listing the project’s team members, there is a headshot of Ryan Gosling, the star of The Notebook, Drive, and La La Land. The name accompanying the photo is “Kevin Belanger”. He is listed as an “experienced graphic designer with a clear focus on identities and illustration” for the company.

Eagle-eyed Twitter user @CryptoShillNye pointed out the uncanny resemblance of the Miroskii artist and the A-list celebrity:

Miroskii has presented themselves as a crypto coin aimed at revolutionising the financial industry. They claim on their website to have developed “highly secure encrypted decentralized blockchain technology.” Amongst the sea of buzzwords, it is stated that they have united experts from several countries where cryptocurrency is incredibly popular: China, Hongkong, Singapore, and Japan.

As mentioned, there are several other causes for concern over the legitimacy of the Miroskii ICO. CNet highlighted that many of the other members of the team appear to be fraudulent too. Perry Henderson, a supposed CEO of various online companies, turns out to be a Texas estate agent, Joel Hermann, the founder of Mysterium Network, is, in reality, a lawyer from New York, and Craig Gulledge is actually Peter Roper a business consultant from the firm The Family Business Man. Further examples of the fake Miroskii team have been provided by Claus Wahlers.

Miroskii also claims to have raised over $830,000 from private investors. This is despite them only having a combined total of seven followers on prominent social media platforms such as Facebook, Twitter, and Instagram.

Whilst the Miroskii case appears to be the most blatant (and amusing) example of a fraudulent ICO, it highlights just how simple it is to create such a sale and dupe gullible investors into parting with their cash. However, most scam ICOs are much less easy to spot than the Miroskii effort. Such a proliferation of fraudulent companies associated with the revolutionary funding method has led to calls for greater regulation to protect investors in the space.

Eleven individuals have been arrested in Iceland over the theft of 600 Bitcoin mining rigs. The thefts occurred in December and January. Authorities are labelling the incident the largest organised robbery in the history of the small island nation.

Mining Rigs Don’t Require Reselling for Criminals to Profit

Despite the fact that three of the four robberies took place last year, and one in January, police in Iceland have thus far refrained from making the details public. Their rationale is that the equipment’s use would alert authorities to the stolen goods’ whereabouts. Such a large number of miners suddenly coming online in the small nation would cause a spike in electricity use. This would allow law enforcement to locate them.

So far, there have been eleven arrests made in connection with the theft. Of these, two people will remain in custody by order of a Reykjanes District judge.

Unlike most thefts, there is a strong impetus for the criminals to keep the stolen goods. Selling them would attract attention and their use can be highly profitable, particularly in a nation with as cheap electricity and as cool a climate as Iceland. Mining rigs consume vast quantities of electricity and this causes them to heat up. Iceland is, therefore, an ideal location for the activity.

Police have been monitoring electricity consumption patterns since the thefts. They have also called upon local ISPs, electricians, and owners of storage units to report any suspicious behaviour.

ABC report Police Commissioner Olafur Helgi Kjartansson of the southwestern Reykjanes peninsula said:

“This is a grand theft on a scale unseen before… Everything points to this being a highly organised crime.”

As the price of cryptocurrencies increases, we are likely to see even greater incidences of mining equipment thefts. Earlier this week, we reported a similar case in Malaysia. In this example, a group of nine were arrested. They’re suspected of stealing over 58 mining rigs. At least five different thefts were made in the area, of which the nine have been charged with two. The identities of the culprits were exposed following their attempts to sell the equipment via a dedicated website and on social media. Local police stated:

“We were acting on information obtained when the suspects attempted to sell the equipment via a website and Facebook… We managed to recover 58 machines worth more than RM500,000(US$127,000).”

Cryptocurrency mining equipment is becoming a highly valuable target for criminal gangs across the planet. The current mining reward for cracking each new block is 12.5BTC. At today’s prices, these are worth around US$137,500. Being such lucrative loot, it is clear why such incidences are on the rise.

A young startup named Casa has recently launched a product to make cryptocurrency storage even more secure. They hope to provide clients with the most cutting-edge wallet solution available. This will make it nearly impossible to obtain private keys from individuals with large crypto holdings by way of extortion.

Casa Provides “Premium Hodl Software”

According to CEO and Founder Jeremy Welch, Casa is a cutting-edge cryptocurrency storage solution for high net worth individuals. The digital wallet requires users make three individual requests to transfer funds before any transaction is authorised. The wallet itself uses five access keys. These must be stored in five different locations.  One of these will be on the users’ phone and Casa will keep one for emergencies. The company recommends that users store each of the other three at their home, their office, and at their bank’s safety deposit box. The important thing is that no two are left in the same location.

Since it requires three of the keys to access funds stored on the Casa wallet, and only two are actually in the user’s possession, the likelihood of an individual being coerced into turning over private keys is remote. Even if a would-be thief held the user at gunpoint, accessing their digital currency would require a trip to the bank, or office. This would represent more than a slight inconvenience for the attacker.

Just six months old, Casa has already raised $2.1 million dollars from venture capital firms such as Lerer Hippeau and Boost VS, helping Casa to launch their initial product. For now, this version only supports Bitcoin. There are, however, plans to launch provide services for additional cryptocurrencies, starting with Ether, later this year.

Casa’s commitment to providing the highest level of security for cryptocurrency users has attracted the interest of one of the space’s most respected engineers. Jameson Lopp jumped ship from a similar wallet solution at BitGo to work on Casa with Welch and the rest of the team. He spoke to Forbes about his decision to pursue security projects:

“The best thing you can be working on is a problem you have yourself.”

One of the biggest issues facing the Casa team is getting their customers to actually use the product correctly. Humans often seek shortcuts and in doing so render the additional security offered by the wallet redundant. Emin Gün Sirer, a professor at Cornell offered his opinion on Casa’s dilemma:

“A user might say, ‘Well, I’m going to place two of my extra Trezors next to each other on the mantle.’ Now you’ve fooled yourself into thinking you have extra security.”

It all sounds fantastic, right? But before rushing to Casa’s site to put in your order, it’s worth pointing out the price of the service. Whilst Welch refused to give an actual amount to Forbes, he did state that Casa would charge at least five-figures on an annual basis. Evidently, the old adage rings true on this occasion, “if you have to ask the price, you can’t afford it.”

Cryptocurrency payments appear to be finding a niche within the real estate industry. There are already several documented examples of people wishing to trade a property in exchange for digital currency. Some experts are predicting that the trend will continue and we will see more of these deals in future.

Buying a Home With Bitcoin is Easy

There are some key advantages of using cryptocurrency to pay for property. The most prominent of which would be a lack of middlemen required to complete a sale, as well as the ease and low cost of sending large sums of money from one party to another. Director of Communications at the Coin Center, Neeraj Agrawal, told the LA Times:

“Within the context of real estate, it makes sense to use cryptocurrency in those types of transactions… Cryptocurrency is a way to send large amounts of money pretty easily with relatively low fees and little interference from middlemen.”

For these reasons, Agrawal feels that Bitcoin and cryptocurrency payments are more likely to be useful when buying large items like homes or vehicles than small ones such as the oft-used example of a cup of coffee.

True enough, the last few years have seen more people willing to accept cryptocurrency payments for property. This has led some of the most enterprising brokers to explore how they can make the process as simple and smooth as possible for their clients. Andrew Canter, CEO of real estate firm Canter Companies, explains about his decision to get involved with Bitcoin:

“We realised there is so much new wealth in the crypto space… There are a lot of new buyers and a lot of people that have seen their wealth fluctuate over the last year.”

Being such a new method of payment, some are experiencing various challenges trying to either buy or sell using cryptocurrency. A real estate agent who represented buyers in two deals for properties in Manhattan Beach, LA was one such example. Justin Miller of Beach City Brokers found that established escrow and title companies were anything but accommodating to his requests for information or assistance when he was putting crypto deals together. He recalls his experience:

“No one wanted to deal with bitcoin. They didn’t understand it.”

Meanwhile, Josh Cincinnati of the Zcash Foundation found that he encountered his own challenges when he tried to buy a home in Virginia with cash from cryptocurrency investments. He was told that banks wouldn’t accept the money to approve a loan because they were unsure of its origins. He was requested to prove that the funds were indeed from legitimate trade. In response to this, Cincinnati submitted a detailed account of every transaction he’d made in the last two years. This still wasn’t enough and he was forced to explore alternative methods.

Hopefully, such stories will soon sound as ridiculous to the banks and real estate agents refusing to touch Bitcoin as they do to people in the know.
Mike Michalski of RE/MAX Estate Properties spoke of the simplicity with which crypto can be confirmed as belonging to someone and why some were reluctant to deal with it:

“Proof of funds for a bitcoin sale literally requires the buyer to sit down with a smartphone, open a blockchain app that displays the total value of their bitcoin and show that to the seller… Both the buyer and seller wanted to make the deal happen, but this is all new. There’s just not a lot of understanding or documentation.”

With cryptocurrency providing many of its earliest investors with great wealth, it’s likely that the numbers of those wishing to transact in Bitcoin for real estate will grow. In 2017, there were plenty of examples to suit both ends of the market. The Kalinka Group in Moscow posted one mega-mansion for sale in Bitcoin last September. Meanwhile, a resident of the dilapidated UK seaside town of Grimsby advertised a somewhat more modest home for cryptocurrency.

With stories like that in the LA Times involving a Portuguese citizen who only received interest in his home after updating the listing with a price in cryptocurrency becoming more commonplace, it seems that 2018 will see a continuation of the trend.