The apparent collapse of Bitcoin’s best-known and once-dominant trading platform has provoked outrage among its users, but it has also stirred hopes that the way may now be clear for more established players to transform and rein in a largely unregulated market.
Hours after it stopped trading without warning Monday night, the secretive Bitcoin exchange, Mt Gox, said that it would “close all transactions for the time being in order to protect the site and our users.” The action and brief statement left users wondering where their money went, amid accusations that as much as 6 per cent of the Bitcoins in circulation were now missing — worth more than $US300 million at current exchange rates.
Outside the offices of Mt Gox in central Tokyo, disgruntled Bitcoin traders and their supporters held up signs that read “Where Are My Bitcoins?”
“I’m filled with dLisbelief,” said Kolin Burges, a trader from ondon who flew to Japan this month after the exchange stopped paying out funds. “I was prepared for the worst, but it’s hard to believe they might have lost their coins.”
Yet the unanswered questions about Mt Gox did not shake the faith of many in Bitcoin. With one of its earliest online marketplaces seemingly gone, the world of virtual currency may now be forced to become a more mature part of the financial system.
“I think it’s a significant event, but I think there’s a decent chance that it is part of what we would call this sort of shaking out of the industry as it matures and slowly becomes a little more regulated,” said Benjamin Lawsky, New York state’s top financial regulator.
Mr Lawsky is not the only regulator trying to determine the next steps. Three commissioners from the Commodity Futures Trading Commission were at a meeting recently where Bitcoin was on the agenda, and the agency’s lawyers are examining the regulators’ options, according to a person briefed on the matter. Federal prosecutors in New York also are investigating potential legal violations that arise from use of the virtual currency.
Financial regulators around the world have weighed in over the last few months on how to oversee Bitcoin, with some countries, like Russia, banning it altogether, and others, like Germany, generally favoring the new technology.
The interest in Bitcoin is that its underlying technology holds the promise of allowing users to move money around the world without using an intermediary, thus lowering the cost of financial transactions.
Troubles at Mt Gox have rattled the Bitcoin world before. A year ago, the exchange suspended operations for several hours, and Bitcoin trading nearly ground to a halt.
But since then some prominent venture capitalists have invested millions in new Bitcoin companies that are intended to provide more sophisticated platforms for virtual currency transactions. Many of those investors went public on Tuesday to declare their continued confidence in the technology.
Cameron Winklevoss, an early Bitcoin proponent who, along with his brother, Tyler, owns about $US64.1 million worth of the virtual currency, said that Mt Gox’s closure “underscores just how far the Bitcoin ecosystem has come.”
“Several exchanges have seamlessly picked up the slack and the market price has shown remarkable resilience,” Mr Winklevoss said in an email. “Mt Gox is in the past, and the brightest minds in the room are hard at work building a responsible and secure future.”
Such optimism was reflected in the oft-volatile price of Bitcoin, which rose on Tuesday after plummeting overnight. Tuesday evening, the price of a Bitcoin stood around $US525, not far from where it was when the Mt Gox news emerged Monday night.
“There’s a little bit of a sense of relief that the whole thing didn’t crumble,” said Gil Luria, a managing director at Wedbush Securities, who has written research notes on Bitcoins. “Over the next few weeks and months, we’re going to see new exchanges either gain prominence or emerge.”
Many users of Mt Gox had long ago given up on the company after numerous incidents in which it was forced to temporarily shut down.
At one point last year, Mt Gox handled 80 per cent of all Bitcoin transactions. But the exchange’s market share began to significantly decline last year, when newer exchanges like Bitstamp in Slovenia, and BTC-e in Bulgaria, took its place, according to data from the Genesis Block, a virtual currency research firm.
A number of other early Bitcoin companies have also struggled recently. A few weeks before the problems at Mt Gox, the founder of the popular early exchange BitInstant, Charles Shrem, was arrested and accused of helping to facilitate drug transactions on the now-defunct online marketplace Silk Road.
“There’s definitely been a clear transition happening,” said Greg Schvey, the Genesis Block’s head of research.
Among the new, more experienced companies entering the space is SecondMarket, which runs an exchange for the buying and selling shares of private companies. On Monday, as Mt Gox was preparing to go offline, SecondMarket announced its plans to start a new, regulated Bitcoin exchange for major banks. Until now, virtually all Bitcoin exchanges have allowed anyone to sign up and trade, which has made them harder to police.
Companies dedicated to being more regulator-friendly for consumers and merchants, like BitPay, Coinbase and Circle, have also grown in number and size. BitPay, for example, is currently working with 24,000 merchants to take payments in Bitcoin, up from 10,000 last September and 1000 in 2012, according to a spokeswoman. Last year, BitPay processed $US110 million to $US120 million in transactions.
Some early Bitcoin adopters have been uncomfortable with the involvement of banks and regulators in a virtual currency whose early appeal was its apparent freedom from any central bank or government. But many of the new Bitcoin companies have said that virtual currencies will have to face more regulation if they want to be widely used.
“I think it’s important always to know what the rules of the game are,” said Steve Hanke, a professor of applied economics at Johns Hopkins University.
In Japan, financial regulators have so far declined to step in to help Mt Gox customers, saying the virtual coins are a traded product, not a currency, and therefore remain outside of their purview.
Tibanne, the company that operates Mt Gox out of Tokyo, according to the local registry office, has told other Bitcoin companies that it is planning to file for bankruptcy, according to John O’Brien, a spokesman for a coalition of Bitcoin companies that has been responding to the problems.
A bankruptcy administrator could distribute Mt Gox’s assets — any remaining Bitcoins plus any nonvirtual cash — to its creditors, a process that could take a year or more. But the company could also be acquired, given the value of its customer list and name recognition.
Even those who fear they have lost money they held with Mt. Gox remained enthusiastic on Tuesday about the potential of virtual currencies.
“My thoughts and my heart also go out to all of those others in the community who lost a lot more than me today,” said Rick Falkvinge, the 42-year-old founder of the Pirate political party based in Sweden. Despite losing what he said was $US 80,000 in Mt Gox, Mr. Falkvinge said that he remained “absolutely bullish on Bitcoin.”
Newly-listed comparison website iSelect has reported that “strong growth” in its health and car insurance divisions underpinned interim revenue growth of 18 per cent to $55.8 million.
The company increased earnings before interest, tax, depreciation and amortisation to $6.8 million, from $3.9 million, in the six months ended December 31.
Net profit rose a very large 1,698 per cent to $3.7 million, up from just $205,000 in the previous corresponding period.
Chairman Damien Waller said the company was pleased to meet EBITDA and revenue guidance for the half made in October last year, at which point the company downgraded its revenue forecasts made in its prospectus.
The downgrade followed a rough start to its time as a listed company, which included the resignation of chief executive Matt McCann just four months after its June 2013 debut.
The company is still searching for a new chief executive.
iSelect founds itself in trouble with regulators last September after its shares dived following the company’s June 2013 float.
Corporate watchdog the Australian Securities and Investments Commission asked iSelect to hand over all its records relating to an August 29 profit announcement, which revealed the company had missed its earnings targets.
Also requested were documents relating to iSelect’s announcement on the same day that it expected to meet the earnings forecast for the 2013 calendar year contained in its prospectus.
“The solid half on half growth reported today shows that the fundamentals of our business remain very strong,” Mr Waller said.
The company’s share price has declined 21 per cent since listing in June. It closed at $1.24 on Wednesday.
The ACT Government has banned battery cages and sow stalls. Photo: Graham TidyThe ACT Labor government has banned sow stalls and battery cages, in what it says is the most far-reaching legislation in the country.
The government supported Greens minister Shane Rattenbury’s legislation, which was part of his deal to become a minister in the Gallagher government.
Mr Rattenbury said it had been a long road to the ban and it sent an important message to the rest of the country.
”To ban these elements of factory farming gives me great joy but I understand there is more to be done,” he said.
He had received complaints from people saying the legislation did not go far enough, as there were other animal cruelty and factory farming practices in the ACT.
Nationally, about 70 per cent of laying hens, or 11,000 hens, were still kept in battery cages, in spaces often no bigger than a piece of A4 paper, with no room to stretch their wings, turn around, scratch, perch or show other natural behaviours, he said.
“These are living feeling creatures capable of experiencing fear, pain and distress. I find these statistics shocking.”
While there were no intensive piggeries in the ACT, sow stalls were used in piggeries just over the border.
Sow stalls could drive pigs insane, resulting in pressure sores and lameness, he said.
His legislation also outlaws the practice of trimming or removing chickens’ beaks, with fines of up to $7000 for an individual or $35,000 for a corporation for breaches.
No one from Labor spoke in Tuesday’s debate.
The Liberals voted against the ban, deputy leader Alistair Coe saying it demonstrated that Labor’s agenda had been hijacked by the extreme Greens.
Given the ACT had no intensive pig farms nor battery egg farms, the bill was redundant, he said.
He asked whether the government would next try to ban commercial whaling or nuclear power generation in the territory.
He dismissed the legislation as nothing more than Greens grandstanding.
The ACT Greens have tried five times previously to ban battery cages, each time rejected by Labor and Liberals, which were reluctant to move against the Pace Farm battery farm at Parkwood in Canberra.
But Pace stopped producing battery eggs after the site was vandalised in 2012 and now has a $7.5 million land deal with the government to convert to barn eggs.
Mr Rattenbury’s legislation defines battery cages as cages that do not allow the hens to fully stretch, perch, access litter and lay eggs in a nest. It does not apply to backyard chicken owners who use the eggs for their own consumption.
It also outlaws the practice of trimming or removing chickens’ beaks.
It outlaws stalls and farrowing crates (used while pigs are pregnant and after they give birth) and says pigs must be kept in appropriate accommodation – able to turn around and stand up without difficulty, have a clean and comfortable place to lie down, have access to the outdoors, and see any other pigs.
Mr Rattenbury said the law was the culmination “of many years of work that sets the ACT at a high benchmark”.
“This legislation is very clear,” he said. “You can still produce eggs and pork in the ACT but you need to do it in a way that is humane … Hopefully we can encourage the rest of the country to start to follow suit.”
Tasmania moved to ban sow stalls and battery eggs at the end of last year. The battery hen ban applies to new operators and the sow stall ban is to be phased in over three years.
Animals Australia welcomed the move. Campaign director Lyn White said it set a significant precedent for other states to follow.
Animal protection group Voiceless said: “This is a major step forward for animal protection. This act recognises that the quality of these animals’ lives matters, that they are not machines, but sentient creatures who experience extreme pain and stress when raised in intensive conditions and that the law should protect them from suffering.
“What is needed next is a nationally consistent approach to a ban on sow stalls, farrowing crates, battery cages and other such cruel and inhumane factory farming processes.”
Maggie Beer: full of grit and determination.From the outset, Maggie Beer is adamant she has no plans to launch a beer in her name. “Goodness no! My youngest daughter’s a beer drinker and she would love to. But it would seem like cashing in. But we do make wine and cider,” she laughs.
Maggie, alongside her husband Colin, runs a veritable foodie empire from her base in South Australia’s Barossa Valley. It’s an impressive feat given how tough the food business is.
She has been in business since 1978 when she and her husband established, of all things, a pheasant farm and restaurant in South Australia. But what possessed her to start a pheasant farm when, at the time, there was no market for pheasants and they had no experience running a game bird farm?
“It was just an idea and we thought, why not?” Maggie explains. Her husband, in the course of getting his pilot’s licence, had flown over game farms in New Zealand, which had given them the genesis of the idea. Although Beer was born and raised in Sydney, her husband was from the country and hated city living, which is what let them to move from Sydney to SA to establish the Barossa Pheasant Farm Restaurant.
Colin subsequently won a Churchill Fellowship to study game birds, but Maggie acknowledges there were many technical and bird husbandry issues at the start. As to how the couple was able to make the farm a success, Maggie says a light-bulb moment happened when they visited a turkey farm in Scotland. The farm made sure not a single bit of its birds were wasted. She bought back this philosophy to the pheasant farm.
“I’d sell raw birds and show people how to use them, even down to how to cut them up when they were having picnics on the side of the dam,” she explains.
Not much has changed in her approach to business since then. She’s fanatical about using as much local produce as she can and turning any waste products into something useful. For instance, instead of discarding the waste from the quinces she mills for her famous Maggie Beer Quince Paste she uses it to make syrup that’s added to her ice-cream.
‘That’s the way we roll,” she says.
Maggie comes from a business background. Her parents had a manufacturing business, so it’s no surprise she’s been so successful. But it was the failure of this business that established her work ethos.
“My parents went bankrupt and we lost everything. So I had to leave school at 14 and I, along with my brother, who was two years older, helped to keep the family. I was lucky because I had grit and that hardship game me such strength. So I learnt great resilience and drive from an early age.”
Today, a cornerstone of her business is her export kitchen, which has grown to a staff of 110. The business now has a CEO and Beer says it has grown by 20 per cent each year for the past 10 years.
Maggie still drives product development and works a 70-hour plus week and will celebrate her 70th birthday next year. She says her obsessive, micro-managerial style is balanced by her husband’s more laid-back nature. But she says they are both risk-takers, lateral thinkers and troubleshooters.
As for what’s next, she says she still has so many ideas it would be impossible to execute them all in one lifetime.
“I’m like the monkey on everyone’s shoulder. To me, ideas, quality and relationships are so important. I get great joy out of seeing the ideas I work on every day come to fruition,” says Maggie.
“The food business is very hard. No matter how ethical you are, new regulations are always coming and there’s always new ways of doing things. The business is like another child for me. I’m not day-to-day, but I can’t just step back. I’m driven by maximising our produce and the ideas I have because we live in such as amazing place.”
Maggie Beer has recently been inducted into the Australian Businesswomen’s Network 2014 Hall of Fame, which recognises the achievements of female entrepreneurs from diverse industries.
GIRL POWER: Around 75 per cent of Swinburne Online’s students are women, evidence that the institution offers flexible study arrangements.
THE flexibility of online study is proving popular withwomen.
The majority of students enrolled with Swinburne Online are female (75 per cent), with many indicating that “family responsibilities” made it difficult or impossible to attend on-campus courses.
Online education allows students flexibility to study when it suits their personal schedule, especially for those with children and those who wish to work while studying.
“The majority of female students studying with us (80 per cent) are in their 20s and 30s,” said Sacha Nouwens, the analytics manager at Swinburne Online.
“We have a small proportion of school leavers, with around fiveper cent of female students under age 21.
“Around 50 per cent of our female students are aged between 21 and 30; 28 per cent are aged 31 to 40.The remaining 16 per cent are 41 or older.”
The most popular Swinburne Online courses for females are the Masters /Graduate Diploma of Teaching (Primary), Bachelor of Education (Primary), and the Bachelor of Education (Early Childhood). The Bachelor of Social Science (Psychology) and Bachelor of Business (Accounting) also attract high volumes of women.
“At a graduate level we currently offer just the Masters/Grad Dip of Teaching (Primary). The spread across age groups is fairly similar for undergrad and grad degrees, except graduate students tend to be a couple of years older on average.
“The average age is 32 in graduate programs compared to 30 in undergraduate programs.”
Find out more about flexible study options by visitinghttp://www.swinburneonline.edu.au.
* This article has been written by an independent journalist as part of a commercial agreement between Fairfax Media and Swinburne Online.