Couple Trying To Trademark Bitcoin Via Dubious Claims

from the any-penalties-for-such-filings? dept

Via Slashdot we learn that someone has filed for a trademark on the word Bitcoin. The Slashdot report claims that it's the lawyer, Michael S. Pascazi, filing for the trademark, but it's at least a little more complicated. It looks like Pascazi is acting as counsel for Magellan Capital Advisors. However, it does appear that Pascazi may have some further direct connection to Magellan, as the example of "first use" in commerce sent with the trademark filing is a letter from Magellan to some guy (Michel Mouchon) offering to sell "Bitcoin"... and the letter is signed by Celine M. Pascazi, which the Slashdot report says is Michael's wife. Furthermore, Pascazi's law firm has put up a pdf file touting the benefits of Bitcoin, and noting that Bitcoin is pending trademark to Magellan. On top of that, the pdf lists Celine Mouchon Pascazi as working for the Pascazi Law Offices.

Mouchon? Oh wait. Michel Mouchon is the person the original offer was made to... I'm sure that's just a coincidence, right?

Yeah, it's not hard to put two and two together here. I mean, just the fact that they're claiming the first use in commerce was June 22nd of this year should lead to the application not passing the laugh test. But I do wonder, are there penalties for trying to mislead the USPTO in a trademark filing?

Filed Under: bitcoin, celine pascazi, michael pascazi, trademark
Companies: magellan capital advisors, pascazi law

EFF Drops Bitcoin Over Concerns About Legality

from the is-that-reason-good? dept

I have to admit to being both skeptical and fascinated about Bitcoin. I think it's a very interesting experiment worth following, but I'm just not sure it can really succeed (though, I think it may create some lessons that others can build on). However, it has been growing, getting attention and popping up as an acceptable currency in some surprising places, and not surprisingly, there's been some significant backlash, with some folks pointing out its problems, and even some (mostly clueless) politicians threatening Bitcoin.

Making things interesting is the news that the EFF will no longer accept Bitcoin. It had started accepting Bitcoin donations a little while ago, but has since rethought the concept for a few reasons. The key point is that they're not entirely sure of the legality of Bitcoin and its uses, and want to avoid getting mixed up in a lawsuit over that as a subject, rather than as an advocate:

We don't fully understand the complex legal issues involved with creating a new currency system. Bitcoin raises untested legal concerns related to securities law, the Stamp Payments Act, tax evasion, consumer protection and money laundering, among others. And that's just in the U.S. While EFF is often the defender of people ensnared in legal issues arising from new technologies, we try very hard to keep EFF from becoming the actual subject of those fights or issues. Since there is no caselaw on this topic, and the legal implications are still very unclear, we worry that our acceptance of Bitcoins may move us into the possible subject role.

Some, such as Jim Harper, find this reasoning to be weak, saying that this is a bogus excuse, since lots of technologies that the EFF uses are legally ambiguous at the start:

Bitcoin is legally novel. But every new technology is legally novel. EFF didn't shy away from publishing commentary online while publisher liability was legally ambiguous.

Accepting a Bitcoin donation is like accepting a donation in kind, in contract rights, or in cat food. If it's worth taking, you go figure out how to accept the donation and square it with existing law. If it's clearly illegal, you don't accept the contribution. (EFF would have said so if they felt it was.) If it's in the middle, a defender of rights to use technology should be inclined toward accepting Bitcoin and clarifying the law, not away from accepting Bitcoin in deference to legal ambiguity and free-ranging government power.

I recognize both arguments, and I think that the EFF is basically saying it's interested in these issues, and certainly willing to get involved in a potential legal dispute down the road -- but it would prefer to do it as an advocate, rather than as the subject of a lawsuit -- and it still doesn't fully understand the legal implications (and, likely, technical situation) of Bitcoin itself, so it doesn't have a firm position on the issue that makes it worth fighting for. I respect that, though, I do wonder why the EFF didn't consider this originally and simply not use Bitcoin in the first place.

Filed Under: bitcoin, legality, money
Companies: eff

Senator Schumer Says Bitcoin Is Money Laundering

from the apparently,-he's-unfamiliar-with-cash dept

A few months back, we explored Bitcoin, and the growing attention it was receiving. The distributed currency has certainly been getting a lot of attention lately (causing the exchange rate to skyrocket). Of course, as with any such thing, there was bound to be some sort of backlash from political circles, and this one was extremely predictable. Last week, Gawker wrote a story about Silk Road, the online drug marketplace that users can only access via TOR and where the only currency accepted is Bitcoin. To be honest, the story sounds a little too good, and too "Hollywood" to be real, but perhaps it is real. I find it a little difficult to believe that it has all that many users, given the complex nature of getting it to work.

Either way, Senator Chuck Schumer, who can grandstand with the best of them, apparently got handed that article and saw an opportunity to publicly demand that something must be done about Silk Road. It seems clear from his remarks that Senator Schumer has never heard of TOR:

"Literally, it allows buyers and users to sell illegal drugs online, including heroin, cocaine, and meth, and users do sell by hiding their identities through a program that makes them virtually untraceable," Schumer said at a news conference Sunday. "It's a certifiable one-stop shop for illegal drugs that represents the most brazen attempt to peddle drugs online that we have ever seen. It's more brazen than anything else by lightyears."

Lightyears? Really? In another report he claims that Silk Road and other drug sites are "flooding our streets" with drugs. Except... they're not. There are probably a small handful of people using things like Silk Road today, and they're almost certainly doing it for home use, rather than to "flood the streets." But, that doesn't make for as good a form of grandstanding.

As for "the program that makes them virtually untraceable," he seems to ignore the fact that Hillary Clinton (his former co-Senator from the state of New York) has talked up the value of software like TOR, which makes identities untraceable, as an important tool for freedom of expression around the world. Thankfully, Schumer doesn't seem to go quite as far as directly blaming TOR, though he doesn't appear to separate TOR from Silk Road, despite them being two different things. Also, lightyears? Really?

What he does go after, however, is Bitcoin:

"It's an online form of money laundering used to disguise the source of money, and to disguise who's both selling and buying the drug," said Schumer.

Um. You know what else is a form of currency that is used to disguise the source of money? Cash. And, last I checked, it's still legal tender. Blaming the semi-anonymous nature of Bitcoin is severely misplaced. In fact, in the original Gawker article, there's an update at the end (perhaps Schumer didn't get that far, or never reloaded) where it points out that Bitcoin really isn't quite that anonymous, and quotes a Bitcoin developer as noting that trying to buy drugs via Bitcoin "is pretty damned dumb."

But, according to Schumer, it's "a form of money laundering."

This will get interesting. No matter what you think of Bitcoin (and I'm certainly not sold on the concept), it's pretty clear that governments will attack such forms of currency if given the chance. A silly story about something like Silk Road opens up just such a chance. My guess is that Schumer won't actually do anything about Bitcoin right now (the focus appears to be mainly on Silk Road), but it won't be long before we see more politicians seeking ways to "do something" about Bitcoin by falsely painting it as something evil, just because some people use it for illegal purposes.

Filed Under: bitcoin, chuck schumer, money laundering, silk road

DailyDirt: In Money We Trust

from the urls-we-dig-up dept

Fiat money only has value because governments have established its value by decree. And the value of currencies can be reset -- such as Brazil's cruzeiro currency when it was replaced by the Unit of Real Value (URV). Here are just a few quick links on other somewhat "temporary" currencies.

• Long ago, the island of Yap created huge, heavy, carved pieces of limestone as a form of currency. Since moving the stones is pretty difficult, these "coins" are transferred abstractly by just changing who owns the stone. [url]
• Bitcoin is a digital currency based on a cryptographic scheme -- preventing fraudulent transactions and allowing for reliable transfers without central banking entities. Interestingly, Bitcoin (briefly) achieved parity with the US dollar earlier this year, but it hasn't sustained that value. [url]
• The virtual economy of Second Life is based on another digital currency, the Linden dollar. However, the Linden dollar is governed by Terms of Service that explicitly state that the Linden is not real currency or any type of financial instrument. [url]
• To discover more interesting stuff on economics, check out what's currently floating around the StumbleUpon universe. [url]  

By the way, StumbleUpon can recommend some good Techdirt articles, too.

Filed Under: bitcoin, cruzeiro, money, second life, urv, yap
Companies: linden labs

Can Bitcoin Really Succeed Long Term?

from the questions-to-ponder dept

For quite some time, I've been interested in the general concept of currencies and how money works in general. I remember an early episode of NPR's Planet Money podcast, in which they tried to answer the simple question: what is money? They quickly discovered it's not an easy question to answer (and, in fact, those working on the podcast have revisited the question many times in many interesting ways -- including a fascinating episode a few months back looking at the Island of Stone Money. That episode discussed the island of Yap in the South Pacific, that for many years used massive limestone discs as money. And, by massive, I mean sometimes weighing upwards of a ton. In other words, it didn't have one of the key features that many normally associate with "money," which is that it's a "currency of exchange." In theory, you can't easily "exchange" a giant rock.

But the clever islanders on Yap came up with a solution. It was made clear who actually owned which stones, and then you could effectively transfer "title" to the stones, even if you didn't move the stones themselves. There was even the story of boat that was bringing in a new giant limestone disc (the limestone all came from another island), and due to a storm, the boat capsized and the stone sunk to the bottom of the ocean. However, it still counted as money, just so long as everyone knew whose it was. Now, when you hear that at first, it sounds ridiculous, but as the Planet Money folks pointed out, is it really all that different than your bank account? The only reason you have "money" in your bank account is because the bank marks it in its database. The bank isn't literally holding a stack of cash for you. In fact, as soon as you give it your money, it's probably handing it out to someone else.

All that brings me around to the question of Bitcoin. In various techie circles, there's been a fair amount of buzz about Bitcoin lately. Especially following efforts by other payment companies like Paypal and Mastercard to cut off contributions to Wikileaks, there's been a lot more interest in figuring out what infrastructure pieces in today's world should be more decentralized, and an obvious target is "money."

And that's where many point to Bitcoin. Jerry Brito has a nice writeup on Bitcoin about how it's a decentralized digital currency that is growing in popularity, and, in theory can resist attacks and problems of previous attempts at various digital currencies, while providing significant anonymity. Tim Lee quickly responded with skepticism about whether or not Bitcoin can really work, looking both at the demand side of the question and the supply side. I'm not sure Lee's specific arguments are entirely accurate, but I think his general arguments may be.

This doesn't mean Bitcoin (or something like it) can't be successful. It's just that it has an uphill battle. I think it's already useful in certain areas, but that's a big step away from getting to where it really needs to be to succeed in the long run -- and those steps can be much bigger than most people imagine. However, I could certainly envision scenarios that lead to rapid Bitcoin (or similar offering) adoption. I just wonder how sustainable it would really be vs. how much would just be a fad. In the end, I have to admit that I'm torn on this one. While I appreciate the concept of Bitcoin, and think that it might be nice if something like it was really popular, I do wonder if it really has the legs to reach such a level of success. One thing I do know for sure, however: I'd certainly like to hear the folks at Planet Money examine Bitcoin and how it plays into their sporadic explorations of money itself.

Filed Under: bitcoin, currency, economics, money