Ripple Labs raised a US$28 million series A funding round, Ross Ulbricht's defense urges judge in Silk Road case to consider the dark market’s potential for harm reduction, and more top stories for May 19.

Ripple Labs Raises US$28m from Chicago Mercantile Exchange and Seagate

Ripple Labs, the creator of the international payment network and digital currency Ripple (XRP), has raised a US$28 million series A funding round. The funding round featured many strategic investors including the venture arm of Chicago Mercantile Exchange & Chicago Board of Trade, one of the largest security and future exchange operators in the United States. Other notable investors in the round are Chinese venture capital firm IDG Capital Partners and the global data storage company Seagate Technology.

Ripple Labs CEO and co-founder Chris Larsen stated:

“Financial institutions, market makers and corporations are laying the foundation for this Internet of Value, contributing and providing liquidity for global payments. With investors like CME Group and Seagate joining the fold, we’re well positioned to accelerate adoption amongst these key customers.”

Ulbricht Defense Argues Silk Road Made Drug Use Safer

In a memo to judge Katherine Forrest ahead of Ross Ulbricht's sentencing, the Silk Road leader's defense has asked her to consider the dark market's potential for harm reduction when she determines Ulbricht’s sentence in less than two weeks.

Ulbricht’s lead defense attorney Joshua Dratel wrote:

“In contrast to the government’s portrayal of the Silk Road web site as a more dangerous version of a traditional drug marketplace, in fact the Silk Road web site was in many respects the most responsible such marketplace in history, and consciously and deliberately included recognized harm reduction measures, including access to physician counseling. In addition, transactions on the Silk Road web site were significantly safer than traditional illegal drug purchases, and included quality control and accountability features that made purchasers substantially safer than they were when purchasing drugs in a conventional manner.”

Ross Ulbricht

Bitcoin Startup 21 Unveils Product Plan

21, the world’s best-funded bitcoin startup, has revealed its plans to market a line of chips to embed in consumer devices, allowing smartphones and other Internet-connected gadgets to continuously mine bitcoin. Co-founder Balaji Srinivasan outlined various applications for 21’s embeddable mining chip, mostly aimed at what it sees as future industrial uses of bitcoin rather than treating mining as a means simply to get rich.

He also announced that he is taking over from Matthew Pauker as chief executive and that 21’s board will now include Ben Horowitz, the founding partner at Andreessen Horowitz, where Mr. Srinivasan is also a partner.

Bitcoin Startup 21 Unveils Product Plan

US$80,000 Worth of Bitcoin Seized in International Dark Web Crackdown

United States Homeland Security Investigations (HSI), the Australian Federal Police and the Australian Customs and Border Protection Service have seized US$80,000 in bitcoin as part of an international undercover investigation that tracked the illegal selling of firearms on a dark market. Four people across Australia have been charged with attempting to buy illegal firearms while a further 17 arrests have been made across Europe and North America.

HSI acting special agent Kevin Kelly warned:

“Anyone who mistakenly thinks that they can get away with these types of crimes by hiding in the endless depths of the Internet must know that HSI will seek them out and bring them to justice.”

Yellow Launches Bitcoin Voucher Service in Egypt

Bitcoin payments startup Yellow has launched a bitcoin voucher service in Egypt, as an alternative solution for costly and inconvenient payment platforms in the Middle East. Yellow’s founder David El Achkar believes that Bitcoin can revolutionize payments in the region.

El Achkar:

“We’re seeing some activity in Kuwait, but it’s still low. We’re also starting to see a growing interest in KSA, Tunisia, and Egypt.”

Yellow Launches Bitcoin Voucher Service in Egypt

Bitcoin Shop Invests $1.5m in Spondoolies-Tech

Bitcoin Shop has invested US$1.5 million in the Bitcoin mining hardware manufacturer Spondoolies-Tech. Under the finalized terms, Bitcoin Shop bought a 6.6 percent equity stake in the transaction verification server manufacturer. The combination of the companies will procreate the world’s first publicly traded company involved in the production of Bitcoin transaction verification equipment and providing Bitcoin mining solutions.

Bitcoin Shop’s Chairman and CEO Charles Allen said:

“This is a powerful merger as the technologies of the two companies are clearly very complementary and stand to produce immense revenue growth while delivering value to customers, shareholders, and employees.”

IRS Fraud Victim Refunded Seized US$107K

A North Carolina convenience store owner whose entire savings were mistakenly seized by the US Internal Revenue Service in July 2014 has finally won the right for the US$107,000 to be repaid to him. Following a series of legal proceedings costing the claimant over US$20,000, the government finally announced it would no longer pursue the alleged fraudulent activity known as structuring, which resulted in McLellan’s operating profits being taken from his bank account.

Robert Johnson, the claimant's lawyer, said:

“We’re thrilled that the government has recognized that what they were doing to Lyndon was wrong and that they’ve dropped the attempt to forfeit Lyndon’s money […]. This case was a mistake and unconstitutional from the start, and we’re just glad the government has recognized that.”

IRS Fraud Victim Refunded Seized US$107K

BitPesa Bitcoin Remittance Service Expands to Tanzania

African Bitcoin remittance service BitPesa has expanded services to Tanzania. By utilizing Bitcoin for transfers of money, BitPesa is able to offer competitive rates against those offered by Western Union. Transactions may now be sent or received in Kenya and Tanzania from anywhere in the world.

NEM Technical Reference Introduces Reputation-Enhanced ‘Proof-of-Importance’

One and a half months after launch, the New Economy Movement (NEM), has open-sourced its project and released the technical reference. The 54-page paper outlines the technical aspects of the cryptocurrency and theoretically explains the core concept of the technology known as proof-of-importance, a reputation-based enhancement to proof-of-stake.

The technical reference indicates the benefits of this sort of reputation system:

“Having a reputation system for nodes allows nodes to select their communication partner according to the trust values for other nodes. This should also help balance the load of the network because the selection of the communication partner only depends on a node’s honesty but not its importance.”

NEM Technical Reference Introduces Reputation-Enhanced ‘Proof-of-Importance’

Hackers Attack Hong Kong Banks, Demand BTC Payments

In another hacking incident putting Bitcoin in a negative light, a group of banks in Hong Kong suffered a DDoS (distributed denial of service) attack and are being extorted for bitcoin payouts in exchange. The Bank of China and the Bank of East Asia reported this incident to the Hong Kong authorities who are already conducting investigations on the matter.