Geek turned Bitcoin baron tracks cryptocurrency's rise and fall

TOKYO -- Once described as a geek who stuffed himself with snacks in front of his computer, Mark Karpeles rose to head a firm that once claimed to handle 80 percent of the world's bitcoin transactions.

But his lavish Tokyo lifestyle came to an abrupt end when prosecutors charged him with creaming off millions of dollars of customer deposits from his cryptocurrency exchange MtGox.

In many ways, the trajectory of the Frenchman, now 33, mirrors the volatile rise and fall of the bitcoin currency itself.

According to his mother, he had few friends at school, as he was "unable to find a buddy who could talk like he could about IT and quantum physics".

The "only thing that interested" her "talented" son was computer science, according to his mother, speaking in a 2017 documentary.

Karpeles, whose real first name is Robert, himself admitted to French television that he would spend entire days in front of the computer screen without the slightest bit of physical activity. 

Entering the professional world, he quickly found himself at odds with his French company Linux Cyberjoueurs, which found irregularities in its data and pointed the finger at Karpeles. 

The firm brought the case to the authorities and in 2010, he received a year's suspended sentence in absentia in France for "fraudulent access of an automated data processing system" and "fraudulent altering of data".

But by this time, Karpeles was in Japan, which he had visited several years previously and found the people and culture to his liking.

Once in Japan, he founded his own company, called Tibanne -- after his cat.

'MAGIC'

But his life really changed the day a customer asked if he could pay in bitcoin -- a new virtual currency that was just taking its own baby steps.

The virtual currency appealed to the computer whiz and he began to delve into the technical and IT aspects of the new trend.

By 2011, he had bought his own cryptocurrency exchange MtGox, which stands for "Magic: The Gathering Online eXchange" -- referring to a "magic" card-swapping platform beloved by Japanese "otaku" or "geeks".

This grew rapidly until, at the height of its powers, it claimed to control 80 percent of all global bitcoin transactions.

"He was excited by the money that could be generated on this exchange market," one of his associates told a television documentary under the cover of anonymity.

And Karpeles enjoyed the trappings -- reportedly lodging in an $11,000-per-month luxury pad with a king-sized bed worth tens of thousands of dollars.

He married a Japanese woman and became a father but everything came crashing down in 2014, when MtGox suffered what Karpeles said was a "massive" hack attack and lost around 850,000 bitcoins, worth just under half a billion dollars at that time.

MtGox collapsed and filed for bankruptcy protection. Prosecutors are not pursuing Karpeles for that but for allegedly falsifying data and pilfering around $3 million from customers' accounts.

He had tried to take the traditional path of bowing deeply and apologizing profusely -- in Japanese -- for the losses.

But this earned him only mockery online and did not deter the authorities.

He was arrested in August 2015 and spent a year in Japanese detention after being re-arrested several times, as is possible under the legal system in Japan. 

When he was finally released on bail, he had lost a huge amount of weight and at his first high-profile hearing offered up a clean-cut image.

Since then, Karpeles has been active on social media but has largely avoided commenting on his case in detail as he awaits the court's verdict, which is expected on Friday.

source: news.abs-cbn.com

Swiss raid HSBC in money laundering probe

GENEVA - Swiss authorities on Wednesday raided British banking giant HSBC's Swiss unit as part of a money laundering probe into the bank that has been accused of helping clients to dodge millions of dollars in taxes.

The investigation comes just days after HSBC Switzerland became the centre of a global scandal following the publication of secret documents claiming it assisted many of its wealthy clients in thwarting the taxman.

"A search is currently under way in the bank's offices," Geneva's top prosecutors said in a statement.

The search and money laundering investigation was launched "following the recent revelations related to HSBC Private Bank (Switzerland)," they added.

The cache of files, made public in the so-called SwissLeaks case, claimed HSBC's Swiss private banking arm helped clients in more than 200 countries evade taxes on accounts containing $119 billion (104 billion euros).

The files provided details on over 100,000 HSBC clients, including people targeted by US sanctions, suspected arms dealers and drug traffickers.

A wide range of celebrities, politicians and business leaders were also named, although their inclusion does not necessarily imply wrongdoing.

The documents, originally stolen by former HSBC IT worker Herve Falciani in 2007, alleged that billions of dollars transited through the bank as customers from around the world tried to dodge taxes in their home countries or laundered dodgy proceeds through offshore shell corporations.

Falciani told Swiss television RTS late Wednesday that he was ready to help the Swiss authorities in their investigation against HSBC in return for "safe passage."

The Swiss have charged him with data theft.

He said he would cooperate with the Swiss in the same way he has with the Spanish authorities by sharing information through the "cloud."

Risks five years prison

Following the raid, HSBC Switzerland said: "We have cooperated continuously with the Swiss authorities since first becoming aware of the data theft in 2008 and we continue to cooperate."

According to Swiss law, a bank can be held responsible for "aggravated money laundering" if it does not take all the necessary measures to ensure such infractions do not take place within its institution.

The prosecutor general Olivier Jornot in the Geneva canton and another top prosecutor, Yves Bertossa, were heading the HSBC investigations.

They said the probe initially only targeted the bank itself, but warned that "depending on the evolution, the investigation might be broadened to include physical persons suspected of committing or participating in acts of money laundering".

Anyone found guilty of such crimes could face up to five years behind bars as well as large fines.

Following the SwissLeaks revelations more than a week ago, HSBC's Swiss banking arm insisted it has undergone a "radical transformation" since the period referred to in the files.

HSBC now has "strong compliance controls in place", Franco Morra, the head of HSBC's Swiss unit, told AFP in an email, adding that the revelations are "a reminder that the old business model of Swiss private banking is no longer acceptable".

The SwissLeaks documents were obtained by French newspaper Le Monde and shared via the International Consortium of Investigative Journalists with more than 45 media organisations worldwide.

As soon as the documents were made public on February 9, calls arose for a Swiss probe against HSBC Switzerland, which is already facing prosecution in the United States, France, Argentina, Spain and Belgium.

Switzerland had so far only launched an investigation against Falciani.

Falciani himself said last week that the media reports on the documents' contents were based on just a fraction of the files he handed over to French authorities.

"This is only the tip of the iceberg," the 43-year-old Franco-Italian told France's Le Parisien newspaper.

Falciani remains wanted on data theft charges, but France and Spain have offered him protection by refusing to extradite him to Switzerland.

The SwissLeaks files have already been used by the French government to track down tax evaders and were shared with other states in 2010, leading to a series of prosecutions.

In London, chief political commentator Peter Oborne announced his resignation from the Daily Telegraph as he accused the broadsheet of suppressing negative stories about HSBC to keep the valuable advertiser happy.

The Telegraph denied the accusations.

source: www.abs-cbnnews.com

The Risk Principle of Investment

Risk is inherent in investment. But if you are unwilling to assume a certain level of risk, you will most assuredly lose wealth. This is the reality of buying power as it relates to inflation. As a nation’s currency is inflated, individual dollars are worth less over time. So that $10,000 you have sewed into your mattress won’t get you the same amount of stuff in 10 years that it does today. This is why people invest, to protect and increase the buying power of their hard won dough. But there is always the chance you could lose some, or all, too.

So investors accept certain levels of risk. Every form of investment carries with it a level of risk, but these vary widely from form to form. Some investments pay off very little, but have almost no risk of losing value. Others are more likely to lose value than not, but bear the possibility of bringing in huge winnings. We’ll say that on the one hand you’ve got money sewn into a mattress and on the other hand buying a lottery ticket. I don’t recommend either approach, so an investor needs to make his or her life somewhere in the middle. Here are different degrees of risk found in various forms of investment. The wise investor will create a portfolio that is some combination of all levels of this spectrum.

Risk Level 1: Bonds – The US government has never defaulted on bonds in its history, making them one of the most secure forms of investment around. Because of this, many investors buy up more and more bonds as they age, to make sure that they don’t lose a boatload in a sudden stock market crash, just before or during retirement. Bonds bring in returns at roughly 4% a year. It’s nothing you’ll get rich on, but if you already have money, it’s a great way to preserve its value and even increase it somewhat, without bearing the risk of catastrophic loss. Again though: low risk, low reward.

Risk Level 2: Stocks – The stock market is a tricky game. The closer you zoom in to individual stock behaviors, the harder it is to come out on top. Individual stocks whizz around like mosquitoes. They may have an overall trajectory, but moment by moment, or even year by year, it’s very hard to know what they are going to do. Some stock pickers are great at this, bringing in annual returns in the 10’s and 20’s, or higher, year after year. But these are in the minority. Most active stock managers fail to beat the market, which rises on its own about 9% a year, on average (there are many down years). An index mutual fund latches onto dozens of stocks all over the market to leverage the overall growth of the market.

Risk Level 3: Stocks/Day Trading – This is the way people get rich quick (and the alternative). Remember how I said that stocks jump around a lot? Day traders make short wagers on this behavior, taking home bundles for insight and paying dearly for mistakes. This system has been digitized in the form of spread betting, where investors win based on their correct prediction of stock growth or loss, and the amount the market goes in their chosen direction. Many bets can be made a day, so the potential for growth and loss is enormous.

The savvy investor will accept judicious amounts of each of these risk levels. By putting all your money into level one, you’d never make a thing. All level 2, you’d have to settle for very gradual growth, without any guarantees that it would be there when you most need it. All level 3, and you stand a good chance of losing it all, or will at least have a mercurial existence. Talk to your finance professional about how much risk you should include in your portfolio.

source: 20smoney.com

The new US $100 bill

WASHINGTON - The United States launches on Tuesday a new $100 bill that comes with, for the iconic greenback, a new touch of color, as well as special features to foil counterfeiters.

In its first remake since 1969, the $100 banknote, which takes a key role in cash transactions worldwide, sports the traditional portrait of statesman Benjamin Franklin, a leader of the American Revolution, on the front and a picture of Philadelphia's Independence Hall on the back.

But it adds a yellowish "100" in one corner and, next to Franklin, a tan quill and bronze-colored inkwell that holds inside it the Philadelphia Liberty Bell in changing colors from darker brown to green, depending on the angle the note is held.

Cutting vertically through the middle of the banknote is a blue security ribbon that shows "100" and smaller Liberty Bells in darker blue, which appear to move as the note is shifted.

The new design comes primarily to fight the increasing sophistication of counterfeiters, Sonja Danburg, program manager in charge of currency education at the Federal Reserve, told AFP.

"It's our most global bank note. Between a half and two-thirds of them are circulating outside of the United States, and it's also the most counterfeited of US denominations outside of the United States," she said.

"We want to stay ahead of counterfeiting threats, we want to protect the public."

The new note hits the streets in the United States on Tuesday, and it will take some days before banks ship them to branches and counterparts around the world.

With some $900 billion of them still out on the market, and mostly abroad, Danburg stressed, the old $100 note will continue to be honored, with no time limit.

source: www.abs-cbnnews.com

Taiwan man detained in Sesame Street doll scam

TAIPEI -- A Taiwanese man was taken into custody for allegedly swindling millions of Taiwan dollars by selling Sesame Street dolls and other items which he claimed had "magic powers," police said Friday.

The suspect, identified by his surname Lin, was accused of conning some Tw$3 million ($100,000) from a businessman with products including an Elmo doll, a Sesame Street muppet, which he said was "holy" and could bring luck, they said.

The man, who claimed Lin also asked him to "buy property in the underworld," later contacted the police after he realised he had been scammed.

Lin was also suspected of selling the dolls to other victims for up to Tw$1 million apiece, as well as touting a variety of products for their alleged healing effects.

Police said they will continue to investigate Lin, a temple keeper in northern Taoyuan county, after they found documents with information on a large number of "followers" from the past several years at his home and temple.

source: interaksyon.com