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BitBlotter: The Winklevoss Bitcoin ETF Will List on Nasdaq; PACs Can Legally Accept Bitcoins

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Bitcoin's price remained below $450 over the course of the week.

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Whether you're a Bitcoin fanatic or just beginning to familiarize yourself with the emerging commodity, BitBlotter gives you a weekly snapshot of all things digital currency.

There was a slew of regulatory news around Bitcoin in the United States this week, while in China more banks froze accounts tied to Bitcoin businesses. Meanwhile, a deal to purchase the defunct Bitcoin exchange Mt. Gox seems to be coming together, and an argument to chop up bitcoins into "bits" gained ground.

The Winklevoss twins will list their Bitcoin fund on Nasdaq. Cameron and Tyler, famous for their legal battles with Facebook (NASDAQ:FB) cofounder Mark Zuckerberg, stated this much in a regulatory filing, The New York Times reports. The brothers applied to create an exchange-traded fund called the Winklevoss Bitcoin Trust in June 2013. They aim to provide investors with an easy way to speculate on the price of Bitcoin and see it functioning like a gold ETF. The brothers launched the Winkdex, their own Bitcoin price index, in February, which will be incorporated in their proposed ETF. Wedbush's Gil Luria told The New York Times that the fact the SEC has allowed the filing to progress this far signals the ETF might actually happen.

Two more banks in China have shut down Bitcoin trading accounts. China Guangfa Bank and Shanghai Pudong Development will no longer allow customers to trade bitcoins using their accounts. The moves follow a meeting held by the People's Bank of China this week, during which the PBOC, according to The Wall Street Journal, urged senior executives from China's major banks to distance themselves from Bitcoin-related businesses. The PBOC also instructed the banks to monitor accounts being used to conduct Bitcoin-related trades, threatening public censure for banks that don't comply. At a similar meeting held April 24, the PBOC rebuked several banks for not enacting tougher restrictions around Bitcoin.

BitPay is turning bitcoins into "bits." The Atlanta-based company, which is a leading provider of Bitcoin payment-processing software for merchants, plans to begin displaying and recording bitcoin values in smaller denominations called micro-bitcoins, or just "bits" for short. One million bits equal one bitcoin, which means that instead of paying 0.004559 bitcoins for a soda, you'd pay 4,559 bits. BitPay's core developer, Jeff Garzik, explains on the company's blog that this reformatting makes Bitcoin's integration into existing financial software much easier. Garzik also argues that people are less familiar with pricing that extends beyond two decimal points -- most people never deal with fractions of a cent in everyday transactions. Arguments over switching to micro-bitcoins have been popular in the Bitcoin community for a few years.

The Bitcoin Foundation's two new board members will be revealed tomorrow. The nonprofit organization that manages and updates the code behind Bitcoin failed to fill two vacant seats on its board last week when none of the candidates acquired the needed 52 votes to be elected. A runoff election is being held today between the three leading candidates of the total 15 initially nominated, CoinDesk reports. These three include BTC China CEO Bobby Lee, Gyft CEO Vinny Lingham, and active Bitcoin entrepreneur Brock Pierce. The winners will fill positions formerly occupied by Mt. Gox CEO Mark Karpeles, who resigned after the Bitcoin community began a petition to remove him, and Charlie Shrem, who resigned after his arrest for allegedly using bitcoins to facilitate money laundering.

The Federal Election Commission said PACs can accept bitcoin donations. But those bitcoins must be converted into US dollars before being deposited into official campaign accounts, reports The Washington Post. The decision, announced yesterday, capped a busy seven days of reactions from the US government toward Bitcoin. Notably, the Securities and Exchange Commission issued an official letter on Wednesday that warned investors against the risks of Bitcoin, underscoring the potential for fraud and high-risk investment opportunity. Meanwhile, the Combating Terrorism Technical Support Office, which is a division of the Department of Defense, closed submissions last Friday to a program to help the military understand state-of-the-art technologies, including Bitcoin and other virtual currencies, that could pose a threat to national security, reports Fox News. Last but not least, the state of Ohio banned the purchase of alcohol using bitcoins, according to Wired.

Former child star Brock Pierce is trying to buy Mt. Gox for one bitcoin. Businessweek published a piece on Pierce -- known for his role in the Disney (NYSE:DIS) film The Mighty Ducks -- and his partners at Sunlot Holdings, who've been trying to acquire a part of the company since January. Karpeles refused to sell them a share of the exchange. But following Mt. Gox's declaration of bankruptcy, Sunlot approached the judge overseeing a class action lawsuit against Mt. Gox in Illinois and made the single bitcoin offer. Sunlot's plan would be to redistribute Mt. Gox's existing assets to customers, keeping 10% of what it covers. Mt. Gox account holders would also receive a 16.5% stake in the exchange, which would be completely rebuilt from scratch. Only the name Mt. Gox would remain. According to CoinDesk, an Illinois judge has granted Sunlot initial approval for the scheme. Now it needs an OK from Japanese authorities to move forward with the deal.

Bitcoin's price breached the $450 level at the end of last week. It quickly slipped beneath it and has yet to break higher.

Source: bitcoincharts.com

Twitter: @brokawbrokaw
The author owns some Bitcoin.
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