December 2013 – Company Update

Dear Investors,

Happy New Year, and welcome to the fifth edition of the Independent Reserve newsletter.

What a year it was for Bitcoin!  It’s worth recapping some of last years’ highlights as there are a lot of new people who have joined us for the first time this year.

2013 was the year Bitcoin went mainstream, here’s what happened:

• Early 2013: The Winklevoss twins (of Facebook fame) invest $11m into a new Bitcoin fund.
• March 2013: An unusual catalyst in the form of the Cypriot Financial Crisis,  triggered the first massive price rise in Bitcoin, springing the digital currency from $10 to $250 in a matter of weeks, and for the first time grabbing the attention of the world’s mainstream media.
• August 2013: A United States court ruled Bitcoin to be legal tender.
• August 2013: The German government legitimises Bitcoin, declaring digital currencies to be a unit of account.
• September 2013: The infamous Silk Road website, using Bitcoins to trade illegal merchandise was shut down by the FBI in the United States. Rather than cause a market collapse as sceptics had predicted, the value of Bitcoin skyrocketed as it was evident the majority of transactions were legitimate and Silk Road was a relatively small player in the Bitcoin economy.
• September 2013: Merrill Lynch called Bitcoin a potential “major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers”
• November 2013: Head of US Federal Reserve, Ben Bernanke publically declared that Bitcoin “may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system”
• November 2013: A United States Senate hearing on Bitcoin strongly weighed in favour of digital currencies, with the Financial Crimes Enforcement Network declaring Bitcoin to be innovative, useful and cautioned that premature regulation could stifle Bitcoin innovation.  They also pointed out to detractors that any illegitimate use of Bitcoin was insignificant compared with the USD 1.6 trillion in “global criminal proceeds” in 1999.
• November 2013: Billionaire entrepreneur Sir Richard Branson announced on CNBC that his commercial space flight venture will accept Bitcoin as payment.  He called it “a new exciting currency”.  It has already accepted its first payment worth approximately USD 250,000.
• November 2013: Bitcoin ATMs first appear in Canada, then later in the United States and more recently Australia.
• December 2013: One of Elon Musk’s (PayPal, SpaceX, Tesla, SolarCity) Tesla Model S cars was sold in the US for the first time using Bitcoin.  The value was approximately USD 103,000.
• 2014 begins with Bitcoin now regularly trading at over USD 1,000.
• January 2014: Singapore government pro-actively set out tax regulation for digital currencies such as Bitcoin.
• January 2014: South Korean government sponsor local digital currency exchange.
• January 2014: Finland have officially recognised Bitcoin as a commodity.

It’s fair to say that this is an exciting time for Bitcoin…

2014 is panning out to be even bigger. This will be the year in which Bitcoin continues its path to maturity, with new innovations and a more stable regulatory environment making Bitcoin more accessible to the masses.

Independent Reserve are in the thick of it. We are currently 80% complete in building what will be the best Bitcoin exchange in the marketplace, and are just a couple of months away from our April  launch.

We have secured partnerships with all of the key partners and vendors needed for launch, and we have worked to build a strong executive team, with a broad skillset in the fields of Technology and Finance.

Our first round of capital raising is now well behind us, but we continue to seek out strategic and equity partners to make Independent Reserve the most successful exchange in Australia, and the world.

If you’re just idly curious or unsure about Bitcoin, drop me an email and I’ll be happy to share with you some more details of what we’re doing.

Our Information Memorandum available for download on our website.

A small number shares remain unallocated in Round 2.  If you were considering a Round 2 investment, please contact eitherAdam Tepper, Lasanka Perera or myself .

Kind Regards,

Adrian Przelozny
Chief Technical Officer