Physical bitcoins arrive in UK

Source: TGBEX

TGBEX Limited, which claims to be the world's first and only producer of high quality physical bitcoins was pleased today to announce its launch in the United Kingdom.

Co-Founder, Adrian Forbes said "We are excited to launch in the UK and hope to organise a number of launch parties and promotional events in various cities around the UK over the coming months".

"We have seen interest in the coins from people aged 18 to people over 60 and have been overwhelmed by the response and interest so far, so hope to build on this".

TGBEX produce limited edition, physical bitcoins that are individually numbered and come with a Certificate of Authenticity with a QR code, corresponding to the public address applied to the back, enabling owners to ‘verify' the bitcoin balance, plus an ‘About Your Bitcoin' booklet explaining how to check and use the physical bitcoins.

John Middleton, Co-Founder explained more "Our coins are produced by generating private keys offline and by engraving the keys onto the coins, which are then secured, loaded with bitcoin and all records of private keys destroyed".

"Security of the bitcoin keys is paramount to our customers, so each coin is engraved via a CAM process to reduce the likelihood of human error and each coin is checked and signed off on the certificate and order form. The whole process is overseen and we have procedures in place to prevent the theft, or loss of private keys".

TGBEX also claim to be ‘the safest and easiest way to invest in bitcoin', when questioned about this, John replied:
"For most people, the idea of multi-factor authentication and having to remember, or store extra passwords is off-putting and so is the idea of leaving bitcoins in the ownership of an exchange. We believe we are the easiest way for most people to buy bitcoins and as long as the coin is kept safe, the bitcoins remain in cold storage, so it is a safer option for more than 90% of people."

TGBEX coins come in denominations of 0.5BTC, 1BTC, 2BTC and 5BTC, made from brass alloys with various finishes, together with a branded velvet box. 10BTC and 20BTC coins are made from solid silver (hallmarked by the Birmingham Assay office) and come in a handmade box, with a plaque insert reading "GENESIS EDITION" (also imprinted on the front of each coin).

TGBEX engrave public and private keys onto the obverse of the coins, with the private key covered by a holographic security sticker in an undisclosed location, but they can be contacted via their website or found on facebook, twitter and linkedin.

Based in the Isle of Man, TGBEX has had to deal with a complex-web of legal and compliance issues, but have the experience to deal with regulations and expansion:

"I had some previous experience putting together legal, compliance, AML/KYC, payments, fiduciary and custody solutions, which came in useful" explained Adrian, who was previously Citibank's Head of Operations for Private Equity Services, covering Europe, the Middle East and Africa.

"We think physical bitcoins have the potential to increase adoption, but they need to be taken seriously and not just produced in a bedroom, or garage. John is a huge fellow crypto-enthusiast and his experience of software development and systems, as well holding senior posts in the Isle of Man financial sector was also instrumental in being able to create the procedures and systems necessary."

"The Isle of Man is an ideal location for what are complex problems, the Government, public response and local professional partners have all been a huge help in launching TGBEX over the past few months. The ability to have a chat (and a coffee!) with the data protection department, or meet the FSC at a week's notice, just wouldn't be possible anywhere else"

John Middleton is both a committee member of the MDCA (Manx Digital Currency Association) and the Isle of Man Branch of the Institute of Chartered Secretaries & Administrators (ICSA.) John is professionally qualified as a chartered secretary and a director of Isle of Man Fiduciary Freeport Trust Company and CEO of Garigus Limited, the first company in the world with shares funded in bitcoin), together with Adrian. Adrian was reluctant to disclose too much around future plans to launch beyond the UK:

"We hope to use our experience, together with assistance from our partners to launch across the world, but need to perform an analysis of what local regulations apply in each country we hope to sell in first, so are focussed on launching in the UK for the time being".

Comments: (2)

A Finextra member
A Finextra member 27 October, 2014, 09:23Be the first to give this comment the thumbs up 0 likes

How different are these from the medallions of the England 1970 World Cup squad you got free from Esso with 4 gallons of 4-star?

Securely, extravagantly numbered bits of brass, or of silver if you buy the expensive ones, in a velvet case. At least the silver ones have a value - their weight in silver. The brass ones are literally valueless. Why should they ever have a value, that is after the punter has paid out whatever price is put on them in real money?

You don't even get an image of Peter Bonetti to help you remember the quarter final.

What happens to the money paid in - I mean the real money? Do the sponsors just take it out and spend it? There is no doubt that with all that security and a proper certificate, you definitely own the coin and the claim on whatever it represents, but what does it represent?

These tokens are very different from the £5 commemorative coins issued for Kate & Will's wedding - that is legal tender, issued by the Bank of England.

Has the Bank of England anything to say about a company launching a rival physical note&coin to its own in the UK?

I cannot believe that this can be offered as an "investment" to UK residents, even from somewhere like the Isle of Man. This looks like an Icesave model, except that was with a proper bank (albeit a dud one) and the funds were invested in businesses (albeit failing ones). Do the Isle of Man authorities want thier environment to risk getting classed as the new Iceland?

What assets are the proceeds invested in here such that the value of a partial claim on the asset portfolio might result in the price of the bitcoin rising? What is the credit rating? Where is the liquidity? Where is the ombudsman? Is this a Limited Network within the meaning of Payment Services Directive? Are we looking at a form of Green Shield Stamps? What is the VAT treatment? What is the Capital Gains Tax treatment? Are these 'goods' or 'money'? Who accepts these in payment and at what value? Even the kind of investment that is advertised on page 27 of the Sunday Times colour supp alongside the devices to get you in and out of the bath has to state what regulation regime it sits within.

The precious piece is the statement that they "need to perform an analysis of what local regulations apply in each country we hope to sell in first, so are focussed on launching in the UK for the time being".

So there are no local regulations here in the UK on trying to tout brass ovals as an investment? Has the Financial Conduct Authority anything to say about? HMRC? The Financial Ombudsman? Inland Revenue?

Here are two quotations from a warning brochure I received on Saturday from the FCA:

"Watch out for these common features: transfers of your money or investments overseas, meaning the money is harder to recover"

"Make sure the adviser is authorised by the FCA at"

I'll stick to my medallions, I think, and investments in real investments.

A Finextra member
A Finextra member 13 November, 2014, 03:56Be the first to give this comment the thumbs up 0 likes

I imagine if you had invested in the 1970 medallions they would now be worth more than a 50p coin which at the time was the highest value fiat coin?

If you read website, TGBEX make it explicitly clear they do not offer investment advice. 

Physical bitcoins are intended to store bitcoins until a point in time where the owner chooses to redeem and use. They are not intended for tender.

If you have a look on bloomberg you will see a market price there, but what do they know?!

Stick to you 'real' investments, good luck beating inflation and outmanoevering hedge funds, investment banks etc!

Remember the people who said the internet would never be of any use and mobiles would never take off.....