These people have monies. (Photo: Wealthfront)

You work hard for that six-figure salary. Heads down and standing desk up, evening coding sessions bleed into all-nighters with the ease of a mouse click. So when it comes time to hand over some of that hard-earned cash to the government for taxes, it's understandable that you'd be a little ruffled. "Why can't I find tax loopholes like that guy Mitt Romney?" you might wonder angrily as you zip down the 101 in your company-leased BMW. "Life is just not fair."

Luckily, a startup called Wealthfront is here to ease all your wealthy person woes. Wealthfront targets fresh-faced tech workers with six-figure bank balances and uses algorithms to help manage their money. Wired reports that the company announced today that it has developed an automated service that can help budget-conscious tech workers legally skimp on their taxes. Hey, didn't you see a post on Hacker News about hacking the tax code?

The new service allows clients with more than $100,000 in their portfolios to partake in "tax-loss harvesting," which can save them a bundle of dough. Wired explains:

"Say you own shares in two mutual funds. One goes up, and you sell for a profit, which in tax terms is considered a capital gain. Meanwhile, the other fund goes down. So you sell that too...

...When you sell the tanking mutual fund shares for a loss, you can write that off against the gain you made selling the other shares. At the same time, you can take the remaining proceeds from the shares you sold at a loss, then turn around and reinvest them in a different fund of comparable value. In essence, you’ve sold shares for a loss but still own the shares. You’ve 'harvested' your loss, but you haven’t lost your crop."

If the financial jargon hasn't caused you to nod off, then congrats--by enrolling with Wealthfront's tax-harvesting service, the company says you'll be able to increase after-tax returns by 1 percent/year.

That may sound laughably small to 47 percenters, but when you're building your golden nest, every little bit counts.

(Photo: Facebook)

Nathan Hecht figures there were about 200 early adopters and potential investors in the room at Northside Festival when he demo'ed Kurrenci, a new digital money—"with a 'k' and an 'i,' as the perky demo video explains—that can be bought with a credit card, unused gift card or cash, and eventually, its creators hope, with airline miles and credit card rewards points.

Rather than taking on PayPal, Kurrenci is building a marketplace where vendors can promote themselves within the Kurrenci community or by using discounts in the form of exchange rates, which are set individually by each store.

By default, Kurrenci is pegged 1:1 to the dollar. Merchants can tweak this exchange rate—setting Kurrenci to, say, 1.20 Kurrenci to the dollar, in order to offer customers a generous albeit confusing discount. An item that would have cost you $5 now costs you $4.16. If a merchant bumps up the exchange rate in order to give a discount, Kurrenci takes a cut of the difference. Here's a video to help explain the idea TechCrunch called "so out there that it's hard to even explain clearly without sounding like a crazy person."

Right now the platform works for donations and peer-to-peer payments, with group gifting and micropayments on the roadmap. The technology has been a year in the making and Kurrenci has signed up 35 merchants so far in its "soft beta," Mr. Hecht said. It already has 15 employees and is looking to grow.

Kurrenci is "way more disruptive than Dwolla" and is in a "totally different category" than Bitcoin, Mr. Hecht said. Although there are "similarities" between Kurrenci and other payment systems, he said, "we don't know of any direct competition at the moment" because Kurrenci is a customer acquisition platform.

The company's employees are divided into technology, business development, sales and regulatory compliance, and Kurrenci is hiring for more sales and marketing positions as well as engineers.

Welcome, welcome. (flickr.com/ajleon)

New York-based office sharing startup Loosecubes has raised a $7.8 million Series A led by New Enterprise Associates and Revolution Ventures. Including funds from an August 2012 seed round with Accel Partners and Battery Ventures, that brings the company's total raised to $9 million.

Besides the funding, the company is also launching booking with real-time availability, and the company's newly optimized mobile site will now show users nearby available spaces. As we are perpetually planless, we can imagine coming in handy. To celebrate, members can rent any of Loosecubes' spaces for free for the rest of June.

Said founder and CEO Campbell McKellar in a statement:

When we started two years ago, I was a remote worker in need of a convenient, productive place to work. There are now over 1,000 Loosecubes available in 236 cities available for real-time, instant booking, and they’re all free for the month of June.... I’m excited to foster productive coworking using our beautiful new mobile site. Our hosts have more ability than ever to control their experience using our sharp new privacy controls.

Besides the cash, board members now include Tige Savage of Revolution Ventures and Alex Kinnier of NEA, and NEA's Greg Papadopoulos is a board observer.

Did you know the Royal Canadian Mint, the agency that produces Canada's money, has been "actively monitoring the evolution of currency and payment technologies for a number of years"? They have! And they've developed their own digital currency, the MintChip.

Apparently the Mint recently diverted some of its research and development funds—who knew mints had these?—into coding MintChip, which uses NFC technology similar to Google Wallet. Today the Mint announced a competition for developers in North America. Build apps with MintChip, which is still in the experimental phase, and you can win $50,000 in gold bullion.

The Mint has prototypes and five patents pending on its technology, says the Mint. The system is designed to work well for microtransactions under $10 and "nano-transactions" under $1. "The Mint hopes that software developers and entrepreneurs will use MintChip to ignite trade and commerce for these very-low-value markets," the Mint says on the website for the competition. The Mint's chief financial officer will give a keynote about MintChip on April 17.

Iowa-based Dwolla is growing by leaps and bounds. Developing world favorite M-Pesa has had revolutionary impact in Africa, serving as a bank for 15 million people. Barclays in the U.K. has introduced a mobile payments called Pingit. And of course, Bitcoin keeps trucking along. Meanwhile, Popmoney, a mobile payments partnership between Moneygram and payment system Fiserv, recently popped up. But this is, as far as we know, the first time a government has sponsored a digital currency.

The MintChip competition is powered by hometown startup ChallengePost and sparked a debate when it was posted to Hacker News with the inflammatory title, "The Royal Canadian Mint just announced a new alternative to BitCoin."

Mr. Kortina. (Twitter)

Venmo, the peer-to-peer payments app startup that moved from Philadelphia to New York over the summer, just made two big back-to-back announcements.

The first is the resolution of a long-running challenge for Venmo. In the past, it was too complicated and time-consuming to get Venmo to interface properly with the banks, so the company gritted its teeth and offered to cover credit card fees for its users. Relying on credit cards was the only way the startup could offer fast and simple money transfers while the team worked slowly and painfully to introduce proper bank transfers, which was "just not an easy thing to do technically," cofounder Andrew Kortina told Betabeat. The strategy was serviceable, but unsustainable.

Now new customers must now make payments from their bank accounts in order to use Venmo for free. Existing customers have until May 1 to switch. Customers can still use a credit card to make payments but Venmo will charge a 3 percent fee.

The second big announcement came yesterday: Venmo, which has been invite-only for more than a year, is opening up to the public. "We want to make it really fun and easy for people to pay with their friends," Mr. Kortina said, although in the future the company may start serving merchants.

The Venmo team is up to 23 "young, passionate people," as Mr. Kortina said, in an office in Chelsea and is processing $10 million in transactions a month. (Investor Ben Lerer predicted the startup will handle $250 million next year.) "It's not really stuff that would be captured somewhere else," he said. "Like if someone's friend had a bachelor party and they couldn't go, they could Venmo $20 to get drinks on them because they couldn't be there. People are using this to share the experience they have when they go out with friends."

In the long run, Mr. Kortina said, Venmo's competitors are Visa and American Express. "We see ourselves as a way to pay for something... we think that by making our product social and fun we're going to build something that people will choose to use over Visa and Amex."

Venmo lets users tweet their payments; see Betabeat's (now broken) "Cutesy Venmo Receipts Are Now a Thing."

Just paid @BaconIsMyCoffee for magazines from Chinatown. wink wink wink wink wink wink wink venmo.com/s/7qjB

— crispylettuce (@crispylettuce) March 19, 2012

Dwolla CEO Ben Milne.

Dwolla has sent over a statement responding to the $2 million lawsuit filed yesterday by the Bitcoin exchange TradeHill. Dwolla says it has not been formally served notice of the lawsuit yet.

First and foremost, it is important to note that neither Dwolla, nor any of its management or investors, have been served formal notice of any potential lawsuits. It is also noteworthy that a party making unfounded allegations would likely notify the media of litigation prior to advising the party that it says caused it harm. That said, if served, we will vigorously defend all allegations of wrongdoing in the traditional venues of the judicial system. What we will not do is provide specific comment on specious allegations made by those who have a self-serving interest in seeking publicity.

In the interests of transparency, we’d like to say a few high-level things: Dwolla has always worked closely with merchants to rightfully identify and protect the victims of identity theft. Every day, thousands of users log thousands of successful and legal transactions in one of the industry’s safest ecosystems. Unfortunately, as is a reality with all financial services (e.g. banks, credit cards, etc.), predators can use stolen identities to create fraudulent accounts without a victim’s knowledge. That’s why Dwolla requires numerous identification and verification steps.

A necessary byproduct of this kind of fraud is bank-level reversals, “chargebacks” issued by the institutions on behalf of the victim, not Dwolla. With that said, we will not play accomplice to sources of ongoing fraud. In such cases, we move quickly and act appropriately to facilitate restitution on behalf of the financial institution and its members (the victims). This is required by federal and state consumer protection laws, but more importantly it’s the right thing to do.

Most all merchants are well aware of the problem, which is why we've always had something in our terms of service about chargebacks since Day One. Notably, there are certain types of businesses and marketplaces that are continued targets for illegal activity and, just like we work hard to protect and improve our community, a similar expectation should be assumed on behalf of merchants participating in high-risk industries. If any merchant continues to be a source of systemic fraud and we cannot come to an agreement, we will always take the appropriate actions.

In the event that a user or merchant feels as though they have been wronged to the point of litigation, we’ll be happy address their concerns or issues in the court of law. It is their right to do so, as it is our right to rationally and reasonably present our side. So while people may throw a bit of mud on us, it's important to let the appropriate parties figure this stuff out. This will allow us to focus on what we do best: Build.

In the meantime, Dwolla continues to be a source for hundreds of thousands of transactions, all safe, legal, and cost-effective. Please, don’t hesitate to drop us a line.

Left, Mr. Kenna, in a Next Web interview; right, Mr. Milne (flickr.com/7878069@N02)

The proprietors of a major Bitcoin exchange have filed a lawsuit in the Northern District of California alleging that racketeering, intentional misrepresentation, false advertising, breach of contract and other violations by payments startup Dwolla have cost them at least $2 million in damages, with the final amount to be decided by the court.

The plaintiff is TradeHill, a Bitcoin currency exchanger based in San Francisco and Chile that was at one time the second-largest processor of Bitcoin currency trades, but which recently shut down. The shutdown was largely due to losses sustained because of "chargebacks" or payments that cleared and then were rescinded by Dwolla, said TradeHill cofounder Jered Kenna, although other reasons were given at the time.

"We've been trying to resolve this for eight, nine months and they ignored all communication," Pierre G. Basmaji, the Santa Monica-based attorney for TradeHill, told Betabeat by phone. "I have no idea why. I think... they don't know how to handle it and were just hoping we would go away."

Dwolla did not respond to requests for comment. UPDATE, 6:13 p.m.: Dwolla just released a statement.

Dwolla is a fast-growing, low-fee e-payments service that has been generating a ton of buzz from its headquarters in Des Moines, Iowa; the startup recently raised $5 million in funding led by Union Square Ventures. Dwolla was popular with Bitcoin exchanges because of its low fees.

TradeHill was one of the exchanges that allowed customers to purchase Bitcoins with Dwolla. But sometime over the summer, the relationship went sour.

According to TradeHill, Dwolla told merchants that transactions were not reversible, meaning money transfers would not be canceled after they had cleared. The practice of reversing transactions, known as "chargebacks," is common among payments processors and unpopular with merchants. (If your wallet is stolen and a thief uses your Visa to buy $1,000 of drinks at the Ace Hotel, for example, you're not liable for those charges: the Ace eats the cost thanks to a chargeback.) "[Dwolla] said all sales were final. Credits were as good as cash," Mr. Kenna said.

In July, TradeHill noticed some discrepancies in its transaction records and wrote a program to track its Dwolla transaction history. After two weeks of tracking, it appeared Dwolla had been clearing transactions and then revoking them. The status of charges on Dwolla's online transaction history would change from "pending" to "credited" and then back to "pending," TradeHill said.

Basically, a customer would connect his or her bank account to Dwolla. Then the customer would head over to TradeHill, fill out an order for, let's say, $100 in Bitcoins, and use Dwolla to pay. TradeHill would look at its records, see that Dwolla had sent $100, and credit the customer with $100 in Bitcoins. But in some cases, according to TradeHill's complaint, that $100 from Dwolla might disappear after the Bitcoins had already been transferred, so TradeHill effectively ended up giving away Bitcoins.

Mr. Kenna said he believed the problem was due to people scamming Dwolla, and was not bad intent on Dwolla's part. "It is unfortunate that Dwolla is the victim of fraud and we would like to work with them to resolve this," TradeHill said at the time. "We are confident that they will do the right thing."

But when TradeHill tried to talk to Dwolla about the problem, the Bitcoin exchange was stonewalled.

TradeHill went public with its story on the made-for-web-TV Bitcoin Show on July 26. TradeHill also wrote about the dispute on its blog, alleging that "Dwolla has been scammed for at least $37,000 by our records and we have prevented an additional $27,000 from being scammed."

TradeHill says Dwolla reacted by removing language on its website that promised customers did not have to worry about "chargeback concerns" and adding a clause to its Terms of Service aimed at Bitcoin:

Any purchase or transaction involving virtual currency or a virtual product is not eligible for a dispute or arbitration. This includes but is not limited to credits, downloads, PDFs, or mp3s.

After TradeHill's public statements, Mr. Kenna said the stonewalling continued. Dwolla executives "refused to be around for the phone calls," he said. "I would get them on the phone and they would say the CEO, COO is going to call you back. Then I'd get an email back that was basically a copy of the FAQ," Mr. Kenna said.

All in all, TradeHill alleges Dwolla unjustifiably reversed $94,878.72. The complaint also alleges Dwolla prevented TradeHill from withdrawing an additional $70,000 from its Dwolla account, because Dwolla told its partner Veridian that TradeHill was a fraudulent business.

The losses snowballed. Cash flow problems due to these losses caused TradeHill to shut down and lose some valuable domains including bitcoin.com, bitcoin.co and bitcoin.co.nz, TradeHill says, for which it had traded $1 million in equity.

TradeHill believes Dwolla is at fault because flaws in the Dwolla system allowed maliciously-intentioned customers to defraud TradeHill, and Dwolla simply passed the cost onto TradeHill via 45 chargebacks in total—and then neglected to notify TradeHill of said chargebacks.

TradeHill's attorney told Betabeat that the $2 million in damages "is conservative." "I'm pretty sure we can prove that much, but it will be proven in court," he said.

UPDATE, 2:20 p.m.: TradeHill just put out a press release announcing the lawsuit.

Based on public statements by Dwolla about the company's transactions, Mr. Kenna believes Bitcoin at one time accounted for a very large percentage of Dwolla's transactions. TradeHill was processing about $1 million in payments and withdrawals through Dwolla in June, he said, before the dispute, and another Bitcoin exchange, Mt. Gox, was doing almost seven times that amount: $6.8 million in deposits and withdrawals in June in 16,640 transactions, the exchange said in July. UPDATE, 4:53 p.m.: Mt. Gox sent more recent numbers to Betabeat that are lower. The exchange did $2,5 million in 9,948 Dwolla transactions in February.

On June 17, Dwolla said it was doing about $1 million in transactions per week, suggesting Bitcoin could have accounted for a majority of the transactions at the time. (Dwolla did not respond to an email asking for comment on this specific point.)

"Given Bitcoin’s recent explosion, it would stand to reason that at least part of Dwolla’s explosive growth is being caused by the ease of compatibility between it and the Bitcoin currency system," Brad McCarty of The Next Web wrote in July.

Dwolla, it seems, is pretty sick of hearing about Bitcoin. "I can’t go a day without talking about it or being asked about it," CEO Ben Milne wrote in a guest post for Silicon Prairie News. A representative for Dwolla told Betabeat in January that Bitcoin traders "now make up an extremely small amount of our daily transaction volume." Dwolla is itself a disruptive payments system and Mr. Milne would rather talk about that. He also made vague references to fraud related to Bitcoin. "Someone obviously figured out how to game it," he wrote, and "Have we found suspicious and fraudulent activity? Yes. Do we deal with it accordingly? Yes."

At least two smaller Bitcoin exchanges, Bitcoin7 and ExchangeBitcoins.com, also stopped using Dwolla. Another Bitcoin-related merchant who did not want to give his name because he is currently raising funding, said Dwolla has "holes" in its security "which allow for customers to scam them easily." About four to five times a month, he said, Dwolla will claim funds and then change its statement after the fact without warning or notification. Dwolla credited the funds back once, he said, but usually the startup does not take responsibility. "It's a love/hate relationship," he told Betabeat. "They have a failed system, so we have our own verification, but still get scammed a few times a month."

However the largest Bitcoin exchange, Mt. Gox, has continued accepting Dwolla. "While Dwolla's sudden increase in reversed transaction and the way they did it (the transactions just disappeared from the history at first, without any notice) did hurt us, the damage was limited to less than $5000, which is more than reasonable," Mt. Gox cofounder Mark Karpeles said in an email. "Each time we needed to confirm something with Dwolla they were able to communicate with us, and helped us fix any issue we ever had. Now cancellations are shown properly in Dwolla's export files and transactions do not just disappear without any trace anymore."

Dwolla said it's moving between $30 and $50 million in transactions per month, Mr. Milne told Business Insider in November, and just announced a highly requested feature: the ability to cancel pending deposits before they clear.

Tradehill v. Dwolla Et Al Complaint (Filed Copy)

Right now, it's tough to buy Bitcoin with cash unless you're meeting someone face-to-face. But in the wake of the most recent Bitcoin crash, a few high-profile incidents that drove the price down to $5 or so from around $13, it's tough for any exchange, even a U.S.-based one with a phone number that goes to voicemail, to convince users of its trustworthines.

Although trust in Bitcoin is gaining again. MyBitcoin users report receiving the 49 percent refund they were promised after the popular service shut down, claiming it was hacked. The price of the e-currency has rebounded to $11 or so this morning.

ExchB, which bills itself as the first U.S.-based Bitcoin exchange, also announced a few new deposit methods and no fees on check withdrawals.

People are flying in from all over the world to attend, Mr. Wagner says, including keynote speaker Gavin Andresen from the Bitcoin Project; Jed McCaleb, founder of MtGox, the founders of TradeHill.com and other Bitcoin start-ups. The agenda includes meals at Bitcoin-friendly eateries, breakout sessions on mining, trading and merchant solutions, as well as time set aside for networking.

"All the biggest names in the world of Bitcoin are going to be here," the conference site says. "People have announced that they are flying in from China.... from Europe... from South America... even chartering private jets to get them here."

Doesn't quite look like a hockey stick, but it's something!

What the hell happened in the middle of 2009? Jerry Neumann, an early stage investor in such companies as 33across and BankSimple, couldn't sleep last night. So he decided to play with investment data from Crunchbase, TechCrunch's crowd-sourced, somewhat spotty record of start-up rounds. "New York City is on a roll, right? Right," he writes. Looking at the data, New York VCs like Betaworks, the sleeper Great Oaks Venture Capital, Greycroft Partners, Hudson Ventures, DFJ Gotham, Union Square Ventures and Village Ventures doubled their efforts in early stage investing since the end of 2009 and they haven't slowed down.

In October 2009, VCs in New York announced no early or seed-stage investments, according to the data from Crunchbase. (Keep in mind that deals often close a few months before they become public.) The month before saw fewer than five deals; it had been a really slow year, actually. But in December (probably closer to August or September), New York VCs made seed or Series A investments in 16 companies including Square, SimpleGeo, Hot Potato and Swipely. And from that point, it was on. Last month, New York VCs did more than ten public deals, including funding for Fab.com, MotherKnows, Warby Parker, DataSift and others. But Mr. Neumann has a suspicion, based on anecdotal evidence, that VCs may be slowing down their early stage investing--which won't show up in the data for a few more months.