Bitcoin Exchange Founder Denied U.S. Entrance

Along with "bomb" and "fresh fruit," add "bitcoin" to the list of things you should never say at U.S. Customs.

"Nefario," codename for China-based founder of the Global Bitcoin Stock Exchange, says he was sent back to China after he arrived in Seattle with $600 on him for a two-month visit, and was unable to convince customs officials that he had $1,500 more in bitcoins.

The "British and Irish" national was traveling to the U.S. through the Visa Waiver Program, and landed in Seattle-Tacoma Airport on July 19. As he writes in an inaugural blog post at his exchange's Web site, he was on his way to meet entrepreneurs Mike Koss and Peter Vessenes of Startpad.org to discuss "bitcoin projects."

At customs he was asked the usual questions about his purpose for travel and value of assets on hand; apparently his responses were unsatisfactory, and he was promptly pulled aside.

Officials said they wanted to learn how he intended to travel to San Francisco and New York in two months with only $600 in his pockets.

"Although I was cash poor I had more than enough bitcoin to cover all the costs of my trip and stay," Nefario wrote. "I was going to be meeting with bitoption later that morning in Seattle, he had $1500 of cash to exchange. I explained this to the agents and then the topic of the questioning turned to how bitcoin worked."

After an hour lesson on bitcoin, Nefario said the officials seized his phone and iPad and downloaded copies of its contents.

"They searched me, and my bags, I was questioned and cross examined on who I would be visiting, what I would be doing, and how I exchange bitcoin for dollars or services , how I got the bitcoins...for hours."

"Finally I was informed that I would not be entering the United States on that day, but that I would be able to apply for a visa in the future, and if given should be able to return."

Bitcoin, a decentralized virtual currency formed by programmers in 2009, has found fans in libertarians, hackers of all shades, computer programmers, and more. In its purest form it does resolve issues inherent in traditional currencies, like double-spending, inflation, and corrupt politicians, but has been caught up in recent exchange breaches and account theft. It first gained some mainstream attention in May when hacking posse LulzSec announced it was accepting donations in bitcoin.

For more, see "Which Bitcoin Exchange Can You Trust?"