When the founder or founders of Bitcoin decided to use the name Satoshi Nakamoto they virtually guaranteed that Asia, and especially Japan, would be the epicentre of the cryptocurrency craze. Japan has led the world by legitimising the phenomenon through regulation. As a result, there are now more than 3.5m Japanese cryptocurrency traders and the country accounts for about 40 per cent of global Bitcoin trading.
The world’s biggest cryptocurrency exchange by trading volume is called Binance and was started by Chinese technology entrepreneur Zhao Changpeng. In February, Forbes magazine put Mr Zhao on its cover and said he claimed he had built a fortune of up to $2bn in seven months.
Bitcoin and other virtual currencies have plummeted since then, but such tales of wealth creation in the region have attracted the type of get-rich-quick operators you might expect. My colleagues in Asia and I now receive scores of emails every week promoting cryptocurrencies for farmers, for people with no internet access, for people who worry about privacy. There is even a photo on Chinese chat groups of a room full of people in yoga poses attending a “Buddhist blockchain wealth forum”.
Most of these solicitations end up in the trash without ever being opened, but last month I received one that piqued my interest. It was an invitation to the inaugural Coingeek.com Bitcoin Commerce Conference to be held in Hong Kong’s luxurious Four Seasons hotel, but it hinted strongly that the real draw was an after-party that promised to be “epic” and would double as the birthday party of a man called Calvin.
It turns out the new face of cryptocurrencies in Asia is none other than online gambling kingpin Calvin Ayre, a man who was indicted in the US in 2012 on federal money laundering and illegal gambling charges. Mr Ayre instead pleaded guilty last year to a misdemeanour charge and was given a $500,000 fine and a year of unsupervised probation. He also agreed not to try to recover $66m seized by the US government.
The son of a Saskatchewan pig and grain farmer, Mr Ayre had previously been fined and banned from running or promoting a company listed on the Vancouver Stock Exchange for 20 years for his part in a share-trading scandal in the mid-1990s. Not long afterwards he moved to Costa Rica and, by 2006, he made the cover of Forbes magazine, which estimated that the value of his Bodog.com online gambling empire made him technically a billionaire.
The pinnacle of Mr Ayre’s career may have come in 2007, when his company hosted a mixed martial arts tournament in St Petersburg that was attended by Russian president Vladimir Putin, former Italian prime minister Silvio Berlusconi and actor Jean-Claude Van Damme.
In what must count as the ultimate pivot to the tech industry, Mr Ayre is now a promoter of cryptocurrencies, especially Bitcoin cash, which he hypes with the same fervour as his online gambling operations.
“Come for the dancing girls, stay for the low transaction fees and swift processing time,” says an article on his Coingeek.com website, which features photos of the man himself engaged in various scenes of debauchery.
Considering all this, the event in Hong Kong proved disappointing. The conference during the day was pretty dry, spiced up only by an offer of citizenship through investment in Antigua and Barbuda, where Mr Ayre lives and serves as special envoy to the prime minister on internet gaming and Bitcoin. On arrival at the after-party, guests were greeted by scantily clothed models carrying toy ray-guns and light sabres. Everyone was offered a red pill or blue pill — a reference to the cult film The Matrix — and led blindfolded into the nightclub.
As a metaphor for the current state of the cryptocurrency sector you don’t get much better. But it would be wrong to dismiss the entire industry. Many very sober, smart people believe cryptocurrencies are here to stay in one form or another and they are trying to distance themselves from the image promoted by Mr Ayre.
It’s worth remembering that the ecommerce behemoth Amazon eventually emerged from the wreckage of the dot.com crash. More likely than not the cryptocurrency equivalent will come from Asia.