Tradehill halts bitcoin trading due to IAFCU "operational and regulatory issues"
Published on August 30, 2013 at 14:29 GMT
Tradehill's founder and CEO has confirmed the bitcoin exchange platform has suspended trading due to "operational and regulatory issues" faced by its bank – the Internet Archive Federal Credit Union (IAFCU).
His statement reads:
"We have recently made the decision to temporarily suspend trading on the Tradehill platform.
Internet Archive Federal Credit Union has experienced operational and regulatory issues and we are no longer able to continue our relationship at this time.
Our unique relationship with IAFCU allowed our clients to hold their Tradehill balance in an account opened in their name and federally insured. If you had an account with Tradehill after our integration with IAFCU and would like to withdraw your funds please contact firstname.lastname@example.org.
We look forward to resuming operations soon."
Jordan Modell, of IAFCU, also wrote a blog post on the subject, claiming that his company has enjoyed serving some of those involved in the bitcoin space, but that until it receives some clarity from regulators, it can no longer continue to serve some of its "corporate members".
He suggests he is still interested in helping to create a "stable environment" for bitcoin to thrive in.
His full blog post reads:
"Starting three months ago we have enjoyed serving some individuals and companies involved in bitcoin that are within our field of membership. While exciting, this has also been during a period of increased interest from the press, regulators, and other financial services entities that make up the financial community.
In doing this, certain operational and regulatory issues came up including some that apply to new credit unions like ours.
Our credit union has worked within the evolving regulatory environment, which has not always been easy. This is a long not a short road and sometimes with detours. Until we have further clarity, we are unable to service some of our corporate members.
On a positive note, we are finding all involved are interested in a stable environment for bitcoin and other innovative technologies."
Tradehill has had a pretty bumpy ride of things right from the get-go. The exchange first launched in early June 2011, but reported anomalies with Dwolla payments the following month. Fast-forward eight months to February 2012 and Tradehill was shut down after losing $100,000 in a dispute with the payment processor.
The company was back with a vengeance, though, in March of this year when it launched Prime – a B2B digital currency exchange.
“We are excited to present a new way for businesses and high-end investors to interact with the digital currency economy," Jered said at the time.
However, it hasn’t been smooth sailing since then. On the day Tradehill relaunched, US financial regulator FinCEN released its regulation on virtual currencies, which confirmed that anyone selling units of a decentralised virtual currency to another person for real currency or its equivalent should be categorised as a money transmitter.
This guidance applies to businesses 180 days after they begin trading in bitcoin, so Tradehill has until mid-September to get its paperwork in order.
CoinDesk contacted both Tradehill and IAFCU but had not received comment at the time of publication, so it is not known what Tradehill's next steps are. Kenna's reddit statement suggests the company will be up and running again soon, so it is likely he is in talks with other potential banking partners.
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