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Major Bitcoin Exchange Ceases Operation

Posted by Unknown on from the but-mom-money-does-grow-on-gpus dept.

First time accepted submitter Sabbetus writes "On Monday the CEO of prominent Bitcoin exchange Tradehill announced that they are shutting down. Ars Technica ran a story on this stating that 'After Monday's news, the currency's value fell from $5.50 to $4.40, a decline of 20 percent.' Tradehill is returning all funds and meanwhile their competitors are fighting over who gets Tradehill's customers."

4 of 208 comments (clear)

  1. Bizarre and Confusing Summary by eldavojohn · · Score: 5, Informative

    ... meanwhile their competitors are fighting over who gets Tradehill's customers.

    Not sure where that came from, didn't find it in the Ars article. At the end they mention Mt. Gox being the only other exchange ... so there's one competitor. They didn't mention anything about fighting over customers.

    Furthermore the third sentence in the Ars article was suspiciously absent from the summary:

    He has pledged to open a new site once these issues have been resolved.

    As well as the explanation of why all this happened (lack of proper money transmission licensing). I've asked this many times before but how do you track illegal purchases on BitCoin when, by definition, it claims to be an anonymous payment solution?

    Quite simply put, no BitCoin exchange -- neither Tradehill nor Mt. Gox -- is going to be able to comply with the Bank Secrecy Act.

    --
    My work here is dung.
    1. Re:Bizarre and Confusing Summary by houstonbofh · · Score: 5, Informative

      Quite simply put, no BitCoin exchange -- neither Tradehill nor Mt. Gox -- is going to be able to comply with the Bank Secrecy Act.

      Totally not true. They have to record cash transactions for negotiable instruments. They have to report cash transactions over $10,000. Most of them did not deal in cash at all, but in credit or debit cards and paypal, all of which is easily recorded. The act makes no mention of tracking the negotiable instruments (bitcoin) after they are sold.

  2. Tradehill were the good guys by Animats · · Score: 4, Informative

    Tradehill was probably the best-run Bitcoin exchange. They didn't steal customer funds, like some of the other defunct Bitcoin services. They didn't go down much. They didn't have a monthly crisis like Mt. Gox. (formerly Magic, the Gathering Online Exchange. Really.) If Tradehill does in fact return all customer funds, at least they shut down honestly.

    A basic problem with Bitcoin is that the ability to irrevocably transfer funds to anonymous parties is the scammer's dream. Bitcoin is thus a scammer magnet. Just about every known financial scam was replicated in the tiny Bitcoin world, from fake banks to fake stock exchanges to Ponzi schemes.

  3. Re:Speculation is all the Bitcoin has by subreality · · Score: 4, Informative

    How can I short this currency?

    Right over here: https://bitcoinica.com/

    Be careful. Volatility cuts both ways.