San Francisco based TradeHill announced on Monday 2/13/2012 that they were halting all BitCoin trading immediately, and would return customers’ deposits via check payments. The news comes just days after Quebec-based Paxum cut off payment services for all BitCoin related businesses, including TradeHill. This severely limited TradeHill customers’ ability to “cash out” their bitcoins into US dollars.
TradeHill CEO Jared Kenna said on his blog yesterday “Effective immediately TradeHill will be shutting down trading / deposits and returning all client funds.
Due to increasing regulation TradeHill can not operate in it’s current capacity without proper money transmission licensing. Combined with multiple bank account closures and Paxum’s decision to close all Bitcoin business accounts, we have deemed the best course of action is to halt trading and pursue licensing while raising funds. SEPA transfers for our Euro customers have been enabled.”
I spoke with Jared a couple of months ago at a BitCoin meetup at Google in Mountain View, CA. We discussed the need for his business to have a money transfer license, and the expense and complexity of applying for one. It seems like this ongoing burden, combined with a previous loss of $100,000 from a payment processor who arbitrarily withdrew funds citing chargebacks, plus the lockout by Paxum were just too much.