Bitcoin Forum

Exchanges can no longer get UK Bank accounts now.
Most recently TransferWise has been forced to stop any funds going to Bitcoin: http://transferwise.com/blog/2013-04/notice-to-bitcoin-users-april-2013

And now I read Canada is the same:
http://blogs.windsorstar.com/2013/04/27/bitcoins-real-world-problem-virtual-currency-facing-bank-backlash-in-canada/

I also heard there were problems in France.

Is this going to be a continuing trend?  What is the solution?  Ripple or some other P2P exchange?

You can use Liberty Reserve and then an e-exchanger that send money to Western Union (or Paypal).

For example, here's a New Zealand based e-exchanger: https://www.alertexchanger.com/index.html

I'm sure as the e-exchangers realise there is money to be made, they'll start adding bitcoins. Or perhaps a bitcoin entrepreneur can create one. Basically as long as you can somehow get money to western union, you don't need banks at all. Western Union may be seeing it's first proper revival since it's glory days in the 19th century!

if I was to hazard a guess the solution would be:
1. fight them setting more exchanges up etc make btc viral. keep unregulated.
2. involve the governments and banks, regulate.

I expected resistance, although I didn't think banks could refuse bank accounts in this way.

I have been using bitbargain.co.uk (http://bitbargain.co.uk) for GBP/BTC which works well, but the exchange rates are typically poor.

they look awful prices. saying im to buy bitcoin at a profit to the sellers on bitbargin then buy something from an online seller at a profit to them then is it any wonder im not buying btc atm.

I like the idea of bitcoin but not the multiple tiers of profit middlemen. paypal is better than bitbargin. a mainstream stock exchange is better than bit bargin.

The Coming Attack On Bitcoin And How To Survive It

http://wp.me/p1adwa-1r

.."Keep all of your bitcoins on your computer..."  That line in that article is fundamentally flawed.  You don't keep bitcoins anywhere, right?
you only store a collection of private keys and addresses that give you exclusive access to what you own in the bitcoin network.
Suggestion should be paper wallet.

The problem is not banks, it's governments...
There are 1000s of banks and credit unions who only care about $$$....
Couldn't give a rat's ass about BTC or what you do with it.

Read any thread here...
The tiny Bitcoin community has declared a silly war on Governments and Fiat Currencies...
And war is exactly what you are going to get.

The war will be be "fought" by fat, middle aged beaurocrats making $80K/year...
The same creepy nerds you guys will be 30 years from now...
Who will issue boring, tedious banking "guidelines" that put everyone to sleep.

It's crazy silly because BTC is a commodity that people hoard...
A commodity with very low real velocity like gold/silver.
And should have been linked to gold/silver from Day One.

EVERY price quote for BTC should be in gold, as in BTC = 2.59 grams...
Every exchange should be BTC/gold/silver and other commodities...
But, NO, you people have chosen to take on Governments head on.

It's as if the Corleone Family pretended the FBI did not exist...
Everyone here should watch the Godfather Trilogy 16 times and take careful notes...
Because the BTC universe from Gox down is run by Fredos.

banks are not pulling the rugs from under exchanges.

exchanges dont even bother making rugs.. they just stand on the cold floor.

meaning they dont bother reading the regulations, getting authorised, keeping records or following any of the rules of handling fiat.

its like a majority of these exchanges are run by amateurs that have no previous experience in finance.

the community needs to up its game. its not difficult.

but being lazy by ignoring the laws and then blaming the regulators like its a total surprise is just reasons why i see the half assed attempts of making exchanges always fail.

What about TransferWise. They don't have anything to do with Bitcoin at all.  Yet their bank have told them not to send money to the account holders of exchanges that do.
http://transferwise.com/blog/2013-04/notice-to-bitcoin-users-april-2013

I thought it cost like $1M for each state to get a money service business license, and that is just in the US.  Right?  Wrong?  You at least pretend to know something about it.

There is a balance of reason, and the cost of an MSB looks a bit more to me like something which is designed by those who already have their foot in the door to stifle competition rather than a legitimate expense required in keeping us safe from those 'evildoers'...or whatever the excuse for monitoring/managing the serfs happens to be at the moment.

Yeah. Losing ~20% in fees is really glorious.


+1

Either you're running a "legitimate" business which means endless forms to fill out, approvals to gain, reports to file, fees and taxes to pay, or you're running a dark side operation like SR. There is no point trying to follow a middle path.

Wow, you really think they'll go down, period?

It's one of the reasons we need a system such as BTC in the first place.

OK.  Because I was going to fold up some tin foil hats... lol

good. banks tied to exchanges just make things traceable.

Want to buy BTC? sell a physical good to someone that has it. Want to sell btc? buy a physical good. Fuck the banks.

good, but not everyone are miners, how can you sell something to a non miner if he can't get bitcoins?

Anyone know David Rothschild?  If the Rothschilds get interested, they can call off the attack dogs.  After all, they founded the whole concept of a medium of exchange with no intrinsic value.

Can't tell if serious..

Just the way Fincen wants it. Use BTC for bartering essentially - don't mess around with fiat.

Can't tell if serious..
[/quote]

Clearly not. People who quote Rothschilds as bring people of influence are digging it out of a manual of financial paranoia or a history book. The Rothschilds (I've met a few) were a family of huge influence in the past centuries, but like most of the 'old families' have little influence in todays financial world. Global finance is dominated by large global firms and they are almost all exclusively run by random professionals with no historic ties to the 'families' and who get shifted about with regularity. The most 'controlled' global firm is Santander from Spain, which is the largest bank in Europe and has been controlled by the Botin family for decades.

+1000 couldn't have put it better.

Virtex is having a few problems same with Canadianbit with banks but their is still a market there
However it will be a battle for sure
Banks are trying to defend a banking monopoly and an upstart like Bitcoin that has growing traction is a big banks worst fear
Since it is undefined in the Bank Act in Canada regarding finance I would say a schedule IV would need to be added
Since its not really a schedule II or III
http://en.wikipedia.org/wiki/Bank_Act_(Canada)
Monetary policy will not be the same if they can't print more money to get out of short term problems and ignore long term ones :)
Also this strengthens international trade without having sovereign debt loads in case of economic collapses so no fractional reserve banking and EU style crisis perhaps a Japan style deflationary bubble is still possible but with Japan's debt the debt is mostly owned by Japanese and is domestic so their is no sovereign debt crisis like Greece in the EU, this keeps nations accountable to their money supply and that's why banks are afraid of it as less money is to be had from trading.

Adopt Bitcoin entirely and set up services like Bitspend to get round the problem, time for the movement to begin in earnest.

True enough but laws tend to be behind when it comes to innovations :)

You think the $1,000,000,000+ market cap is all just miners?

I think as another mentioned we need exchanges to be a bit more professional and to follow the sometimes rules as closely as possible. In a sense some banks are protecting us from fraud but in a sinister way some banks are indeed probably trying to limit bitcoins effectiveness. I don't think it is any coincidence that England, a banking powerhouse, is trying to limit Bitcoin.

But, in the meantime for those exchanges without bank accounts (or with them), as I mentioned in another thread a very effective method (which is used at bitcoin.de + requires 2 factor Google authentication) is to just have account holders register their bank accounts and when coins are bought/sold they are frozen in an account until the money is transferred and received by the buyer. It is slower and not without pitfalls but it is also very very effective. It is a terrible setup if you want to daytrade as you can't, the coins are essentially frozen from 1 - 4 days or so (however long the transfer takes). You basically have 12 hours to mark your transfer as sent and then the receiver marks it as paid once the money is in their account.

So, a typical exchange looks like this. I buy bitcoins from a seller. But before I confirm it I make sure they have a good record (just like on Ebay, etc.). Likewise, the seller can make sure I have a good record before they sell to me. I check my email and send the money via an online transfer to the recipient, noting the transaction code in the online form. I have 12 hours to do this and then mark it as sent. The receiver can't use the bitcoins they sold me, they are frozen in "reserve". Once the money arrives and the seller marks it as such, the coins are tranferred into my account. Both a German transfer or EU Sepa transfer are accepted and FREE. (at least at many banks).

In this manner the banks are not dealing with bitcoin exchanges directly. Rather, sellers meet buyers. There is mostly low risk and the biggest problem is that the exchanges are just overwhelmed right now. I have had one person not transfer the money as the price dropped after I sold them and he chose to just get a bad star rating. (He will have to deal with the Karma of that.  ;D ) Bitcoin.de changed the wait time for sending payments from a then 24 hours to a now 12 hours. It would be nice if they change it to one hour but that would then mostly rule out paper transfers at banks and require things to be done almost exclusively online, which they probably are anyway.

Anyway, the banks can't stop person to person transfers. There is nothing in the transaction associated with an exchange and no mention of bitcoin, just a random code.

These "growing pains" are to be expected, really, does anyone expect a revolution in economics to take place without a struggle? The thing we have on our side is that currencies all over the world are collapsing as we speak. In the process (for years now actually) central banks are selling gold puts to artificially suppress the gold price so that people think things aren't too bad with paper money. They have also been "leasing" gold (actually selling it as it is never coming back) to make up the supply demand difference. Cypress actually has to sell like 400 million of their gold due to the "bail in" (theft), at now lower prices! That will probably follow suit in other countries... Spain, Italy, Ireland, Portugal, Greece, etc. are on our side. The people are on our side for the most part. Those that aren't have just not yet been effected. As more banking crisis happen, the banks will have problems trying to control bitcoin, and letting it survive might actually help save their lives as there are going to be many unhappy people wanting at those criminals.

No more banks, no more wars...

It's About Sharing

finally smart people yay. this is how bitcoin was envisioned.

if you want bitcoin.
you search "drop shipping" or "wholesalers" in google. find some products (legit of course) that will sell. and you start up a business / shop.

you price items in bitcoin. and as the orders come in you pay the dropshipper/wholesaler with your fiat and the products get delivered to your customers. while you keep the bitcoin.

if you have bitcoin but want fiat
you search out localbitcoins for someone that can trade you them or atleast meet you at the car fuel station to pay for your fuel and you pay them bitcoins. or at a grocery store to pay for your grocerys and you give them bitcoin.

if you cant afford to get the licences/insurance (FDIC) then maybe your not the right person to be looking after peoples investments

How are bitpay and bitspend operating? They must need UK and Canadian bank accounts. Maybe they will be next.

bitpay have a secret way of how they convert the bitcoin into pounds. but i am hoping they are atleast following the regulations.

I don't have much interest in looking after other people's 'investments'.  OTOH, it seems like there are probably a fair number of talented people who could make a positive contribution to certain usability issues, but having them locked out by a banking/regulatory cartel because they don't have $50M excess funds kicking around is wrong.  It detracts from my ability to select value-adds for my investment by quashing them before they start.

It is also the case that I pay a fair amount of taxes without pitching to much of a bitch about it.  In addition to roads, I also want reasonable access to the legal system I pay for.  By locking out or forcing Bitcoin related businesses underground it becomes more cumbersome for me to leverage my legal system when I need to.  A side effect is that it opens up a huge market for criminal users who know that they have nothing to fear from law enforcement.

its not really any different... miners have to sell coins for them to be circulated do they not? Bank tied exchanges aren't any more necessary for them to trade than anyone else.

no one is locking out bitcoin businesses!!!!!

in the UK it does not require holding $50M, this is the problem with people making exchanges. they simply dont know the regulations or requirements because they are too lazy to read them.

if your transacting less then £3mill a month then you only need to be FSA authorised... Over £3mill a month then you need to be FSA Accredited.
read the regs involved which mainly concern having code/policies inplace to recognise repeat customers to know how much they transact in FIAT to warn/avoid them going over limits. and require ID if they wish to continue over the limits. validate this information, either using 3rd parties services (credit agencies etc) or by requesting government supplied identification.
store the information as the regulations require of you and have policies to act/react to certain situations.

 if these past exchanges actually read the regulations and requirements they would see they are not being locked out at all, its not that hard to follow the regulations. and if they want to say they are secure and knowledgeable and experienced to look after millions of pounds of money. to actually prove it by following the regulations


the problem is that they dont bother, and then a small problem rears its head such as a scammer talking to their bank asking for a chargeback. which snowballs into bank investigations which lead to finding out an exchange has not even bothered to follow the guidelines. which manifests into the banks making a SARS report, which results in the exchange being shutdown.

simple solution. read the rules, follow them and you wont get shutdown.

it facepalms me to see all of these so called trusted exchanges cant even follow simple regulations. the banks /regulators are not out to get bitcoins. they are out to protect peoples FIAT.

To be honest franky1 is both right and wrong, I agree with him on the main points but FSA wise I should tell you that these guys are out to screw everybody who isn't one of 'them' it isn't really to do with Bitcoin but more to do with elitism. The bank of Dave documentary pretty much showed the FSA to be a rich boys club and wouldn't even meet with the guy to approve his bank and it was due to some lawyer trickery that Dave got the bank set up.


ooo here we are, found this on their website too.

A possible solution is to BUY THE FED and set regulations promoting bitcoin :

Buy with BTC for $450M

quoted from below article

By law (check the Congressional record), we can buy back the FED for the original investment of the FED's 300 shareholders, which is $450 million (Reference 1, P. 227, Reference 17, P. 36)

http://www.apfn.org/apfn/fed_reserve.htm

I actually do also with several caveats:

 - As long as the regulators are making a good faith effort to assist legitimate business

 - At the present time which we will probably look back on as calm financial seas at some point in the future.

As a consumer I would strongly favor a financial service provider who budgeted the resources to dot their 'i's and cross their 't's simply because it would indicate a reasonable level of professionalism.  When it is not reasonably practical to do this, I consider it a failure of the regulatory system more than a failure of the businesses.

Can you explain what has happened to TransferWise? Are they bluffing?

$50 million entry fee means only a few state-supported monopolies can stay in business.


The regulators set up and enforce the stupid laws so they are the ones to blame.


The US may require. But UK has it's own stupid laws and regulations (just going through it online for a few minutes gave me a headache) and if one wants to remain compliant with all the insane regulation of other countries whilst conducting business internationally (even though it's only accepting or sending electronic funds and accepting and receiving BTC) then suddenly only 1 company may be able to afford to do so.

You write:


and then you write:


Don't you think it's a bit contradictious of you now? Who do you think is burdened with costs of time and money with this foolishness?


Are you an exchange owner, if so, which one and what is your experience?

the problem is that they dont bother, and then a small problem rears its head such as a scammer talking to their bank asking for a chargeback. which snowballs into bank investigations which lead to finding out an exchange has not even bothered to follow the guidelines. which manifests into the banks making a SARS report, which results in the exchange being shutdown.


Nope (http://transferwise.com/blog/2013-04/notice-to-bitcoin-users-april-2013)

The moon is hollow

qouted from the below article

http://the-tap.blogspot.com/2012/02/moon-is-hollow-how-come.html

Think with your head before posting nonsense.  If it could be bought for 450M any one of the hundreds of billionaires in this country would have.

Exchanges should be started in business friendly countries, not in the US/UK/Poland/Germany

I think the interim solution is going to be something like the Bitcoin ATM, or physical kiosks and shops selling BTC *for cash*. No dramas about bank accounts or lots of deposits and payments.

Just work in cash. It's how people for example buy prepaid phone credit. The infrastructure already exists - you just need to make a good business case to these shops (typical 7/11 etc).

+1

use local bitcoins or ATMs that have a $1000/euro1000/£850 daily limit and you never need to worry about FSA fincen shutting them down. thats what makes me laugh about these "official" exchanges that exceed the amounts and never follow the regulations to realise what needs to be avoided.  and then they cry when the regulators come knocking.

as for tranferwise.

they should develop a relationship with their bank better. their own statement

well if transfer wise has ID on the customer and ID on the bitcoin exchange then the money trail does not end with transferwise so banks wont worry about transferwise as they are following regulations.

the problem yet again is the exchanges. that dont keep logs of the money trail above the limits to keep the banks sweet. so the banks advise middle men to stop dealing with exchanges.

exchanges need to up their games, pure and simple

It is naive to think that Transferwise halted transfers to Bitcoin exchanges because of perceived competition to their own business model. Transferwise is an internet business - to adapt its model to integrate Bitcoin would be trivial. They have the business, software and regulatory foundations making them better placed than any existing Bitcoin business to take advantage should Bitcoin prove popular.

A more plausible answer is that their banking provider noticed an increase - or was notified of an increase - of funds that had been flagged moving through Transferwise's account. Bitcoin provides those with unlawful access to funds the ideal opportunity to 'break' the paper trail. By funneling money through Transferwise and then into a Bitcoin exchange, the money can be laundered and effectively pass the fiat liability onto the last link in the chain. It is fairly clear that Eastern European banks are not particularly concerned about the provenience of funds that are deposited to their accounts (this was a prime concern of the Germans with regards to the Cypriot banking systems "Ask no questions, hear to lies" attitude) so this likely leaves the liability in the lap of the preceding link in the chain... in this case Barclays. Money service businesses are categorized in the highest risk bracket by the banking sector - those who are lucky enough to exist with a banks grudging blessing - do so at the banks pleasure.

Transferwise was likely told that due to an increase in fraudulent transactions entering their account and an increase in funds leaving to high risk endpoints (Mt Gox Poland or Bitstamp Slovenia), they either cease directing funds to these accounts or their account would be terminated. If they lost their account, it would likely severely hinder their ability to do business in the UK. Sure, it was profitable, but they have no real power in the relationship and that in essence, is the irony of Transferwise's rhetoric; they spout about how much "Banks are bad" "Banks have had their fun" etc etc, when infact they are completely and utterly at the mercy of the banking sector...

+1000

if exchanges want to help bitcoin be legit then they too must be legit, which will ensure any middle men wont have issues dealing with exchanges. if a exchange doesnt want to be legit, then stop dealing in FIAT as they are becoming the problem of making bitcoin look bad

those are business friendly countries.  if they weren't, they wouldn't have some of the highest per capita incomes in the world

i suspect you're getting privacy laws confused with business friendly

also using transferwises own quote


[1] regulators do take a stance.. on FIAT
[2] banks dont have to care about bitocin, banks are in the FIAT business not the cans of baked beans business so it doesnt matter what you buy with your FIAT, they jsut want to know where and with whom the FIAT ends up
[3] banks dont care, as long as they can follow the money (FIAT) trail
[4] hmmmmmmmmm big revealing point... the KYC rules are NOT new and not specifically tailored. KYC rules have been the same for many years. its only national media that has hyped it up as being new. which to me shows that transfer wise has not read the regulations fully to know this. but instead just read about it in newspapers. and why is it also revealing.. because as a irish company transfer wise is managed by FSA which does not use the term KYC. they use the term CDD (customer due diligence)
[5] banks know exactly what is expected of them. any amounts over $1000 in a smal period of time needs to have available tracking information.

transfer wise obviously didn't have enough knowledge of the rules or the information of exchanges to pass onto banks if the banks asked for details of "who is bitstamp"

That must be important to be worth two numbered points. Why would they care about that? largely because the state threatens to punish them if they don't "care".


Transferwise's headquarters is in London, not Ireland. The FSA was a UK regulator. It has been abolished. Google site:fsa.gov.uk KYC.


They use dollars in Ireland (or is it the UK) now?

not caring as in banks don't mind if your buying 2000 cans of baked beans or bitcoin, banks just want to know where and who the money is going too. i have a bank manager and thats what they said to me:
to keep logs of who is doing large payments and to fill out a sars report (which goes to serious organised crime agency not the bank, if theirs suspicions of a illegal use of funds) FSA have also confirmed this.
cheers for the correction on the london office, sorry i was checking up on several businesses at once. but british rules still apply. FSA are not abolished. and CDD is what is wrote in the UK/EU REGULATIONS not in the laymens leaflets which tries to be more internationally user friendly.

I'll add something.

US, UK and Germany are quite business friendly but they have some inconvenient regulations for companies wanting to do business involved with handling fiat.
Poland is generally NOT business friendly but in term of finances they have less of those regulations (AML/KYC/other BS). In the case of the recent Bitcoin-24's Polish bank account closure, it only happened because the German authorities investigating asked the Polish authorities to do so.

Now you are getting the idea.  This is what happens when you give power to gov't.  Any power.  As soon as the gov't has power, groups will form to convince government to use that power to enhance their group.

From the nail salon or hair dresser to the construction trades to the doctors and lawyers, they all have their regulations and requirements to limit and discourage competition.  And all done in the name of public safety, courtesy of the government paid for by that same public.

If it were really a matter of public safety the issue could be solved by information instead of force - the "authorized" business could display their gov't license, gov't could confirm that any business is or is not authorized.  But information instead of force means anyone would be free to start a business and anyone would be free to choose to use an unauthorized business at their own risk.

Competing groups could form and then provide those same services of authorization (accreditation and validation).  If the competing group(s) proved more trustworthy than the government accreditation then gradually the gov't business would drop off because nobody would care to obtain the gov't certification.

But no, instead the group with guns gets more and more powerful and claims the right to choose what business people can start by setting arbitrary restrictions and waving their guns if you forge your own path.

I hope you've not fooled yourself into thinking that anything you said is not something I've not considered over the last 25 years or so.  Everything is so binary with you people.  It gets tiresome.