The Paypal user agreement allows them to hold your money for 6 months for any reason or no reason at all.  In addition, everytime you receive a chargeback, the 6 month clock starts over - so even 1 chargeback can techncially allow your money to be held for up to a year if it occurs at the end of the 6 month holding period. You agree to it when you open your account - you can't sue.

Here's an idea...WHY NOT USE BITCOIN FOR THESE TRANSACTIONS???

Just an update.  As I predicted nearly a year ago (though I thought it would be for different reasons) Charlie Shrem, Bitinstant CEO, was arrested yesterday (Sunday 1/26/14) for using Bitinstant as drug money laundering machine.  The Bitinstant website is now completely blank.

http://www.bbc.co.uk/news/technology-25919482

Never, they are currently fighting a federal class action lawsuit.  Somehow their CEO @charlieshrem is still out and about - apparently they have avoided a criminal indictment for now - but I don't see Bitinstant itself ever coming back.  Since they have a potentially very large judgment coming down the pipeline, at best they would transfer any intellectual property they had to a different corporate entity and start under a new name.  Starting with no reputation is better than starting with a bad reputation.

If they need to amend claims, it will be easy enough for them to find plenty more Bitinstant victims.  413 pages of them right here:

https://bitcointalk.org/index.php?topic=128314.msg2766131#msg2766131

That is true.  The courts do need to certify it, and this case is in its very early stages.  The next court date, a pre-trial conference, is in mid-September.  But, it doesn't bode well.  The claims seem legitimate and the lawyers behind it seem to know what they are doing.  The minimum number of people necessary to form a class is 50, and I suspect that in this case there are thousands of potential class members.  They seem to have a legitimate shot at obtaining class action status.

Many class action lawsuits are over relatively small transactions (though you chose to mention the lowest transaction amount shown in the complaint).  It is a significant suit, however, because class action status means that every person that the court determines was damaged by their actions will be awarded money (the people that the court determines to be in the "class" of people that were damaged).  The court will base this on Bitinstant's internal records, and would likely affect to a significant percentage of transactions that occurred in 2013, which is likely to be tens of thousands of transactions and millions of dollars in damages.

With regard to your general statement that users should have expected problems, I don't think that's a valid legal defense .  The problem, as mentioned in the complaint, is that Bitinstant went to great lengths to represent that they could and would deliver all orders within two hours.  Once these attorneys get into the discovery process, they will get access to Bitinstant's internal databases, and I think the sh*t will hit the fan when they see the sheer number of orders and the massive delays (and in some cases, outright non-delivery) that occurred.

I have an account on the PACER federal court document search system, and happened to run across it.  It was filed on July 8th but I have heard nothing about it, so I thought it would be interesting to some people.

Here is a link to the lawsuit.  I'm not sure it's good news for the Bitcoin community, but at least the larger bad actors are beginning to fall fast.

http://www.scribd.com/doc/160406193/Bitinstant-Class-Action-Lawsuit

FYI, someone finally filed a class action suit in federal court against these guys.  Because they have filed a class action suit, any Bitinstant customer that has suffered actual losses or lost potential profits as a result Bitinstant's actions/delays/failures should contact the law firm involved.  You can join the class and eventually get compensated if Bitinstant has any money left. A pretrial conference is scheduled for September 13.  Here is a link to the complaint:

http://www.scribd.com/doc/160406193/Bitinstant-Class-Action-Lawsuit

The email addresses of the attorneys to contact can be found on the last page of the lawsuit under their signature - I don't want to post them in a public forum.

Yes, from their updates page it appears that during first month they are going to run a promotion where they steal 25% less than normal.  Instead of half of all transactions simply vanishing, as little as a third of transactions will be stolen (but only during the first month, then it goes back to normal).  Can't wait!  I'm headed to the ATM right now.

And yet they had to lay you off....they couldn't afford the salary of a customer service employee, which (no offense) couldn't have been that high.  Also no offense, but like many others you seem to have been under the Bitinstant "spell" as well.....you spent your time defending them when all the evidence pointed to a very problematic future for Mr. Shrem personally and Bitinstant as a company.  I've said this time and again, but I'll say it again: code either works or it doesn't.  It doesn't work just sometimes, and it doesn't require endless delays while people manually "push through" transactions.  The fact that some (small) transactions went through instantly, while most others instantly received "order failed" responses, shows that the code worked.  So when they had delays, it was because they had no money.

All of these were bankroll issues.  They could have easily publicly displayed how many Bitcoins they had available to sell, and stopped taking new orders that couldn't be immediately delivered, until they had more coins available.  They could have even setup an email queue that would let interested people that wanted coins know instantly when more coins were available.  But they couldn't do this, because they needed the new transaction money in order to process old transactions (aka Ponzi Scheme).  Who knows where the old transaction money went - perhaps Charlie's trips to London.  They were selling things they didn't have with the promise of immediate delivery.  They were no different than criminals that post items they don't have on eBay, collect the money, and run - except they did it on a larger scale.

Yes, because out of these 412+ pages I was the only one complaining.  And by the way, the proof that they had become a Ponzi scheme (besides the fact that they are now and probably forever closed) was overwhelming.  They lied to everyone about technical issues to buy themselves multi-week delays while they prayed that no one called the FBI because they took customer money.  I'm a programmer.  Code either works or it doesn't.  It doesn't work sometimes for some people and not for most others (unless you want it to because you have no money to process orders with or intend to run off with the money from the order).  They haven't responded to this thread in over 2 weeks.  They laid off their customer support staff becuase they couldn't afford them.  Their $8/month blog was even shut down for a time for non-payment.  At Bitinstantscam.com (not my site) nearly half of people were reporting that they never received their orders, and that was reflected in this thread and on Twitter, their Facebook page, and Reddit.  Everywhere Bitinstant could possibly be contacted, there were complaints about "failed orders" followed by excuses about "technical issues". The proof was piled higher and deeper than the BS they were spewing, and they have confirmed it by shutting down.

I understand that no one wants to believe they were conned out of money. Maybe you actually are one of the few that have hit the lottery by not losing money to them and only having to wait 24 hours for you money, but many others did not share your experience. My guess is that the next step will be the feds coming in.

Coinbase just introduced instant purchases (though you have to complete 1 slow purchase first).

Hmm...well if you're looking for an alternate person to just give money away to, I'll take it.  That's all Bitinstant was the last few months.

Yeah, my guess is that this is the end.  Too bad; they started off like a great, legitimate service.  I don't know what happened, but maybe this will clear the way for a well-heeled competitor.  Coinbase started instant purchases the other day (though you have to be an established customer).

A few things:

1) See http://bitinstantscam.com/ .  48.6% of orders are showing up as never delivered - as in money simply gone.

2) The last post from a Bitinstant rep here was June 28, 2013 @ 05:29:52 PM pacific time.  Nearly 2 weeks ago.  They had to lay off their customer service people; Bitinstant is largely a ghost ship now.

3) Don't send Bitinstant any more money.  See if you can get a refund from the ZipZap/CashPayment.com people, and if you can't, chalk it up as a lesson learned.  Always do your research on the current status of a company in the Bitcoin industry - they die off fast.

4) Use localbitcoins.com .  You'll feel a little like you're doing a drug deal buying coins in person, but you'll get used to it.  If you can wait a few days, use Coinbase

Read the last few pages of this thread.  You might as well call the cops now.

Ok, so they also can't pay their $8/mo blog bill on the 4h of July weekend, or respond to anyone in here, and they laid off employees in celebration of Independence Day - they wanted to give them their independence.  Sounds great, I'm glad we all know that there is a perfectly logical and innocent explanation for all of this that doesn't include the collapse of one of the largest Bitcoin services on the Internet.

Well, the blog link on their home page still goes to http://blog.bitinstant.com so that means if they moved the blog nobody told the person handling the main site.  Also, that looks like a "you haven't paid your bill" type of page, which probably isn't a good sign either since a Square Space account costs $8/mo (had they simply deleted their account, you would see this page instead).  Probably not a coincidence that this happened shortly after the 1st of the month, since any corporate credit cards they had to bill that type of thing to are likely toast. They claim that their office is at:

20 W 23rd Street
New York, New York
10010

I wonder if anyone in New York could even confirm that they still have an office.  Their swashbuckling CEO, Charlie Shrem, has even stopped tweeting the last 4 days straight, when he used to tweet several times a day.  Given that and the silence here, I'm afraid Bitinstant has finally hit the skids.  If they have, I assume there will be criminal charges stemming from all of this....I guess I'm not surprised that the CEO has simply vanished.

They always came out of it before because they had enough new orders to sort-of keep up appearances.  Now, apparently they don't have enough order flow to even keep a few hundred dollars in the bank, and have tons of undelivered orders.  At some point during all of this, they also received $1.5 million from the Winklevoss twins (of Facebook fame) that helped carry them for a while.  It appears that no more money is coming from anyone to save them.  Again, the fact that they have dropped all attempts to even communicate anymore (beyond automated emails) is all the evidence you need.