He means that Dwolla is no longer processing BSInstant transactions.  And you can pretty much infer from the fact that they have simply gone quiet that their current status is....up the river without a paddle.  The 40% decline in BTC prices over the last month should have helped them out, but it's fairly obvious now that they don't even have a few hundred dollars in the bank to pay employees, much less to cover hundreds of thousands of dollars in undelivered transactions at any price.  I have a feeling the rapid price decline in BTC has something to do with BSInstant's inability to buy BTC anymore, since they were a major buyer.

They managed to somehow keep order flow coming for a lot longer than I thought they could after they first started lying about technical problems several months ago, but I'm afraid the ship has finally sunk.

https://bitcointalk.org/index.php?topic=128314.8160

Read 410 pages of complaints and then tell us how reputable they seem.

The company appears to be no longer able to afford to pay Ursay and at least 2 others that they have laid off.  Ursay is likely under an NDA, so it is very unlikely that you will see him respond here.  But yes, he has been laid off.  The company is going down the toilet.

Everyone should consider the fact that Bitinstant doesn't have enough cash in the bank to pay low-level employees a few hundred dollars per week before you send them your hard earned money expecting something in return.

Because at some point somebody took a huge amount of customer money for personal use out of the company, or they managed the business poorly and lost large amounts of customer money.  Either way, customer money is gone and now they feign ridiculous technical issues in order to try to keep customers from calling the FBI while they wait for new orders to come in.  There is a possibility that with fees they could earn enough to fill that hole and get themselves out of this mess, but that doesn't appear to be happening, or perhaps the hole is growing (someone is continuing to take money out or they are continuing to mismanage the business and lose money).

The primary characteristic of a ponzi scheme is that they are "borrowing from Peter to pay Paul".  That is what they are doing, and they are doing it to cover a massive hole in their books.  They are misrepresenting that they have the money to be able to process new orders, when in fact they are just taking money from new orders and allocating it to old orders.  That means somewhere along the line, somebody made off with a huge amount of customer money, or the business was mismanaged and they lost customer money (which is supposed to be clearly segregated from business operating capital - this kind of thing isn't supposed to happen).  Either way, it's a fraudulent scheme that will only be able to continue as long as a new stream of customers keeps coming.

It can be a ponzi scheme if they are using money from new orders to fund old orders, which is exactly what has been going on with them for several months now.


That is laughable nonsense.  For starters, I have a ZipZap merchant account, and they do have a back end (the back end is hosted on CashPayment.com).  Second, they may choose to do refunds via API call, but if they do, one would think that given the 409 pages of complaints in their support thread, they would have done these refunds before and have already had the code written for making them.  

Yet another lie they have been caught in trying to buy time to get more orders in to pay for old orders.

Does that mean they "found" your money?  Bitinstant has gone radio silent in their actual support thread and fired/laid off their customer service reps that were interacting with people on there.  There are also alot of complaints floating around.  It's a Ponzi scheme and it appears that it is (finally) on the verge of collapse.  My guess is they hurriedly rolled out the new site in hopes that the Winklevoss twins would give them more investment money (beyond the $1.5 million they have already sunk into it) to cover the massive hole in their books, and they were turned down.  Given that they couldn't even pay their customer service reps, imagine the odds against them being able to buy any Bitcoins and deliver them.

It's "working" in that they will take your money today, and use it to pay for older orders.  If and when newer orders come in, they will use that money to pay for your coins, and then and only then will you get your coins, while the new orders get delayed.  They are likely seeing an even bigger cash crunch now, because Mt. Gox has suspended all US dollar withdrawals.  I suspect that was the death blow for the company.

Come on guys.  This isn't a case of "where there's smoke, there's fire".  In this case there is a 5 alarm fire clearly visible from 20 miles away, yet some people keep sending them money.  They have obviously laid off Ursay because they either didn't have the money to pay him, or finally realized that saying "we aren't scamming anyone" 50 times per day doesn't make it any less true.  They have stopped responding in this thread.  That should tell you all you need to know.  If you read this thread and then send them money, you deserve to lose whatever you send.

I have been saying for months that Bitinstant was a Ponzi scheme and on the way out.  Ursay has removed the BI logo from his profile; I assume they have finally realized that just having people respond to every message won't matter when you have thousands of customers complaining.  I don't know what happened to the money, but there is a huge hole in their books that they can't recover from.  Their "technical issues" are absolute BS...I am a web developer, and none of the things they have said pass even the most basic smell test.  The code either works or it doesn't; it doesn't selectively work.

I think the roof has finally caved in.  You'll notice they aren't responding anymore in this thread.  It's interesting that the Winklevoss twins are involved in all of this as investors....they are going to get alot of bad press when the feds finally move in and press charges against the main executives.  Bitinstant is destined to become the worst black mark in the history of the Bitcoin community.  Between this and the suspension of withdrawals from Mt Gox, it may actually be the death knell for Bitcoin in general.

Use localbitcoins.com .  I am in no way associated with them, but they are easier to deal with if you use people that have a good reputation on the site.

I just have a simple question....is there a single person...anybody...that has had a transaction go through?  If so, just reply here.  The proverbial sh*t seems to be hitting the fan with these guys.  Are transactions from today going through, with those before today "delayed" (I'll use that term to be nice), or are all transactions simply not going through?

Do they hold individual state licenses as well?  If they did, why would they publish such statements about "acting as agents" of other state licensees?

Well, somehow they are getting away with it and are not licensed. All I'm saying.

Here is a little tidbit from https://new.bitinstant.com/whatwedo:

"BitInstant acts as an agent of its partners in all states in which its partners hold a current money transmitter license. In the limited states where BitInstant's partners do not currently have a required money transmitter license, BitInstant will not act as an agent of it's partners and may rely upon other payment methods to legally fulfill Bitcoin purchase orders."

In other words, they aren't MSB's either.  They are relying on the MSB licenses of Moneygram (via ZipZap) and PayPal.  By that logic, since PayPal is licensed, your business should be fine.  My guess is that BitInstant has better lawyers than CoinGator (and most other fledgling Bitcoin enterprises) so you may want to at least field this argument with a lawyer.

Localbitcoins.com is about the only place I have found.  It's good for buying, not so good for selling.  I am a web developer and had a client that wanted to use the BitInstant API, but since they intentionally scramble the fields they receive from the API in an effort to stall transactions, and Gareth didn't bother to fix that, and now they have likely been blocked from using ZipZap, we are referring people to localbitcoins and CoinBase if they are in the US.

Just a guess, but I'm betting that regardless of Ursay's assurances, cash deposits are offline because ZipZap finally had enough of the complaints, and BitInstant is desperately seeking another provider.  I've got 2 BTC on it, if anyone wants to bet me . 

What online business of the perceived stature of BitInstant doesn't build and test new features on a test server, then roll it out only after it has been thoroughly tested? The answer is nobody. We have heard the "technical issues" excuses before, and they continue to ring hollow.  ZipZap told them to kick rocks.

No.  Bitcoins have no "stored value".  There is no guarantee that a Bitcoin will be worth anything, ever, and there is no obligation on the part of any party to pay anything to a holder of a Bitcoin.  Like used collector stamps, they only have value because others will buy them (at least at the current time - it is clear that these actions are intended to chill the market by removing buyers from it).  

Well, the initial finding was wrong on its face.  The site doesn't sell or issue anything.  It buys Bitcoins for cash.  It's pretty clear that some other person or entity filed a complaint, either out of ignorance or malice, that contained a factually incorrect description of their business activities.  The state then took this complaint at face value, without investigation, despite asserting that it had conducted an "initial investigation".  Had someone during the "initial investigation" even visited the site, they would have discovered that they do not issue or sell anything.  This is akin to the state telling someone that they must stop buying things on eBay.

Are you a hacker who works for the government?  How would you know this?  Are you laughing right now?

That post wasn't intended to solicit a response from you, but since you took it upon yourself to respond as self-appointed FUD slinger, I thought I would reply.  Enjoy .

I don't know you at all.  Based upon your ignorance, general demeanor, and refusal to consider facts that directly contradict many of your statements, I have absolutely no desire to get to know you either.  In fact I can't imagine that anyone would want to know you.

Nobody said anything about creating a fraudulent account.  More ignorance, incorrect assumptions, and lies.

You obviously haven't tried it, it worked as recently as last week with a card from Advance America (issued by Netspend).

Actually, why don't you see above.  Works just fine, at least with the Advance America cards which are Netspend issued.

See above.  Nothing I have said has anything to do with creating a fraudulent account, you just happen to have fraud on your mind 24/7 apparently.  No one is trying to convince you of anything, as you quite clearly live in your own impenetrable alternate reality.

It is not only possible, but quite easy to keep PayPal at arm's length (see my original post) if you have a modicum of intelligence.  Since you find it so difficult, perhaps you don't meet this requirement.