While the Bitcoin community is trying to adjust the new regulatory rules and scrutiny, things aren’t going as well as they used to. Government agencies are targeting Bitcoin traders and in a latest development Bitcoin exchange Tradehill has suspended its platform indefinitely.
Over the weekend, the exchange for virtual currencies such as Bitcoin, entered into a trading halt, temporarily freezing all trades while it deals with “banking and regulatory issues”. Through a statement on its website which gives little explanation of the reasons, Tradehill said that the decision was not made lightly, and that it regrets having to take such action.
“We have recently made the decision to temporarily suspend trading on the Tradehill platform, due to banking and regulatory issues. This decision has not been made lightly and we regret having to take such action,” the company said on its website. “However, we embrace the silver lining of our situation and plan to take this opportunity to upgrade, improve, and polish our trading platform.”
Many of you have come to know Tradehill over the last few months. The San Francisco-based stock exchange platform, founded in June 2011, was re-launched in March this year with a focus towards accredited investors. The Bitcoin digital currency exchange of choice was providing a reliable service to help you exchange currency in the Bitcoin market. The company received $400,000 in seed funding from angel investors and executed over $1 million in Bitcoin trades within its first month.
It should be noted that the Tradehill platform was registered with FinCEN this month and has been actively engaged with banks and regulators to further develop future products. IAFCU’s decision to terminate business with Bitcoin might lead to the suspension of the Tradehill services.
“Tradehill’s integration with IAFCU allowed for clients to buy Bitcoin with a balance in an account with their own name,” says Robin Kunimune, public relations manager at Tradehill. “This allowed clients to trade Bitcoin with funds that were stored in a federally insured institution.”
Tradehill informed users last week that all their accounts would be transferred to a U.S. credit union to make it easier to complete transactions.
Growing alarm in virtual currency
The growing interest in virtual currency, which is issued by a central bank, has increased its regulation. Earlier last week, Bitcoin community members met with regulators in Washington, as part of government efforts on how to regulate the currency and other virtual currency.
Earlier in August, the New York Department of Financial Services sent several subpoenas to Bitcoin companies and issued a notice of inquiry on virtual currencies.
One of the most controversial aspects about Bitcoin is that transactions in this currency are not taxable to the US government. Germany was in fact one of the first country to try to settle the matter to withholding taxes apply this global market to recognize the new currency as a “private currency”.
Bitcoin companies getting shut down by banks and credit unions in the U.S. is becoming a repetitive event and Tradehill is not the only exchange to encounter government’s banking and regulatory troubles. One of the largest Bitcoin exchange on the Web, Mt. Gox, had to suspend US dollar trading for two weeks in June and July to make some adjustments. The trading platform also suffered a number of DDoS attacks in the past.
http://siliconangle.com/blog/2013/09/03/the-us-regulatory-side-effect-tradehill-stops-bitcoin-trading/?angle=silicon
