More crap to deal with - Dwolla Reverses TradeHill Transactions

[jgarzik]

Seriously, if you shut off Dwolla as a means to withdraw USD from Trade Hill, you're game over.

I doubt that is a big issue.

It is transfers going in the other direction -- deposits -- where scammers can cause problems.

Generally, going from bitcoins -> { something else } is pretty easy.  I'm surprised that mtgox, TradeHill and others have not bothered with PayPal as a withdrawal method.  Paying with PayPal is certainly safe, and the exchange's account would be 100.0% fraud-free.

[1713304551]

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[hugolp]

Hugolp
I dont see either how this is going to be spin off as a Bitcoin failure. Its a failure of Dwolla, a dollar service.

Regardless if true or not, The Bitcoin haters and the media in general will more than happy to run the headlines

"Another Bitcoin Major Exchanged Gets Hit"

" How Safe is Bitcoin When Primary Exchanges Are Victims"

"Another Bitcoin Scam".....


Trade Hill sat on this for two weeks, this has zero to do with notifying other exchanges, that has more than likely been done privately. It's about public pressure that is going to back fire. Dwolla isn't going to take a hit on this other than the several hundred people here on this forum.

Bitcoin and Trade Hill with take a hit Internet wide.


BCX

Honestly, if they did that it would be even possitive. It could be easily taken back to them to show that the press has an anti-bitcoin bias and get people interested into why they have such bias so they learn about Bitcoin.

It would be a very bad move from them and very good for us.

[bitcon]

Seriously, if you shut off Dwolla as a means to withdraw USD from Trade Hill, you're game over.

I doubt that is a big issue.

It is transfers going in the other direction -- deposits -- where scammers can cause problems.

Generally, going from bitcoins -> { something else } is pretty easy.  I'm surprised that mtgox, TradeHill and others have not bothered with PayPal as a withdrawal method.  Paying with PayPal is certainly safe, and the exchange's account would be 100.0% fraud-free.

yeah, paypal wants to see bitcoin succeed.

[JoelKatz]

I am talking about reality and in the "Reputation" world, truth has nothing to do with a good reputation.

Short term, you are right. But long term, you are wrong. Protecting your reputation is a really lousy reason for doing the wrong thing. Eventually, you just get a well-deserved reputation for doing the wrong thing.

[Nagle]

I thought Dwolla can't be reversed? (I've never used it and don't know much about it)

that's what everyone thought, apparently dwolla changed their ToS without any notice

Dwolla doesn't have published terms of service. Which means the standard Uniform Commercial Code provisions apply. Those don't usually allow for repudiation because of a third party default. It's Dwolla's problem to find the party and collect from them.
<p>
That's the problem with dealing with a pseudo-bank company that's really a couple of guys in a shared hacker space in Iowa. They may not have the financial resources to deal with their own problems.

[Serge]

@Serge

I am the user BitcoinEXpress, I have zero to do with Camp BX.

Let me make this clear, I think Trade Hill is a straight up service run by straight people.

I am talking about reality and in the "Reputation" world, truth has nothing to do with a good reputation.


This will be spun as a Bitcoin failure, tomorrow when you see the stories you will realize it would have been better for Trade Hill to continue to negotiate quitely for their $37K.

That's all I saying.

Once again, I am not Camp BX.

who said anything about you being campbx?  i responded to Keyur and to you in separate replies. Other than making stupid headlines for media to pickup can't your read? Your posts in this thread been more damaging than anything else.

[bitcon]

market to be down 10% by this time tomorrow.  any side bets?

[Serge]

@Serge

I am the user BitcoinEXpress, I have zero to do with Camp BX.

Let me make this clear, I think Trade Hill is a straight up service run by straight people.

I am talking about reality and in the "Reputation" world, truth has nothing to do with a good reputation.


This will be spun as a Bitcoin failure, tomorrow when you see the stories you will realize it would have been better for Trade Hill to continue to negotiate quitely for their $37K.

That's all I saying.

Once again, I am not Camp BX.

who said anything about you being campbx?  i responded to Keyur and to you in separate replies. Other than making stupid headlines for media to pickup can't your read? Your posts in this thread been more damaging than anything else.

You said you would never use any of "My Services" I do not offer any services, just wanted to make sure you weren't confusing me with them.

BitcoinEXpress
whenever something comes up from you, I will make sure not to use it! just because of your comments in this thread.   

I have nothing bad to say about CampBX.   
pretty lame to try to mixup me addressing you with someone else.

[Trader Steve]

market to be down 10% by this time tomorrow.  any side bets?

Market could be up too. If more people learn about bitcoin more people may buy. If people hear about bitcoin and are not interested they simply don't buy. A percentage will like what they see and end up buying potentially causing a net gain of purchasers.

[Trader Steve]

market to be down 10% by this time tomorrow.  any side bets?

Market could be up too. If more people learn about bitcoin more people may buy. If people hear about bitcoin and are not interested they simply don't buy. A percentage will like what they see and end up buying potentially causing a net gain of purchasers.

Like any good forecaster, I predict that bitcoin will either be up or down tomorrow. 

[sequence]

Dwolla sucks!, I told you guys in my first post ever in this forum.  What surprises me is how clueless Dwolla is about this significant fraud. A few months back I got my account suspended  because of a bank error and they yelled FRAUD!! I had to fight diligently to get my account back. They had me talking to one guy named Ben over phone and email, gave me the run around and now this!  

[Jered Kenna (TradeHill)]

All we ask and I assume everyone can agree:

1) If chargebacks exist don't claim your payment is non reversible
2) If you're doing a chargeback tell the merchant. Don't just debit the account and then act like it didn't happen.

All it takes is clear communication.

I Agree! 

Jared - how exactly did Dwolla take this money back from you?  Did they take it out of your Dwolla balance?

Yes, without mentioning it and they dodged us when we tried to track down where the funds went.
The transfers simply changed and the funds went poof. We had to write a program to audit all their data and find where it went.

Jered

[Smalleyster]

market to be down 10% by this time tomorrow.  any side bets?

Market could be up too. If more people learn about bitcoin more people may buy. If people hear about bitcoin and are not interested they simply don't buy. A percentage will like what they see and end up buying potentially causing a net gain of purchasers.

Like any good forecaster, I predict that bitcoin will either be up or down tomorrow. 

I predict it will stay flat (within 2% of current ~$13.80 8^)

[Seraphim401]

i don't know about anyone else, but this is conjuring feelings of being GOXED all over again...........

That's the point I was trying to get across to Jered aka Tradehill.

Customer's accounts were not affected, so why make it public other than trying to place pressure on Dwolla. It's not coming across the way TH intended. By tomorrow afternoon, there will massive reports internet wide about another scandal with Bitcoin.

Bitcoin didn't need this and this wasn't thought out very well.



In a way, the more I think about it, the more I get pissed.

BCX

I have the same thoughts. Things were getting into rally mode and this could seriously mess things up.

When were things getting into rally mode?
Quit thinking about your own wallet for a change,one of the best exchanges out there just got robbed!
These guys are very open ,so is it not to be expected that they would be pissed off at someone who's not?

Also a big fuck you to Dwolla from the EU!

[NamelessOne]

I guess you weren't paying attention to the general pressure, and analysts all saying the same thing about impending rallies. One did happen to 14.7, though it fizzled, no doubt. Dwolla is the victim here according to TradeHIlls blog, they repeatedly say 'dwolla was scammed of'.

"It is unfortunate that Dwolla is the victim of fraud and we would like to work with them to resolve this."

So unless they worded that very poorly, or I'm misreading it, I see nothing about TH being victims. They seem to be helping Dwolla. I commend them for being open as it adds value to their service. They also could have resolved this issue and then gone public. Its more that the timing sucks. And yes, I am thinking with my wallet as are other people. This is about a currency after all, and the survival of that currency.

[bitrick]

They also could have resolved this issue and then gone public.

But what if Dwolla is stonewalling for a long time, leaving you with no reason to believe it will ever be resolved? In that case it is reasonable to go public because a large theft appears to have occurred and the public should be aware of that, in my opinion.

Consider this. Let's say Dwolla was moving $1M/day. Let's pull a number out of thin air and suppose the average transaction was $1000. That's 1000 transactions per day. At 25 cents/tx thats only $250 per day, not including expenses.

$37,000 may represent more profit than Dwolla has ever earned on Bitcoin transactions and then some.

As JoelKatz has explained very well, the entire Dwolla business model may be fatally flawed, and if this transaction is what made Dwolla realize that, then it is conceivable that they have just decided to try to recover that money by what ever means necessary.

Their reputation is irrelevant going forward if their business model is dead anyway. Why end the business with a guaranteed big loss, when you can transfer that loss to Tradehill and hope for the best in arbitration?

I hope this is resolved in Tradehill's favor, but given Dwolla's lack of response so far, I doubt Dwolla will return the money voluntarily.

[Smalleyster]

My guess is that Dwolla is gone. This is their non-response they sent this afternoon:

Dwolla Support support@dwolla.org to me
   
show details 1:27 PM (3 hours ago)
   
__________________________________
Please type your reply at the top of the email...
Charise
JUL 26, 2011  |  12:27PM CDT
David,

We'd be happy to walk you through our processess.

Dwolla has a return and dispute process which is pretty straight forward but in the past has been fairly manual.

Is there any specific question I could possibly answer? I'd be happy to do so.

+++++++++++++++++++++

David
JUL 26, 2011  |  08:46PM CDT
Original message
Please make me feel you are "doing the right thing" in reference to the following line of discussion in the bitcoin community.

http://forum.bitcoin.org/index.php?topic=31712.0

I am a relatively new client of yours and I used your services to interact with TradeHill, among others. I am at this moment extremely nervous about using your services unless and until this matter is cleared up.

Thank you

+++++++++++++++++++++

This screams of avoiding the subject. I am not sure what my response to their non-response will be.

I think the ever astute JoelKatz has nailed it on the head, they have no reserve on hand nor any plan in place to solve this type of problem.

[Smalleyster]

market to be down 10% by this time tomorrow.  any side bets?

Market could be up too. If more people learn about bitcoin more people may buy. If people hear about bitcoin and are not interested they simply don't buy. A percentage will like what they see and end up buying potentially causing a net gain of purchasers.

Like any good forecaster, I predict that bitcoin will either be up or down tomorrow. 

I predict it will stay flat (within 2% of current ~$13.80 8^)

LOL! It's now about a day later 5:53pm Tallahassee Fl time, and the price @ MtGox is...13.89!!!

The naive forecast wins again!

[MilkMan]

Dwolla suspended my account that had over $400 in it and now my money is gone.

Fuck, I can't believe that. I've always been suspicious of Tradehill and I guess I was right. Mt. Gox all the way or any other alternative.

[Smalleyster]

Dwolla suspended my account that had over $400 in it and now my money is gone.

Fuck, I can't believe that. I've always been suspicious of Tradehill and I guess I was right. Mt. Gox all the way or any other alternative.

Do you read for content? What did Tradehill do wrong?