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Author Topic: TradeHill - Why we no longer accept Dwolla and an open letter to Ben Milne  (Read 35829 times)
borgfish
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July 28, 2011, 09:31:37 PM
 #221

@ yeti sorry for my edits. westernunion is only mentioned, she could have also just withdrawn the money from her giro..

just read my last 3 lines of the prior post. i believe nothing has changed there (since 2009).....
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Yeti
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July 28, 2011, 09:37:14 PM
 #222

@ yeti sorry for my edits. westernunion is only mentioned, she could have also just withdrawn the money from her giro..

just read my last 3 lines of the prior post. i believe nothing has changed there (since 2009).....
Yeah, sorry, I just speed-read... The case is from 2006, so yes, that was before the change. http://www.zahlungsverkehrsfragen.de/ueberweisung.html
These days if there is a fraud, the bank is not allowed to charge back, but they could successfully sue the launderer (although they may not be able to ever repay their debt). I have no actual recent case to support this, but it's in the BGB. So... yeah... it's pretty irreversible right now.

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July 29, 2011, 08:33:38 AM
 #223

[snip>
Quote
Quite playing word games.
Again, the Dwolla business model. "Our transactions are not reversible, except when they are."

I just love JoelKatz' short and to-the-point remarks. Cheesy
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July 29, 2011, 09:15:51 AM
 #224

Say Alice wants to send money to Bob. She types his bank account number and bank code into her bank's online banking website, sends the funds. It's free. She has a regular account, so she pays somewhere around $5 per month for that and nothing per transaction. She could also opt for no monthly fee and $.25 per transaction, but since rent, utilities, insurance, groceries, etc. all goes through that account, she's better off with the former. So the transaction is free and it is non-reversible, once sent it can only be refunded by the payee. Sufficient funds are checked before the transfer is initiated by the bank.

Now when is this going to be a reality? Wow, this has been actually possible for the last 28 years! In a far away country called Germany. And even if you didn't own one of those fancy BTX terminals back in 1983, you could send money on a slip of paper, also free of charge or with a small fee. And what's a check (or cheque)? I've only once got one, in the late 1990s. It felt ancient.
Now suppose Mallory manages to get her hands on Alice's online banking credentials (either by phishing or by actively installing malicious software on Alice's computer) and sends Alice's money to a little company called Mt Gox without authorisation, then exchanges it for easily-laundered Bitcoins. This isn't an entirely hypothetical scenario; it's one of the reasons that Mt Gox's EU bank account was cancelled and they've been having problems accepting SEPA transfers.

Edit: If German bank transactions really are non-reversible that partly explains why there was such pressure to kick Mt Gox out, though their bank was in France and there are some interesting interactions with SEPA rules in that case. I suspect there's something important we're missing though.

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July 29, 2011, 09:22:25 AM
 #225

[snip>
Quote
Quite playing word games.
Again, the Dwolla business model. "Our transactions are not reversible, except when they are."

I just love JoelKatz' short and to-the-point remarks. Cheesy

"At Dwolla, we promise to never reverse transactions.




We just delete them instead."
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July 29, 2011, 09:50:11 AM
 #226

Now suppose Mallory manages to get her hands on Alice's online banking credentials (either by phishing or by actively installing malicious software on Alice's computer) and sends Alice's money to a little company called Mt Gox without authorisation, then exchanges it for easily-laundered Bitcoins.
Now suppose Mallory manages to get her hand on Alice's cash (either by stealing her purse or breaking into her house by installing malicious software on Alice's house alarm system) and sends Alice's cash to a big company called ABCDEFG, then exchanges it for illegal currency (for it's easily-laundered) called bitcoins. What a tragedy... This is why the next phase of fiat money fiasco will be a transformation to coupons with owner's birth certificate serial numbers engraved. This will (eventually) solve the money laundering problem.

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July 29, 2011, 10:30:09 AM
 #227

Now suppose Mallory manages to get her hands on Alice's online banking credentials (either by phishing or by actively installing malicious software on Alice's computer) and sends Alice's money to a little company called Mt Gox without authorisation, then exchanges it for easily-laundered Bitcoins. This isn't an entirely hypothetical scenario; it's one of the reasons that Mt Gox's EU bank account was cancelled and they've been having problems accepting SEPA transfers.

Edit: If German bank transactions really are non-reversible that partly explains why there was such pressure to kick Mt Gox out, though their bank was in France and there are some interesting interactions with SEPA rules in that case. I suspect there's something important we're missing though.
It actually is a European regulation, so I suppose all SEPA-participating countries have these rules now. You are now responsible for making sure the transfer is OK, they won't compare recipient's names as they did before and they won't .
However, in case of phishing, banks are to reimburse their customers. I don't know how far this goes, but banks here will usually happily do that, because it's worse that their customers would lose trust in online banking.

I think the high percentage of fraud could have been the reason for CIC to kick Mt. Gox out, they just didn't want to cover anymore for these huge amounts of fraudulent transactions. However, as has been said before, the Mount should have had multiple accounts in Europe in the first place. It could also be that they just suspected a huge money laundering operation with all the cash coming in and going out to different people and a lack of understanding about Bitcoins and Bitcoin exchanges on the bank's part.

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Raoul Duke
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July 29, 2011, 10:49:20 AM
 #228


<snip>
However, in case of phishing, banks are to reimburse their customers. I don't know how far this goes, but banks here will usually happily do that, because it's worse that their customers would lose trust in online banking.
<snip>

I know a lot of recent cases in Portugal where owners of phished accounts get the hit because the banks say that if they don't protect themselves from banking trojans and such, it's the clients responsability and not the bank... So, even if it's a EU directive it doesn't work like that in Portugal.

But yeah, Portugal is the kind of country where you should pay money transfers between euro accounts if you choose to go to the bank, being the transfers only free if the customers use their homebanking services.  Roll Eyes I guess the bankers here are the worst kind.

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July 29, 2011, 09:43:13 PM
 #229

Dwolla will survive without Bitcoin, they'll just grow more slowly.
Sure they can survive without bitcoin, but they can't survive without their "no chargeback" policy because this is the core of their business model.

I think they can still survive because they are a very viable competition to PayPal, who charges back as well, but on top charges very high fees. I don't think they are going to be viable for bitcoin use though. Anything with a chargeback possibility such ACH, CC, etc. are extremely risky when you exchange e-currencies in real time.
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July 29, 2011, 09:45:02 PM
 #230


I know a lot of recent cases in Portugal where owners of phished accounts get the hit because the banks say that if they don't protect themselves from banking trojans and such, it's the clients responsability and not the bank... So, even if it's a EU directive it doesn't work like that in Portugal.

But yeah, Portugal is the kind of country where you should pay money transfers between euro accounts if you choose to go to the bank, being the transfers only free if the customers use their homebanking services.  Roll Eyes I guess the bankers here are the worst kind.

I am glad they do that in Portugal. This should, in my opinion be the norm everywhere. It is your account, your money, and your responsibility to keep it safe. Often, the merchants and other business end up paying for the broken dishes when somebody is careless with their financial accounts.
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July 30, 2011, 06:24:07 AM
 #231

I think they can still survive because they are a very viable competition to PayPal
It is not difficult to be viable competition to paypal. I haven't used them for years and won't touch them anymore.

As far as your standing on Paxum I also believe there is some solid ground to be suspicious but lets give them a chance. You know, sometimes people change and it might be for good.

I'm also concerned about this forum. There are very high standing individuals in the forum hierarchy that act as children or are too biased in case of certain discussions. This doesn't serve well to the bitcoin community.

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July 30, 2011, 06:13:31 PM
 #232

why couldn't a bitcoin business buy Dwolla?
What for? Bitcoin businesses were interested in Dwolla only because of their "no chargeback" policy! Now it is quite clear they do not have such a technology or know-how in place. So, they are not attractive anymore.

We're now using Paxum at TradeHill which has more fraud protection in place. It doesn't have all the same peer to peer features that Dwolla does but allows payments similar to Paypal. It can be funded in a similar way with a few additional options like checks and wires.   It will also allow you to withdraw funds from an ATM or with a debit card.

For more information go to www.tradehillblog.com or www.paxum.com

The opportunity is to *replace* dwolla with a service that keeps its word. All they are is a webite using the ACH system. Pretty simple stuff really.

We feel confident that Paxum will. They've been in business a lot longer.

Jered

Jered,
I was a big Tradehill fan. With your current switch to Paxum I figured I would sign up and give Paxum a shot.  Well, i was very surprised to see that Paxum REQUIRES its customers to send a photocopy of their identification (such as your passport, or drivers license) to them as proof of your ID.  They also require you to send in a photocopy of a utility bill to prove your address.
I find this a little intrusive.
At first, since I am miner, I rarely had to fund my exchange account with USD, since I mostly sold all the BTC I mined. So, I still relied on Dwolla to receive my funds from Tradehill.
Now, after your announcement that you will no longer use Dwolla for withdrawals, I am forced to stop using Tradehill as my exchange.  I will have to move back to Mt. Gox. I absolutely refuse to use Paxum as a service due to their intrusive background information requirements.
Is there a reason why you chose to stop using Dwolla for account withdrawals?  Its impossible for the end user (like me) to fraud Tradehill out of money when I am simply making a withdrawal. Plus, Dwolla is still ALOT cheaper to withdraw funds, its $.25 compared to Paxums $1.00.

Plus there is the HUGE difference in fees!!!! It costs me $5 to withdraw money from my paxum account to my bank account!! Holy crap! It also costs $5 to send funds to my Paxum account from my bank.  These fees are just ridiculous.  Dwolla, was just .25 to withdraw. So, for me as a miner, when I sold my BTC on Tradehill, it only costs me $.50 TOTAL to send the USD to my Dwolla account from Tradehill, then from Dwolla to my bank. This same transaction will costs me freaking $10!!!!!! Thats a huge increase!

Also, I posted several comments on your Blog, tradehillblog.com stating how Paxum requires such intrusive background information, and it never got "approved" by the moderators. I had thought Tradehill was a respectable company, and was open with its end users, but when you do sneaky things like not approving comments that expose Paxum's invasive TOS, it makes we question your Tradehill's openness.
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July 30, 2011, 06:36:34 PM
 #233

why couldn't a bitcoin business buy Dwolla?
What for? Bitcoin businesses were interested in Dwolla only because of their "no chargeback" policy! Now it is quite clear they do not have such a technology or know-how in place. So, they are not attractive anymore.

We're now using Paxum at TradeHill which has more fraud protection in place. It doesn't have all the same peer to peer features that Dwolla does but allows payments similar to Paypal. It can be funded in a similar way with a few additional options like checks and wires.   It will also allow you to withdraw funds from an ATM or with a debit card.

For more information go to www.tradehillblog.com or www.paxum.com

The opportunity is to *replace* dwolla with a service that keeps its word. All they are is a webite using the ACH system. Pretty simple stuff really.

We feel confident that Paxum will. They've been in business a lot longer.

Jered

Jered,
I was a big Tradehill fan. With your current switch to Paxum I figured I would sign up and give Paxum a shot.  Well, i was very surprised to see that Paxum REQUIRES its customers to send a photocopy of their identification (such as your passport, or drivers license) to them as proof of your ID.  They also require you to send in a photocopy of a utility bill to prove your address.
I find this a little intrusive.
At first, since I am miner, I rarely had to fund my exchange account with USD, since I mostly sold all the BTC I mined. So, I still relied on Dwolla to receive my funds from Tradehill.
Now, after your announcement that you will no longer use Dwolla for withdrawals, I am forced to stop using Tradehill as my exchange.  I will have to move back to Mt. Gox. I absolutely refuse to use Paxum as a service due to their intrusive background information requirements.
Is there a reason why you chose to stop using Dwolla for account withdrawals?  Its impossible for the end user (like me) to fraud Tradehill out of money when I am simply making a withdrawal. Plus, Dwolla is still ALOT cheaper to withdraw funds, its $.25 compared to Paxums $1.00.

Plus there is the HUGE difference in fees!!!! It costs me $5 to withdraw money from my paxum account to my bank account!! Holy crap! It also costs $5 to send funds to my Paxum account from my bank.  These fees are just ridiculous.  Dwolla, was just .25 to withdraw. So, for me as a miner, when I sold my BTC on Tradehill, it only costs me $.50 TOTAL to send the USD to my Dwolla account from Tradehill, then from Dwolla to my bank. This same transaction will costs me freaking $10!!!!!! Thats a huge increase!

Also, I posted several comments on your Blog, tradehillblog.com stating how Paxum requires such intrusive background information, and it never got "approved" by the moderators. I had thought Tradehill was a respectable company, and was open with its end users, but when you do sneaky things like not approving comments that expose Paxum's invasive TOS, it makes we question your Tradehill's openness.

This just in, Dwolla was a scam.   This also just in, tradehill is probably very busy and moderating their blog entries is probably the last thing on their mind.  Jeez people are such winey babies.
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July 30, 2011, 06:44:43 PM
 #234

I am glad Tradehill is using Paxum.  I have used them for a while (less than a year, but steady) for other sites and work, I am glad to have them on board with Tradehill.    I worry about the fees more than trust Wink

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July 30, 2011, 06:50:18 PM
 #235

I am glad Tradehill is using Paxum.  I have used them for a while (less than a year, but steady) for other sites and work, I am glad to have them on board with Tradehill.    I worry about the trust more than fees Wink

Fixed
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July 30, 2011, 06:51:00 PM
 #236

I am glad Tradehill is using Paxum.  I have used them for a while (less than a year, but steady) for other sites and work, I am glad to have them on board with Tradehill.    I worry about the fees more than trust Wink

The fees are just to high for me. With difficulty increasing, and edging profits down, an increase in the fees I pay lowers my return. Most of my transaction were withdrawals, which is impossible for the end-user to fraud, so Paxum is just to expensive for me.
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July 30, 2011, 06:53:42 PM
 #237

The info they have required from people has been how they have operated with trust, Tradehill is dealing with a ton of real cash that they need to be 100% sure is protected.

I am sure as time goes deals can be worked without with Tradehill and Paxum in ways that Dwolla seems to be working out with Gox, and that can make fees go down and possibly ID requirements for whiners, to go down.

I think people need to let that 'this is all anonymous' shit go once they want to bring 'real world' money into the picture.   At least for now.  In the name of security :/


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July 30, 2011, 06:54:28 PM
 #238

I am glad Tradehill is using Paxum.  I have used them for a while (less than a year, but steady) for other sites and work, I am glad to have them on board with Tradehill.    I worry about the fees more than trust Wink

The fees are just to high for me. With difficulty increasing, and edging profits down, an increase in the fees I pay lowers my return. Most of my transaction were withdrawals, which is impossible for the end-user to fraud, so Paxum is just to expensive for me.

Promote locally, sell locally.  What do you suggest tradehill do? They are trying their best.
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July 30, 2011, 06:57:24 PM
 #239

I am glad Tradehill is using Paxum.  I have used them for a while (less than a year, but steady) for other sites and work, I am glad to have them on board with Tradehill.    I worry about the fees more than trust Wink

The fees are just to high for me. With difficulty increasing, and edging profits down, an increase in the fees I pay lowers my return. Most of my transaction were withdrawals, which is impossible for the end-user to fraud, so Paxum is just to expensive for me.

Promote locally, sell locally.  What do you suggest tradehill do? They are trying their best.
Heres a good medium:
Tradehill could only allow Paxum as a funding source to send money to the exchange.  This eliminates end user fraud. Sure the fees would be a little higher, but for me thats acceptable for the security in SENDING money to the exchange.
Tradehill should still allow Dwolla for withdrawals to the end user.  Since there is no way the end user can fraud the exchange out of money by doing a withdrawal, theres no risk in keeping this as an option.  This way, miners like me (that mostly sell BTC) can still enjoy the cheap fees Dwolla offers, and Tradehill is not at any risk of being frauded.
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July 30, 2011, 06:59:47 PM
 #240

Now, after your announcement that you will no longer use Dwolla for withdrawals, I am forced to stop using Tradehill as my exchange.  I will have to move back to Mt. Gox. I absolutely refuse to use Paxum as a service due to their intrusive background information requirements.
Is there a reason why you chose to stop using Dwolla for account withdrawals?  Its impossible for the end user (like me) to fraud Tradehill out of money when I am simply making a withdrawal. Plus, Dwolla is still ALOT cheaper to withdraw funds, its $.25 compared to Paxums $1.00.

I'm with CubedRoot on this one.  I have USD stuck on TradeHill that I'll have to to trade back to BTC just to get it out and resell on MtGox, paying commissions again to both.  I understand preventing inbound transfers, but by getting rid of outbound you screwed quite a few of us.

Edit:  My role in this is just a miner with a measly 1.3GH.  If I can't get funds out on a regular basis without paying a fee equal to day's worth of mining this isn't going to work.  I feel for you folks mining off a single card.
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