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Author Topic: TradeHill - suspension of US wire deposits / withdrawals  (Read 10704 times)
Jered Kenna (TradeHill)
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January 04, 2012, 08:05:55 PM
 #1

http://tradehillblog.com/2012/01/04/announcement-us-wire-deposits-and-withdrawals-are-temporarily-suspended/

Dear Clients,

We’ve had an issue with our Citibank account and we’ll not be accepting
wire or ACH deposits or executing check, wire or ACH withdrawals for a
short period of time. All the funds are accounted for and we’ll re-commence
operations by Monday or Tuesday next week.

We’ve had an issue or two in the past with banking so we understand the
tension this causes for customers and us. However, we’ve always sorted out
it. There hasn’t been one incident where transactions weren’t executed
properly and accurately once the issue was solved.

If you have any questions, don’t hesitate to send an email to
info@tradehill.com.

Thank you very much!

Regards,
The TradeHill Team

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January 04, 2012, 08:10:06 PM
 #2

the question is "why"?
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January 04, 2012, 08:14:19 PM
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the question is "why"?

It is all part of the market manipulation plan. Grin
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January 04, 2012, 11:18:54 PM
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the question is "why"?

I suspect the answer is somewhere along the lines of "banks suck".  But we all knew that already, right?  Isn't that why we support bitcoin?

My wife does payroll / HR, and she has problems with banks all the time, and that's for "traditional" businesses.  You add bitcoin and it's shady reputation into the mix, and I'm surprised crap like this doesn't happen more often.

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Jered Kenna (TradeHill)
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January 05, 2012, 06:53:24 AM
 #5


If I were only allowed to give a two word reply that would be it.

They won't give me an answer which is unfortunately somewhat normal.
We're resolving it now but it's not simple to mix Bitcoin and conventional finance.
If you lie to the bank about what you do then it's easy enough but it will come back to bite you.
We've been 100% honest and transparent with the banks and while I believe it's the correct way to go about things it takes a considerable amount of time and brings a different set of problems. The amount of volume we do it would be idiotic to try and hide it.

I've explained Bitcoin to more bankers and surprisingly very few know anything about it.
It seems it's still a lot bigger in the tech scene than finance still at this point.

Jered

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January 05, 2012, 07:02:14 AM
 #6

They won't give me an answer which is unfortunately somewhat normal.

Bummer.

Is there some reason why this unreliability can't be countered with redundancy?  Like having accounts at three or four banks?

The printing press heralded the end of the Dark Ages and made the Enlightenment possible, but it took another three centuries before any country managed to put freedom of the press beyond the reach of legislators.  So it may take a while before cryptocurrencies are free of the AML-NSA-KYC surveillance plague.
Jered Kenna (TradeHill)
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January 05, 2012, 07:17:06 AM
 #7

They won't give me an answer which is unfortunately somewhat normal.

Bummer.

Is there some reason why this unreliability can't be countered with redundancy?  Like having accounts at three or four banks?


We've gone through a few banks. We haven't had any instances where the banks have said "you're ripping people off or doing something illegal" but they constantly evaluate the risk and they view Bitcoin as about as high risk as you can get. Even if we're running millions through a month it's still small potatoes to them. Additionally you'll never talk to the people that actually make these decisions. I doubt there's an exchange or any business that involves a lot of liquid capital that isn't constantly being attacked from every angle. Bitcoin is obviously an especially good target due to it's non reversible nature. It's a testament to our code and staff that we haven't been hacked or defrauded (except Dwolla) but even if you're constantly hit by attempted fraud which fails the bank won't be happy.

Unfortunately banks need to devote floors or even buildings to fraud prevention. It's an industry that I didn't realize the size of until I became personally involved. If you're not being hit then grow in size and reevaluate. I believe paypal loses around .5% annually to fraud and all of their practices we hate such as freezing my account when I sent a guy $0.25 I acidently shorted him on a previous transaction are aimed at preventing fraud.

If we lose half a percent to fraud we can't stay in business due to our margins being considerably smaller than Paypal's. So we need to be even more careful. The good news is we've been successful at it. I haven't sent a single Bitcoin or Dollar to a Nigerian prince to help get his dead uncle's funds in to the US.

Jered

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January 05, 2012, 07:36:42 AM
 #8

We use Chase... I've had Chase lock us out for the stupidest reasons.

I received a QuickPay from somebody for $2000, and Chase locked out our business account for most of a day because they wanted that person to go into a Chase branch to show their identity before they would release it.  This person SENT us money, not the other way around... and our balance with Chase at the time was orders of magnitude larger than $2000.

Our balance with Chase, put it another way, is enough that we have a personal banking rep who will practically come to my house and deliver me a 20 dollar bill so I don't have to go to the ATM if I ask him to.  So naturally, I get to breathe down his back over the issue and tell him how stupid this is, and he goes to bat for us with Chase, which meant we were only locked out for 3/4 of a day instead of longer.  I grilled him... "the website for Chase QuickPay says it's ideal for receiving internet payments, and now we go do exactly that and suddenly we are locked out of X dollars while some guy in California shows his id at a branch???!?!?".  Yes, i suppose our personal banking rep deserves far more respect than I offered him that day, because it is his job to basically wait on us to help chase keep our business, and he knows I'm getting the shaft and he's just getting it from both ends.

Three days later, the exact same thing happens.  That time, it was only half a day until we were re-enabled.  At that point, I'm like, screw Chase quickpay I'm not touching this service ever again.

Oh, yeah, there was the time Chase declined an ATM withdrawal.  So I tried a couple more times at a couple more ATM's.  When I called Chase, they were like, "we locked you out because there were too many failed ATM withdrawal attempts on your account, and our policy is we will not unblock you for at least 24 hours while we sort it out."  I was like... what about the first attempt?  There would have not been any further attempts if the first one went through.  Their answer: "sorry... try us again in 24 hours."  And that's that.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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January 05, 2012, 09:20:20 AM
 #9

Sort of related advice:
Whenever funding your tradehill account with paxum, either use bitinstant or go to mtgox instead.

I made the mistake of trusting tradehills promise of "up to 24 hours". It took them almost 2 days to actually enable the funds into my account. While waiting the price rose more than $1.

When asked the tradehill support about the delay they replied:
Quote
I totally understand your concern and frustration with us. However, at this moment, we are processing these transactions manually and do not always have somebody available to do this.
Apparently a whole workday long no one was available to add funds, I guess I have consider myself lucky that someone did it on the second work day. If someone runs an exchange like a sporadic hobby, please be so honest and state this clearly on your website.

At the same time I transferred some funds to mtgox also using paxum. It took them about less than a minute to have the available in my account.
So my personal advice: use bitinstant or mtgox
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January 05, 2012, 10:40:58 AM
 #10

We use Chase... I've had Chase lock us out for the stupidest reasons.

...

Their answer: "sorry... try us again in 24 hours."  And that's that.

Um, so the obvious question here is, why are you still using Chase?

The printing press heralded the end of the Dark Ages and made the Enlightenment possible, but it took another three centuries before any country managed to put freedom of the press beyond the reach of legislators.  So it may take a while before cryptocurrencies are free of the AML-NSA-KYC surveillance plague.
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January 05, 2012, 05:20:47 PM
 #11

I was interested to see this Tradehill communique on MaxKeiser.com in my morning scans.  Posted by Max.  I know that these guys are interested in Bitcoin, but so far their coverage has been fairly mute.  I suspect that (like myself), they are hesitant to encourage people toward Bitcoin until it is more stable...insofar as a newbie is unlikely to lose a great deal of money by screwing with it that is.

Someone in the comments section of the maxkeiser blog mentioned that CITI has a habit of shuffling incoming money through multiple accounts.  I've been aggravated that my early wires were tradeble within hours, but for the last four months or so, it's been days from the time WF wires money to CITI to when Tradehill claims to 'see' the money in their account (according to their support.)  I did not know who to blame, exactly, so I neglected to blame anyone.  I still don't know who to blame but if the poster on the maxkeiser blog is right, it's looking a lot like CITI is the guilty party.


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January 05, 2012, 06:07:06 PM
 #12

We use Chase... I've had Chase lock us out for the stupidest reasons.

...

Their answer: "sorry... try us again in 24 hours."  And that's that.

Um, so the obvious question here is, why are you still using Chase?

Chase has some pretty awesome features we really appreciate.  Our solution to Chase's knee jerk security is just to put our eggs in more than one basket.  Example, we don't run our payroll out of Chase.  We use a good local credit union for lots of that stuff (which also has free instantaneous local transfers to other credit union members).  We get the best of both worlds.

For example, I wired money to MtGox yesterday from Chase, which arrives at blinding speeds.  I clicked "send" at 2:31 pm, to wire to JAPAN, and got an e-mail from MtGox, "Funds have been received" at 6:50pm.  That was 4 hours and 20 minutes from the time I decided "I'd like some MTGUSD" until the time I had it ready to burn!  I threw another $50k into the pile, waiting off the orderbook just in case we get some price drops (and maybe that will never happen... in which case I'll probably use that 50k to offset trades anytime I sell BTC in person, so they aren't actually buying my BTC).  That fast transfer would have never happened from my credit union, who doesn't offer business services like that, I'd have had to call in and they'd have plugged through it manually.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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January 05, 2012, 07:03:36 PM
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Sort of related advice:
Whenever funding your tradehill account with paxum, either use bitinstant or go to mtgox instead.

I made the mistake of trusting tradehills promise of "up to 24 hours". It took them almost 2 days to actually enable the funds into my account. While waiting the price rose more than $1.

I've had beefs with Tradehill not living up to their published timings.  OTOH, they have vastly exceed them at other times.  (Unfortunately for me, this was more common on incoming wires two quarters ago when I was trying, unsuccessfully, to catch the falling knife.)

When asked the tradehill support about the delay they replied:
Quote
I totally understand your concern and frustration with us. However, at this moment, we are processing these transactions manually and do not always have somebody available to do this.
Apparently a whole workday long no one was available to add funds, I guess I have consider myself lucky that someone did it on the second work day. If someone runs an exchange like a sporadic hobby, please be so honest and state this clearly on your website.

At the same time I transferred some funds to mtgox also using paxum. It took them about less than a minute to have the available in my account.
So my personal advice: use bitinstant or mtgox


So one can either have trouble getting USD into the exchange, or getting USD out of the exchange.  Nice to have choices I suppose.  Unfortunately both eventualities can be costly.


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January 05, 2012, 07:14:19 PM
 #14

For example, I wired money to MtGox yesterday from Chase, which arrives at blinding speeds.  I clicked "send" at 2:31 pm, to wire to JAPAN, and got an e-mail from MtGox, "Funds have been received" at 6:50pm.  That was 4 hours and 20 minutes from the time I decided "I'd like some MTGUSD" until the time I had it ready to burn!
I find it amazing that this is considered "blinding speed." Wink

It only takes light a little over 8 minutes to reach the Earth from the Sun…it's amazing it takes banks hours to transfer a little bit of data around the Earth.

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January 05, 2012, 07:26:51 PM
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not so long ago wires used to take 3-5 business days, it is indeed amazing that now most wires get through within 24hr. period
Jered Kenna (TradeHill)
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January 05, 2012, 08:57:30 PM
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not so long ago wires used to take 3-5 business days, it is indeed amazing that now most wires get through within 24hr. period

When I lived in Chile you could send money from one bank account to another for free instantly online.
The US has the worst system that I'm aware of.

There isn't much of a reason for it  to take so long or be so easy to screw up.

Jered

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January 05, 2012, 09:18:34 PM
 #17

I find it amazing that this is considered "blinding speed." Wink

Certainly blinding compared to using Dwolla.  I want to make sure it's clearly known that wires to exchanges often mean same day trading.  Wires are attractive to people doing large amounts because there's fewer people they need to trust.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
Jered Kenna (TradeHill)
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January 05, 2012, 09:29:38 PM
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I find it amazing that this is considered "blinding speed." Wink

Certainly blinding compared to using Dwolla.  I want to make sure it's clearly known that wires to exchanges often mean same day trading.  Wires are attractive to people doing large amounts because there's fewer people they need to trust.

Banks absolutely hate wires though because they're essentially the only non reversible form of payment they have.

Jered

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January 05, 2012, 10:09:06 PM
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I think the banks are the biggest danger to Bitcoin in the near future. If they all started to decide that they don't want anything to do with bitcoins, the exchanges would be totally frozen out.

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January 05, 2012, 10:25:47 PM
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I think the banks are the biggest danger to Bitcoin in the near future. If they all started to decide that they don't want anything to do with bitcoins, the exchanges would be totally frozen out.

It's hard for me to believe that all financial institutions would abandon service of Bitcoin related enterprises absent some legislative action (whereupon I have no doubt that they would do so in a heartbeat.)  It's a really interesting question in my mind about what would happen with the value of BTC in that scenario.  I could see it going several different ways.  Among them:

If demand is there it could get fairly pent up and explosive.  After all, banks (mostly) don't want anything to do with drugs which has contributed to them absurdly valuable.  Even though drugs are a physical commodity and thus cumbersome to supply, they are still plenty available and the demand ensures a thriving market.

On the other hand, I sense that a good bit of the demand is by day-trader types who have no real interest in holding BTC and see no value in doing so other than to flip them.  That demand would evaporate without convenient exchanges which could depress the value of BTC considerable.


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