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Author Topic: Bitinstant- Paxum Temporarily Suspended  (Read 12376 times)
Yankee (BitInstant)
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Charlie 'Van Bitcoin' Shrem


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February 11, 2012, 05:33:07 PM
 #1

Yesterday evening we received the email below.

tl;dr Paxum suspended our account at moments notice.

EDIT: From this post it seems like any accounts Bitcoin related are being closed https://bitcointalk.org/index.php?topic=63431
We're working with Paxum to get this up asap.

EDIT 2:
I wanted to point out one more thing:

An executive at Paxum has been working with me since this happend. They have been more surprised at this than we were. Not only that, but they have been super responsive and extremely helpful in this matter.
I harbor no bad feelings toward them. Licensing takes years to obtain but can take minutes to lose.

More and more information is coming to light and although I cannot go into details *yet* alot of what has been said above is not accurate.

Paxum and I have a few conference calls with their partners set up for this week and if all goes well, we can have this resolved and back online in 1-2 weeks

-Charlie

---------- Forwarded message ----------
From: Removed
Date: Fri, Feb 10, 2012 at 6:21 PM
Subject: Bitcoin termination
To: charlie@bitinstant.com

Dear client,

Effective immediately; Paxum Inc can no longer accept any accounts related to Bitcoin or Bitcoin Exchange. All current Bitcoin accounts have been closed and may no longer perform any transaction. Account holders will be able to withdraw their funds via wire transfer.
 
Best regards,

<Removed>
<Removed>
www.paxum.com
---------- End of message ----------


Notice how the "Subject: Bitcoin termination" and not 'Bitinstant Termination'

A few more emails went back and forth and Paxum told us ".....suspend your account due to new bank regulations."
They also said "We wish to impress upon you the fact that we are constrained to act in this manner, and we will do everything in our power to reinstate your account as soon as soon as it will be possible to do so."

I just booked a flight to Paxum HQ in Canada for next week, and I hope to have it reinstated in the coming weeks.

What we don't know is, whoever is behind this new 'bank regulations' is attacking Bitcoin or related.

-Charlie

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
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BitPay Business Solutions
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February 11, 2012, 06:17:13 PM
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Charlie I hope you can get to the bottom of this.  Your business should not be affected since you don't handle any bitcoins.  You strictly move USD around and have a licensed partner to do so.

Although once you get your account reinstated, I don't know why you would need it, because all the exchanges that you would link to won't be with Paxum anymore :/

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Yankee (BitInstant)
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Charlie 'Van Bitcoin' Shrem


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February 11, 2012, 06:39:49 PM
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Charlie I hope you can get to the bottom of this.  Your business should not be affected since you don't handle any bitcoins.  You strictly move USD around and have a licensed partner to do so.

Although once you get your account reinstated, I don't know why you would need it, because all the exchanges that you would link to won't be with Paxum anymore :/

I know, thats what pisses me off the most.

People really don't know how to read and it astonishes me how some incompetent fools can be in such high positions. 
They assume 'bitinstant' means bitcoin.

Never the less, I will get to the bottom of this.

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
Mike3574
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February 12, 2012, 08:47:58 AM
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Charlie I hope you can get to the bottom of this.  Your business should not be affected since you don't handle any bitcoins.  You strictly move USD around and have a licensed partner to do so.

Although once you get your account reinstated, I don't know why you would need it, because all the exchanges that you would link to won't be with Paxum anymore :/

I know, thats what pisses me off the most.

People really don't know how to read and it astonishes me how some incompetent fools can be in such high positions. 
They assume 'bitinstant' means bitcoin.

Never the less, I will get to the bottom of this.

I wish you all the luck in the world man. This is totally bogus! But even if the exchanges won't deal with Paxum anymore that doesn't mean you have to eliminate it from your business model. You are merely a go between that allows funds to get into the exchanges. The funds go from Paxum to BitInstant and then to MtGox, etc. I see no reason, that if you wanted to, you couldn't have 100 different payment options for people to fund their exchange accounts even if they are not supported by that exchange. I mean, you even offer cash deposits! Am I correct in my logic here?

All Best,

Michael
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February 12, 2012, 11:01:49 AM
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Unfortunately we find a lot of potential payment providers do misunderstand our business repeatedly, even after having months of communication with us.
Even though a quick visit to our website will show we only transfer USD around, we still get this common misunderstanding and it has caused us a whole pile of problems.
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February 12, 2012, 11:07:32 AM
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Unfortunately we find a lot of potential payment providers do misunderstand our business repeatedly, even after having months of communication with us.
Even though a quick visit to our website will show we only transfer USD around, we still get this common misunderstanding and it has caused us a whole pile of problems.

It's totally, utterly ridiculous! I suppose they don't even know how to read!
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1ngldh


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February 12, 2012, 12:40:22 PM
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Go get 'em, Charlie!

Mining Rig Extraordinaire - the Trenton BPX6806 18-slot PCIe backplane [PICS] Dead project is dead, all hail the coming of the mighty ASIC!
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February 12, 2012, 03:02:25 PM
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...and I was just yesterday thinking about signing up to paxum. Glad I didn't!!
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Let's talk governance, lipstick, and pigs.


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February 12, 2012, 03:09:55 PM
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What we don't know is, whoever is behind this new 'bank regulations' is attacking Bitcoin or related.
This would be quite newsworthy information.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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February 12, 2012, 03:29:13 PM
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Official statements:
http://gfy.com/showpost.php?p=18753403&postcount=1
http://gfy.com/showpost.php?p=18753657&postcount=22
cbeast
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Let's talk governance, lipstick, and pigs.


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February 12, 2012, 03:37:05 PM
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What could they be afraid of?  Grin

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
matonis
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February 12, 2012, 03:50:37 PM
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Part of it I don't understand, because the banks for CryptoXchange and others still take face-to-face deposits at US banks and those are known cash deposits for bitcoin. In Canada, I think it's a soft warning from regulators because of what the Paxum banking partners may think they'll be encountering in the near future. My analysis is here: http://themonetaryfuture.blogspot.com/2012/02/paxum-exits-from-bitcoin-business.html

Founding Director, Bitcoin Foundation
I also cover the bitcoin economy for Forbes, American Banker, PaymentsSource, and CoinDesk.
finway
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February 12, 2012, 05:00:08 PM
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Sorry to hear that.

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February 12, 2012, 05:11:20 PM
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Now that Dwolla has $5 million in funding from wall street, will they decide they no longer need the bitcoin business either?

source:  http://www.americanbanker.com/issues/177_26/dwolla-raises-5-million-venture-funding-1046408-1.html

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Steve
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February 12, 2012, 05:56:40 PM
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"We had been in discussions with our banking partners, Mastercard and our auditors for the last couple of weeks, and on Friday our banking partners ended the discussions with us and stated that it was too much of a potential risk to continue doing business with Bitcoin and Bitcoin Exchangers and instructed us to close all Bitcoin-related accounts." --RuthB of Paxum

Yes, the potential risk is to MasterCard's business model.   Grin

(gasteve on IRC) Does your website accept cash? https://bitpay.com
cbeast
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Let's talk governance, lipstick, and pigs.


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February 12, 2012, 06:03:19 PM
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"We had been in discussions with our banking partners, Mastercard and our auditors for the last couple of weeks, and on Friday our banking partners ended the discussions with us and stated that it was too much of a potential risk to continue doing business with Bitcoin and Bitcoin Exchangers and instructed us to close all Bitcoin-related accounts." --RuthB of Paxum

Yes, the potential risk is to MasterCard's business model.   Grin
It's kinda funny. My dad was involved with the development of Master Charge. He commented that Bitcoin seems to be the next and very much needed change in money generation.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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February 12, 2012, 08:53:18 PM
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It's very telling that, even though they have accounts here, they posted that thread there, but not here. I'd respect them more if they would have said that they rejected us to our face, so to speak.

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February 12, 2012, 08:54:42 PM
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It's very telling that, even though they have accounts here, they posted that thread there, but not here. I'd respect them more if they would have said that they rejected us to our face, so to speak.

they would rather post on a forum that calls itself gof**kyourself

classy, Paxum, real classy

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bitcool
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Live and enjoy experiments


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February 12, 2012, 09:10:16 PM
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Paxum does a lot of things that do not make sense. Never liked them, nonsensical business practice and stupid reps. 
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February 12, 2012, 09:25:10 PM
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It's very telling that, even though they have accounts here, they posted that thread there, but not here. I'd respect them more if they would have said that they rejected us to our face, so to speak.

they would rather post on a forum that calls itself gofuckyourself

classy, Paxum, real classy

I say good riddance. For reasons I mentioned in this thread https://bitcointalk.org/index.php?topic=63521.0 It appears that Paxum is breaking long standing Credit Card rules by funding accounts as a purchase via Credit Card http://m.gfy.com/showthread.php?t=1046879&page=2 and then allowing the withdrawal of said funds as a cash advance via a debit card. https://www.paxum.com/payment/faq.php?view=views/faq.xsl

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
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