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Author Topic: Dwolla now purposely delays USD withdrawals from Bitcoin exchanges  (Read 5166 times)
toffoo
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April 21, 2012, 08:03:14 PM
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Another unfortunate FYI for other Bitcoin traders here:

I just noticed that USD withdrawals to Dwolla from Bitcoin exchanges no longer come in as "instant" transfers.  In other words, you won't be able to spend, use, or withdraw the funds to your bank from Dwolla for upwards of a week or more until the Dwolla transfer "clears" and the transfer will sit as "pending" in your Dwolla account until it does.

Given that it already takes 3-5 business days for the ACH transfer to get funds into your bank, this additional delay is certainly unfortunate.

I received withdrawals from 3 different Bitcoin exchanges recently, and all are still pending, the oldest more than a week old now.  I actually checked with the exchanges to see if it's something different they are doing, but they said no, it is Dwolla.

Unfortunately this is further evidence of Dwolla moving the goalposts without any prior warning (or did I miss the announcement somewhere?) and screwing with Bitcoin users in general.  For a company whose success was built upon the patronage of Bitcoin users, it is sad indeed to see this service morph from a go-to lifesaver to PayPal v2.0.

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April 21, 2012, 08:48:35 PM
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In other words, you won't be able to spend, use, or withdraw the funds to your bank from Dwolla for upwards of a week or more until the Dwolla transfer "clears" and the transfer will sit as "pending" in your Dwolla account until it does.

the fuck.
where'd you see this? nevermind, i'm an idiot.

it's more than a pain in the ass...i was kinda neutral in the dwolla deposit thingy, but this...



well, shit.

goodbye dwolla.

I'm hoppin your pool, taking away your payouts.
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April 21, 2012, 08:51:44 PM
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I received withdrawals from 3 different Bitcoin exchanges recently, and all are still pending, the oldest more than a week old now.

This can't be good.  I'ld like to see this confirmed as to whether or not this is what every person gets or if it is different based on whether or not your account has the new restrictions Dwolla put in place this week (SSN reqiured, 30 days passed since first deposit from a bank, Hub page enabled).

 

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April 21, 2012, 08:59:24 PM
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This can't be good.  I'ld like to see this confirmed as to whether or not this is what every person gets or if it is different based on whether or not your account has the new restrictions Dwolla put in place this week (SSN reqiured, 30 days passed since first deposit from a bank, Hub page enabled).

 

I can't be sure exactly if it's everyone or just me, but I did complete the new restrictions thing (SSN, 30days, Hub .. and even the social networks thing before they nuked it) a few days before I initiated these transfers, and still they sit there in pending.

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April 24, 2012, 01:07:16 AM
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I did a withdrawal to Dwolla from MTGox at 11am, I can't see it anywhere in Dwolla - pending or not. Uh.
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April 24, 2012, 01:58:38 AM
 #6

Confirmed same symptom - Saturday withdraw to Dwolla still hasn't shown up. Note, there is nothing in "pending".

Time to let your voice be heard:
Customer Support
Call: 1-888-289-8744 8am-6pm CST, Mon-Fri

Note this new addition to the "funding sources" page:

Instant

Instant is an opt-in feature that provides you immediate access to cash. Deposits via Instant are immediately available.

Credit Check: We will only check your credit score if you turn Dwolla Instant on and we have never checked your credit or not checked it within the last 6 months.

$3 monthly participation fee: When Instant is enabled, you can deposit funds into your Dwolla account whenever you want, however many times you want, for only $3 per month. You can opt-out of the feature at any time.

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April 24, 2012, 02:05:56 AM
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Confirmed same symptom - Saturday withdraw to Dwolla still hasn't shown up. Note, there is nothing in "pending".

Does it show "pending" in Dwolla?

the transfer will sit as "pending" in your Dwolla account until it does.

Right ... if it shows as Pending in Dwolla, then that means Mt. Gox has transferred the money and Dwolla must be holding it.  The only time that's been reported is when a user doing the transaction manually picks the "from my bank account" as the source.  From there, Dwolla has to do a normal ACH transactions.  It has never been reported that Mt. Gox (or any exhange) has been doing withdrawals like this before.  

So if there are multiple reports of these "pendings", then that needs to be looked into further with Mt. Gox to verify that they wouldn't intentionally start doing that for withdrawals.

If instead the problem is a Dwolla withdrawal at Mt. Gox never shows up in Dwolla, the problem then is likely that Mt. Gox didn't keep enough in their Dwolla account and then couldn't serve all the withdrawal requests it had pending.  It's something that has been happening every weekend, several times in a row now.  If that's a problem, then considering switching exchanges as there are other exchanges that don't have that problem.

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April 24, 2012, 02:17:31 AM
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Confirmed same symptom - Saturday withdraw to Dwolla still hasn't shown up. Note, there is nothing in "pending".

Does it show "pending" in Dwolla?

the transfer will sit as "pending" in your Dwolla account until it does.

Right ... if it shows as Pending in Dwolla, then that means Mt. Gox has transferred the money and Dwolla must be holding it.  The only time that's been reported is when a user doing the transaction manually picks the "from my bank account" as the source.  From there, Dwolla has to do a normal ACH transactions.  It has never been reported that Mt. Gox (or any exhange) has been doing withdrawals like this before.  

So if there are multiple reports of these "pendings", then that needs to be looked into further with Mt. Gox to verify that they wouldn't intentionally start doing that for withdrawals.

If instead the problem is a Dwolla withdrawal at Mt. Gox never shows up in Dwolla, the problem then is likely that Mt. Gox didn't keep enough in their Dwolla account and then couldn't serve all the withdrawal requests it had pending.  It's something that has been happening every weekend, several times in a row now.  If that's a problem, then considering switching exchanges as there are other exchanges that don't have that problem.

OK, re-reading the OP, his payments are sitting in "pending", whereas mine has not shown up. Now I should expect that after MtGox actually sends the money I don't get to withdraw it? RRRRRR. Angry

I see now from mtgox: https://support.mtgox.com/home

Mt.Gox Support Apr 17 • Announcements / Announcements

Hello Mt.Gox Users,

We regret to inform our users that there is a small delay in Dwolla withdrawals due to the large volume of pending transfers at the moment. This has been caused by the Tax Day in the US, but we apologize for any inconvenience caused. Please be aware that all pending withdrawals will be processed shortly. If your transfer has not appeared on your Dwolla account, feel free to contact Mt.Gox Support regarding this issue and we can check the status of your transfer. You may also cancel any pending withdrawal transactions by contacting us. Again, we apologize for this matter.


I can assure you that this notice was not there on April 18 (only the previous "resolved" message from April 11). They back-dated their announcement.

If Dwolla is indeed making all deposits "pending" for many days (unless you authorized them to do a credit check and pay them an unannouced $3 per month), one might assume this may affect mtgox funding their dwolla account too. They might have any/all recent payments sent to them sitting in their "pending"...

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April 24, 2012, 02:34:32 AM
 #9

I believe you were goxxed. Dwolla sucks, it's just Paypal 2.0 no matter what revolutionary claims their website has. Maybe you can ask MtGox to cancel the pending transaction, generate MtGox USD and sell it somewhere. If Dwolla requires additional holds it would be faster to mail cash to each other.
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April 24, 2012, 02:46:32 AM
 #10

Dwolla sucks, it's just Paypal 2.0 no matter what revolutionary claims their website has.

I just pulled their Dun and Bradstreet, how much do I have to be annoyed to add a negative to their record?:

Company Name: Dwolla
Address: 1312 Locust St Ste 204
Des Moines, IA 50309
(319) 230-4129

Company Name: Dwolla Corp
Address: 1618 N 15th Ave E
Newton, IA

Note that the second address is an online car stereo shop (but surprise, they link to Dwolla on their web site: http://www.edesignaudio.com/contact.php):




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April 24, 2012, 07:52:59 AM
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Note that the second address is an online car stereo shop (but surprise, they link to Dwolla on their web site: http://www.edesignaudio.com/contact.php):

What a coincidence.  Dwolla CEO Ben Milne happened to (or still happens to?) also own an online car stereo shop (of which was paying high merchant credit card fees, and thus the catalyst for the Dwolla concept.)

But I'm missing something.   Mt. Gox fails to transfer money to your Dwolla account, but you are upset with Dwolla?

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April 25, 2012, 02:34:36 PM
 #12

But I'm missing something.   Mt. Gox fails to transfer money to your Dwolla account, but you are upset with Dwolla?

I suppose you must ask the question "why doesn't mtgox have funds available in their Dwolla". The likely answer is in the subject of every post in this thread.

Mtgox has serious cash flow - people are both depositing money by Dwolla, and withdrawing funds by Dwolla. Dwolla has basically said "sorry, we are holding all your deposits for a week before you can have access, sorry about your plans to use those funds to pay withdraws". So mtgox is supposed to give Dwolla a permanent loan of tens or hundreds of thousands of dollars so they can continue at the same cash flow through Dwolla? This is why Dwolla are scum.

There is absolutely no legitimate reason for Dwolla to delay the availability of funds paid to you by someone else. You are being paid by money that is already in the Dwolla system. $100 of "dwolla cash" should directly represent $100 of vetted cash that is held in Dwolla's real bank account. After it is in their system and has gone through their incoming funding delays, it should be considered "same as cash", so moving it from one account to another should not make the funds unavailable to anyone for another week.

Dwolla has likely decided that by making funds that are already in their system unavailable to users, they can use the "always pending" cash flow float as their own personal bank account to dip into to pay employees and expenses to keep the business running a bit longer until it implodes. They can also charge $3 per month for this "service", which I'm sure they'll pull right out of your bank account if you don't have available Dwolla funds.

The problem with Dwolla is it is run by people who are proud to have no banking experience. They told people that accepting Dwolla was as good as cash, and then when they were hit with ACH chargebacks from not understanding the system, then they pulled funds back out of Dwolla accounts. Worse, they did not debit the money from the user account that had deposited funds - they pulled the money out of other's accounts that had accepted payments from Dwolla users. And they tried to do it silently, they would just make money disappear out of Tradehill's account with no notice that Dwolla was charging back the funds, and with nothing to discover in the history. This is why Dwolla is scum.

Then after they had allowed people to use their system, they suddenly suspended account access and demanded ID from users in order to release the funds. This is why they are scum.

Then they come up with some ridiculous system to try to fix their completely broken business model of accepting reversible bank transfers as payments by requiring a social media account and a social "payment hub" be added or they will hold your money in their bank account for a month before releasing it??? This is why they are idiots.

Then after companies have set up a business model of using Dwolla with immediate availability of funds, they change the policy with no announcement and completely fuck up the cash flow of companies like MtGox and users that need to get their money out. They have the gall to even want to check user's credit, when it is Dwolla's credit that should be checked. This is why they are scum.

A Google search for Dwolla should not bring up Ashton Kutcher fluff press releases, it should show that they are being sued for stealing tens of thousands of dollars from their users and destroying someone else's business.

I suppose I will finish this rant by saying that Dwolla didn't put my mtgox withdraw into "pending", it was paid on Tuesday, so I don't know what accounts they are doing this on.

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April 25, 2012, 09:58:23 PM
 #13

I received withdrawals from 3 different Bitcoin exchanges recently, and all are still pending, the oldest more than a week old now.

So far you are the only person to confirm this (  account-to-account transfer from a Bitcoin exchange arriving as "pending" ).

It the status still "pending" or has the status changed on any?

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April 25, 2012, 10:06:43 PM
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I received withdrawals from 3 different Bitcoin exchanges recently, and all are still pending, the oldest more than a week old now.

So far you are the only person to confirm this (  account to account transfer from a Bitcoin exchange arriving as "pending" ).

It the status still "pending" or has the status changed on any?

I'd love to try it out, but Dwolla suspended my account and is ignoring my emails.  I don't need them, and I don't want to use them anymore, so I'm not going to waste any time on the phone.

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April 26, 2012, 12:13:10 AM
 #15

I received my withdrawal from MtGox to my Dwolla account within 24 hours of initiating the transfer.  I sent it on to my bank account the moment I saw it had arrived.

Note that I've never given any identification to Dwolla or MtGox, and I've always (with one early-on exception) done withdrawals of less than $1000.

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April 26, 2012, 01:42:29 AM
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This is a very bad sign.  I wouldnt trust Dwolla any more.  They are a fly by night startup anyway.  Supposedly Ashton Kutcher is a major investor (read that on another certain board accessible via TOR).  Don't know if its true, but i think the business model is in trouble with .25/transfere fees.  its too good to be true.  I bet they've been gettin hit hard by fraud or worse they are burning cash and holding back withdrawals because they are comingling funds to keep the enterprise afloat.  Hey, looks like Jon Corzine got away with it, why not Dwolla? 

I hope this is not prophetic but changing shit like this w/o notice is very ominous sign.

Prediction: Dwolla folds up within a few weeks, accounts will go missing.  WATCH OUT!

"It is, quite honestly, the biggest challenge to central banking since Andrew Jackson." -evoorhees
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April 26, 2012, 01:44:30 AM
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Confirmed same symptom - Saturday withdraw to Dwolla still hasn't shown up. Note, there is nothing in "pending".

If instead the problem is a Dwolla withdrawal at Mt. Gox never shows up in Dwolla, the problem then is likely that Mt. Gox didn't keep enough in their Dwolla account and then couldn't serve all the withdrawal requests it had pending.  It's something that has been happening every weekend, several times in a row now.  If that's a problem, then considering switching exchanges as there are other exchanges that don't have that problem.

MT Gox is too good and well capitalized for this to be a problem on their end.  If so, send an email to them, they are pretty responsive.  Again, i think this is Dwolla commingling.  Next thing will be bounced checks for the employees.  WATCH OUT!

"It is, quite honestly, the biggest challenge to central banking since Andrew Jackson." -evoorhees
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April 26, 2012, 01:51:33 AM
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In fact now that i think about this, i am thinking that dwolla may owe mt gox some money so they are holding back flows to Dwolla or at least keeping very tight balances on hand at Dwolla expecting a failure.

I work in finance, i smell these things.  Dwolla will go down, if you're pending a deposit to Dwolla, try to go back to Gox and reverse it right quick.

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April 26, 2012, 02:20:35 AM
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They are a fly by night startup anyway.

Dwolla raised $5 million in round B funding from Union Square.  Fred Wilson, of Union Square has a pretty remarkable track record as far as making very smart early investments (i.e., Etsy, foursquare, Kickstarter, Zynga, Tumblr, Turntable.fm, Twilio and Twitter ... and now Dwolla).
 - http://www.siliconprairienews.com/2012/02/dwolla-s-series-b-three-things-it-means-for-dwolla-part-1

Hey, looks like Jon Corzine got away with it, why not Dwolla?

Every dime of funds at Dwolla are stored in FDIC or NCUA insured accounts.  Customers funds at MF Global did not (and were not) under that same protection.  (Not justifying Corzine's actions, just saying Dwolla != MF Global)

I hope this is not prophetic but changing shit like this w/o notice is very ominous sign.

You said it yourself.  They cannot survive by charging only $0.25 per transaction and deal with mountains of fraud -- even if they pass on the losses when fraud does occur.  Survival requires making changes.  Creating this "30-day probation on new accounts" is simply a policy decision they have the full right to do.  They didn't say you can't withdraw the money in your Dwolla account and they did't put a hold on it -- they simply said it can't go to bitcoin exchanges just yet, if you've only just recently linked your bank account.

Prediction: Dwolla folds up within a few weeks, accounts will go missing.  WATCH OUT!

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is likely that Mt. Gox didn't keep enough in their Dwolla account and then couldn't serve all the withdrawal requests it had pending.  It's something that has been happening every weekend, several times in a row now.

MT Gox is too good and well capitalized for this to be a problem on their end.

April 17, 2012:
We regret to inform our users that there is a small delay in Dwolla withdrawals due to the large volume of pending transfers at the moment.

April 24, 2012:
Update: Transfers continued to be processed at a reduced speed because of the extremely large backlog.
We are exploring options with Dwolla to ensure that we have sufficient transfer capacity so that this does not occur again in the future
.

 - https://mtgox.zendesk.com/entries/21290798-dwolla-delays
 

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April 26, 2012, 02:25:28 AM
 #20

Yeah and it has nothing to do with tax day.  Libertarians don't pay taxes.  Its b/c of the 420 sale on SR.  All the vendors are cashing out!

"It is, quite honestly, the biggest challenge to central banking since Andrew Jackson." -evoorhees
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