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Author Topic: why did trade hill give up?  (Read 3335 times)
paulie_w
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July 10, 2012, 05:56:55 PM
 #1

i have been away from the bitcoin scene for a while and just catching up on everything.

why did trade hill shut down, the actual reasons? they seemed very promising.
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BoardGameCoin
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July 10, 2012, 05:58:50 PM
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The way I heard it was that someone fraudulently purchased upwards of $100K worth of BTC on their exchange via Dwolla, and Dwolla charged Tradehill back for it. There's apparently a lawsuit filed by TradeHill against Dwolla for this action, haven't heard anything for several months though.

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barbarousrelic
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July 10, 2012, 06:35:04 PM
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Does anyone know why this was a problem with Tradehill but not MtGox?

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July 10, 2012, 06:40:57 PM
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Does anyone know why this was a problem with Tradehill but not MtGox?

We don't know if it wasn't a problem with MtGox.  We just know if it was, they weren't crippled by it.

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EnergyVampire
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July 10, 2012, 07:04:50 PM
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i have been away from the bitcoin scene for a while and just catching up on everything.

why did trade hill shut down, the actual reasons? they seemed very promising.

A few online articles go into some of the details:

http://arstechnica.com/tech-policy/2012/03/lawsuit-illustrates-bitcoins-chargeback-problem/

http://www.americanbanker.com/issues/177_46/dwolla-bitcoin-exchange-tradehill-lawsuit-1047292-1.html

http://www.scribd.com/doc/84125326/Tradehill-v-Dwolla-Et-Al-Complaint-Filed-Copy

If I understood the most recent documents I read (Filed May 31st, 2012), the case was DISMISSED in U.S. District Court for the Northern District of California. Case3:12-cv-01082-MMC Document34 Filed 05/31/2012

rjk
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July 10, 2012, 07:20:07 PM
 #6

According to the documents here: http://dockets.justia.com/docket/california/candce/3:2012cv01082/252135/

Dwolla filed a motion to compel Tradehill to submit to arbitration, and the case was dismissed because of that, if I am reading it correctly.

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EnergyVampire
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July 10, 2012, 07:50:45 PM
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According to the documents here: http://dockets.justia.com/docket/california/candce/3:2012cv01082/252135/

Dwolla filed a motion to compel Tradehill to submit to arbitration, and the case was dismissed because of that, if I am reading it correctly.

So only Dwolla's motion was dismissed not Tradehill's entire case?

This would make more sense to me, since I believe Tradehill will win the case. Although, I'm still confused as to why Tradehill or any other exchange based in the USA would allow custormers to use Dwolla, Paypal, Liberty Reserve, etc to fund their accounts. As far as I know, standard practice for RL brokerage firms is customer's bank account to brokerage's bank account and vice-versa.

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July 10, 2012, 07:53:42 PM
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So only Dwolla's motion was dismissed not Tradehill's entire case?

Dwolla's motion lead to Tradehill's entire case to be dismissed.
Quote
This would make more sense to me, since I believe Tradehill will win the case. Although, I'm still confused as to why Tradehill or any other exchange based in the USA would allow custormers to use Dwolla, Paypal, Liberty Reserve, etc to fund their accounts. As far as I know, standard practice for RL brokerage firms is customer's bank account to brokerage's bank account and vice-versa.

Dwolla was supposed to be irreversible. Turn out, it is not.

jwzguy
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July 10, 2012, 07:55:43 PM
 #9

Dwolla decided to erase transactions from already issued account statements to hide the fact they were taking money back out of the accounts. They should count themselves lucky they're not facing criminal charges.

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opticbit
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July 10, 2012, 08:56:05 PM
 #10

So only Dwolla's motion was dismissed not Tradehill's entire case?

Dwolla's motion lead to Tradehill's entire case to be dismissed.
Quote
This would make more sense to me, since I believe Tradehill will win the case. Although, I'm still confused as to why Tradehill or any other exchange based in the USA would allow custormers to use Dwolla, Paypal, Liberty Reserve, etc to fund their accounts. As far as I know, standard practice for RL brokerage firms is customer's bank account to brokerage's bank account and vice-versa.

Dwolla was supposed to be irreversible. Turn out, it is not.

why do you include LR in the list?  I thought they did not reverse charges.

Set up the same thing..
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July 10, 2012, 09:15:20 PM
 #11

So only Dwolla's motion was dismissed not Tradehill's entire case?

Dwolla's motion lead to Tradehill's entire case to be dismissed.
Quote
This would make more sense to me, since I believe Tradehill will win the case. Although, I'm still confused as to why Tradehill or any other exchange based in the USA would allow custormers to use Dwolla, Paypal, Liberty Reserve, etc to fund their accounts. As far as I know, standard practice for RL brokerage firms is customer's bank account to brokerage's bank account and vice-versa.

Dwolla was supposed to be irreversible. Turn out, it is not.

why do you include LR in the list?  I thought they did not reverse charges.
He said RL not LR, as in Real Life not Liberty Reserve.

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July 10, 2012, 09:24:16 PM
 #12

So only Dwolla's motion was dismissed not Tradehill's entire case?

Dwolla's motion lead to Tradehill's entire case to be dismissed.
Quote
This would make more sense to me, since I believe Tradehill will win the case. Although, I'm still confused as to why Tradehill or any other exchange based in the USA would allow custormers to use Dwolla, Paypal, Liberty Reserve, etc to fund their accounts. As far as I know, standard practice for RL brokerage firms is customer's bank account to brokerage's bank account and vice-versa.

Dwolla was supposed to be irreversible. Turn out, it is not.

why do you include LR in the list?  I thought they did not reverse charges.
He said RL not LR, as in Real Life not Liberty Reserve.

He said "Liberty Reserve"

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EnergyVampire
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July 10, 2012, 09:41:49 PM
 #13

lol, You guys are going to derail this thread!  Cheesy

I did lump Liberty Reserve with Paypal, Dwolla, etc in the group as examples of funding options I've seen at some exchanges in the past.

RL= Real Life

I used the RL example because the U.S. brokerage disclosures, documents, FAQs clearly state Bank-to-Bank or Brokerage-to-Brokerage transactions only (exception is stock certificates & Treasuries). I have never heard of anyone using Paypal to do this either and most of these brokerages don't accept cash because of money laundering, fraud, regulations, etc.

Hope this clears it up, sorry for the confusion.

Cheers!



Edit: Clarified further

markm
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July 10, 2012, 09:53:38 PM
 #14

why do you include LR in the list?  I thought they did not reverse charges.

Gee I dunno. Why is Dwolla on the list, they explicitly announced in writing that they would not reverse charges...

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nedbert9
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July 10, 2012, 10:08:36 PM
 #15


It's unfortunate that Dwolla isn't suffering legal consequences due to misleading their customers.


edit:


Too bad a benefactor didn't come around to help Trade Hill out of the pit.  Sad for such a young kid's impressive project to get f***ed by arguably disreputable business.

rjk
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July 11, 2012, 12:46:06 AM
 #16

He said "Liberty Reserve"
Derp, sorry I fail.

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redbeans2012
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July 11, 2012, 03:01:21 AM
 #17

Hm I can't believe dwolla will get away with this.  I really liked the tradehill guys.

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July 11, 2012, 03:03:32 AM
 #18

Who said TradeHill gave up......?  Grin

They're currently not operating, but have an extremely strong case (should be resolved some time before the Rapture, thanks to an efficient US justice system), and Jered does not give up.

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dooglus
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July 11, 2012, 07:06:13 AM
 #19

Does anyone know why this was a problem with Tradehill but not MtGox?

We don't know if it wasn't a problem with MtGox.  We just know if it was, they weren't crippled by it.

We don't even know that.  They apparently take weeks to honour bank wire USD withdrawals, and blame it on something to do with Dwolla.  Maybe they were crippled by it but are trying to trade their way out of the mess...

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