Tag Archives: regulation

Bitcoin Exchange Tradehill Suspends Trading Due to Regulation Concerns

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More Troubles for Bitcoin Exchange Tradehill

Tradehill is a US-based Bitcoin exchange that has grown in popularity as the chief competitor to Japan-based Mt. Gox. Tradehill has tried to position itself as an exchange for traders, especially those looking to move larger blocks of BTC.

Now the company has run into troubles, and has posted a bulletin on its site notifying users that it has suspended trading “due to banking and regulatory issues.”

Tradehill suspends Bitcoin trading

In February 2012, Tradehill shut down “due to increased regulation” and a dispute of $100,000 with one of its payment processors. CEO Jered Kenna posted the announcement on Bitcointalk. The company later bounced back from this issues and has been on the rise, until this latest suspension of business.

Below is the full bulletin from Tradehill. We have reached out to the company for further comment.

Many of you have come to know Tradehill as the digital currency exchange of choice over the last six months. We have appreciated your patronage and have delighted in providing a reliable service to help you reach deep liquidity in the Bitcoin market. We have recently made the decision to temporarily suspend trading on the Tradehill platform, due to banking and regulatory issues. This decision has not been made lightly and we regret having to take such action. However, we embrace the silver lining of our situation and plan to take this opportunity to upgrade, improve, and polish our trading platform.

Tradehill registered with FinCEN in August 2013 and is actively engaging with banks and regulators to continue development of future business products and practices.

We would like to thank our clients, current and past partners, supporters, and advocates for all their continued support. The Bitcoin space has proven to be an exciting and dynamic environment. We are proud to have the opportunity to be at the forefront of this new domain.

[Update 11:15AM PT: Tradehill shared with On Bitcoin the following details around their suspended trading]

The Internet Archive Federal Credit Union has experienced operational and regulatory issues and we are no longer able to continue our developing relationship. Both Tradehill and IAFCU were excited about this relationship and both regret this unfortunate outcome. Tradehill’s integration with IAFCU had allowed for clients to buy Bitcoin with a balance in an account with their own name. This allowed clients to trade Bitcoin with funds that were stored in a federally insured institution.

Our clients still have full access to their funds. We are consulting with regulators to define the most appropriate licensing strategy for our current and future business practices. We are also actively engaging with banks and regulators to continue development of best practices for Bitcoin regulation and compliance.

This is only a temporary suspension of trading. We are continuing with planned development of our trading platform, to provide an improved user experience, as well as additional planned products. We hope to resume trading operations soon.

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Legal Firm Riddell Williams Hires Bitcoin Experts to Lead Payments Practice

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Bitcoin Legal Experts Join Seattle Firm

Two of the leading legal professionals in the Bitcoin industry have joined Seattle-based Riddell Williams to co-chair the Payments practice area and provide expert services to Bitcoin companies. Pictured below are Daniel Friedberg and Ryan Straus, who each have contributed to the emerging Bitcoin business ecosystem.

Riddell Williams Bitcoin Lawyers

Friedberg has spoken at industry conferences including Bitcoin London and Bitcoin 2013, and has been quoted in major publications such as Fox Business, Tech Cocktail, and Business Insider. Friedberg has also published his work on the Bitcoin Foundation blog.

Strauss spoke at Bitcoin 2013, and published his writing in American Banker. He was also quoted in The Hill’s regulation blog.

Collectively, they represent some of the major players in the Bitcoin space for Riddell Williams, including exchanges, service companies, wallets, miners, investors, and merchants.

“We provide advice and help our clients implement compliance programs. We also directly interface with both Federal and state regulators to clarify issues,” said Friedberg in an interview with On Bitcoin. “Regulation of financial services business is inevitable and expected. We generally view the regulatory developments as positive steps towards acceptance. It is far better that we are moving towards a regime of regulation than prohibition,” he added.

Friedberg and Straus joined Riddell Williams and co-chair the Payments practice. “Riddell Williams understand the importance of this emerging payment system,” Straus explained. “Bitcoin is a natural fit for our payments group. Clients in emerging markets such as Bitcoin require the highest level of legal knowledge and service in order to make the right decisions.”

Riddell Williams is a Seattle law firm with over 60 lawyers that was founded in 1906 that has a specialty in financial services. Learn more at www.riddellwilliams.com.

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FinCEN Gives Early Guidance on Bitcoin Regulation

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Regulation on Bitcoin Heats Up in Washington Meeting

On Monday, the Bitcoin Foundation met with FinCEN, the crime enforcement division of the U.S. Department of the Treasury, as well as regulators and law enforcement officials.

Patrick Murck, general counsel for the Bitcoin Foundation, prepared a presentation on Bitcoin for agencies including the FBI, IRS, Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp. and Secret Service.

Bitcoin Regulation

According to a report by the Wall Street Journal, FinCEN made a statement after the meeting giving preliminary guidance on the matter.

“Fincen’s recent guidance concerning virtual currencies made clear that virtual currency administrators and exchangers that provide services within the U.S. must register with Fincen as money-services businesses and that they share similar regulatory responsibilities with other financial institutions,” said Jennifer Shasky-Calvery, director of the Treasury Department’s Financial Crimes Enforcement Network, in a statement after the meeting.

This activity comes on the heels of other regulatory interest in Bitcoin, including Germany’s ruling that Bitcoin is private money, Thailand’s guidance that Bitcoin is illegal, New York’s Department of Financial Services sending subpoenas to 22 Bitcoin companies, and the U.S. Senate launching its own inquiry.


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Germany Ministry of Finance Declares Bitcoin is Private Money

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Germany Declares Bitcoin is Private Money

It seems that every government is starting to weigh in on Bitcoin. First, the Bank of Thailand advised local companies that Bitcoin is illegal. Then, a federal judge in Texas wrote that Bitcoin is money in a ruling about a Bitcoin ponzi scheme.

Now, Germany has ruled that Bitcoins are private money.

“The German Ministry of Finance does not classify bitcoins as e-money or as a functional currency; they cannot be regarded as a foreign currency. Nevertheless they have to be subsumed under the German term of ‘Rechnungseinheit’ as a financial instrument,” Martin Chaudhuri from the Ministry of Finance told CoinDesk. Rechnungseinheit translates to unit of account in English.

Via MarketWatch.

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Bitcoin Foundation Responds to California: Respectfully, You’re Wrong

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Bitcoin Foundation letter

Bitcoin Foundation Fires Back to California

A few weeks back, the California Department of Financial Institutions sent a cease and desist letter to the Bitcoin Foundation for engaging in the “business of money transmission without having obtained the license or proper authorization required by the California Financial Code.”

Attorneys for the Bitcoin Foundation have responded with a 7-page letter outlining why they believe the Bitcoin Foundation is not subject to regulation under the California Money Transmission Act.

Here are the key points:

  • The Bitcoin Foundation does not engage in money transmission in California
  • The Bitcoin Foundation does not maintain business operations in California
  • The Bitcoin Foundation does not sell or issue payment instruments
  • The Bitcoin Foundation does not sell or issue stored value
  • The Bitcoin Foundation does not receive money for transmission

In other words, California, respectfully, you’re wrong.

The wrap up the letter with a request for the cease and desist letter to be withdrawn and ask that an opinion be issued that officially states that Bitcoin is not regulated under the California Money Tranmission Act

For the foregoing reasons, the Bitcoin Foundation has concluded that it does not engage inactivities for which a California money transmitter license is required. Furthermore, the Bitcoin Foundation respectfully submits that the sale of bitcoin is not a regulated activity generally speaking. The Bitcoin Foundation therefore respectfully requests that your office issue an official opinion or administrative letter ruling confirming that the Bitcoin Foundation is not required to obtain a license for the reasons explained above and affirming that the May 30, 2013 warning letter has been withdrawn. Further, the Bitcoin Foundation requests that your office issue an opinion that, for the reasons explained above, the sale of a bitcoin is not regulated under the California Money Transmitter Act.

Read the full letter below.

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