W3C home > Mailing lists > Public > public-webpayments@w3.org > September 2013

Re: Tradehill Bitcoin exchange shut down for 2nd time in 2 years

From: Margaux <margaux.r.a@gmail.com>
Date: Tue, 3 Sep 2013 13:21:26 -0400
Message-ID: <CAGk23cRAUgR2Cfw0nyF51TinXc4SnrdvFn3s7yozUPoXTBx2vg@mail.gmail.com>
To: Manu Sporny <msporny@digitalbazaar.com>
Cc: Web Payments CG <public-webpayments@w3.org>
>From what I've gathered, a way around it is to partner with a company that
already has money transmitter licensing and either do a rev share or
subscription model. Though funds would most likely need to be kept in the
bank account of the fully licensed company. I haven't seen this done yet.
Please let me know if someone knows of a company doing this currently. That
was the way I wanted to go when I was starting an exchange. I know of one
remittance company that is interested in getting into bitcoin and unlike
the bitcoin companies, they started on a traditional money transmitter
route and already have most of their licensing.

On Tue, Sep 3, 2013 at 12:58 PM, Manu Sporny <msporny@digitalbazaar.com>wrote:

> The Tradehill Bitcoin exchange has just been shut down for 2nd time in 2
> years. This after just recently partnering with the Internet Archive
> Federal Credit Union to store customer funds in FDIC insured accounts.
> It seems as if there is no way regulators are going to allow them to
> operate without Money Transmitter Licenses. Getting money transmitter
> licenses in all 50 states requires a company to go through an entirely
> different process in each state. It requires that company to be surety
> bonded for around $25M dollars, which results in close to $140K/year in
> fees to operate. The regulatory environment in the US is forcing many
> Bitcoin exchanges out of business:
> http://bitcoinsinsider.com/regulation-forces-tradehill-bitcoin-exchange-to-suspend-all-trading_b249
> This has deep repercussions for the work that we're doing here. It
> doesn't matter if we create a great open payment technology if no one
> will be allowed to use it due to the current regulatory environment.
> -- manu
> --
> Manu Sporny (skype: msporny, twitter: manusporny, G+: +Manu Sporny)
> Founder/CEO - Digital Bazaar, Inc.
> blog: Meritora - Web payments commercial launch
> http://blog.meritora.com/launch/
Received on Tuesday, 3 September 2013 17:22:33 UTC

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