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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.”

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.