Regulatory Issues Force Bitcoin-Friendly Internet Credit Union to Abandon Accounts

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Regulatory Issues Force Bitcoin-Friendly Internet Credit Union to Abandon Accounts
Regulatory Issues Force Bitcoin-Friendly Internet Credit Union to Abandon Accounts

Regulatory Issues Force Bitcoin-Friendly Internet Credit Union to Abandon Accounts

Thanks to the recent increase in regulatory interference and paparazzi running after Bitcoin, the Bitcoin-friendly Internet Credit Union has decided to dump accounts. A release from the organization says that though the company has been involved in Bitcoin for a couple months now and it was an exciting experience for it and its clients, the duration also saw unprecedented interference on the part of the government.

Though it operated within the purview of the laws that are within its field of membership, it also saw an increased interest from the press, regulators, and other financial services entities that make up the financial community. The organization cites that as certain operational and regulatory issues have come up that are applicable to new credit unions like it which it is willing to follow.

A Lot of Scrutiny by the Government

Though the organization considers that the Bitcoin users are not drug dealers, money launderers, or whatever, in the release, it considers that the evolving regulatory environment is not always easy; it is a long and not a short road and sometimes requires detours. Thus, until it has further clarity, it is unable to service some of its corporate members.

The decision on the part of the organization that has established itself as a Bitcoin heaven for its services is unfortunate for many Bitcoin customers as in contrast to traditional banks, which snubbed businesses built around the virtual currency, the IAFCU basically welcomed the customers with open arms.

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However, all of a sudden the decision from the IAFCU has shocked many stakeholders and potential customers that it is dumping its Bitcoin clients as certain operational and regulatory issues came up and until it has further clarity, it is unable to service some of its corporate members. From the reading it is clear that it is the corporate members and not all of them that will be affected from the decision.

It will have Some Serious Implications

Bitcoin analysts say that the decision on the part of IAFCU to cut off Bitcoin will make it even harder for those businesses to operate in the U.S.. We had already reported earlier (http://www.forexminute.com/bitcoin/tradehill-inc-moving-customer-accounts-to-the-internet-archive-federal-credit-union-12135) that Bitcoin exchange Tradehill had recently registered with FinCEN and shifted its accounts to the IAFCU.

However, later on it was reported that the credit union cut Tradehill off. Tradehill had later on to decide the halting all trading activities due to banking and regulatory issues.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com