Jared Kenna, the Chief Executive Officer of TradeHill has written a mail and admitted that effective immediately his company is shutting down trading/deposits and returning all client funds. He cites that the decision is being taken due to increasing regulation which TradeHill cannot withstand or operate in its current capacity without proper money transmission licensing.
He further says that apart from a licensing issue, the situation has deteriorated as there have been multiple bank account closures. Paxum’s decision to close all Bitcoin business accounts has also generated problems and in such a situation TradeHill realizes that it is better to halt trading and pursue licensing while raising funds.
Earlier we had reported that TradeHill was transmitting customers’ funds to the Internet Archive Federal Credit Union (http://www.forexminute.com/bitcoin/tradehill-inc-moving-customer-accounts-to-the-internet-archive-federal-credit-union-12135) so that it can provide security to funds. Now, the decision on the part of the San Francisco outfit is definitely a bad sign for all stakeholders.
TradeHill has been facing a lot of problems since its launch in 2011. Though at the time of formation it was the second-largest Bitcoin exchange in the world, it closed its doors in January 2012 due to the loss of its payment network partner Paxum. However, the TradeHill CEO is still expecting to work with Paxum as he says that his organization would like to make it known that the relationship with Paxum has been great.
Jared Kenna also informs that everyone at TradeHill has been working without pay for several months after one of its payment processors removed over $100,000 dollars from its account without notice. He will be taking legal actions against the payment processor. He reiterates that now his organization will be focusing on Bitcoin.com and preparing to release a new site before the end of the month.
The Troubled Past
Earlier too TradeHill had stopped its operation sometime in January 2012. Later on in March 2013, the company again started its operations after receiving $400,000 in seed funding from angel investors. The company then had executed over $1 million in Bitcoin trades with the first month.
TradeHill’s decision has received mixed reaction from the users who are shocked yet pleased that the company is trying to bring transparency and avoiding further troubles from regulatory bodies.
Jared Kenna also promises that the company plans to use its current downtime to make improvements to its trading platform which clearly shows that hiatus may be temporary and not permanent.
To contact the reporter of this story: Deepak Tiwari at email@example.com