Just a few days after their partnership hit the news, TradeHill has announced that it will no longer be doing business with IAFCU, because of “operational and regulatory issues”. TradeHill reported that it is also ceasing its Bitcoin services at this time, though they are still hoping to resolve any issues, and restart in the future. Their full response to our information request is below.
IAFCU, meanwhile, posted on their blog that they would also be ceasing Bitcoin services, stating that:
“Starting three months ago we have enjoyed serving some individuals and companies involved in bitcoin that are within our field of membership. While exciting, this has also been during a period of increased interest from the press, regulators, and other financial services entities that make up the financial community… Until we have further clarity, we are unable to service some of our corporate members.”
Both companies intend to resume services, as soon as possible.
“The e-mail to which you are referring is legitimate. Last night we sent out correspondence informing our clients of an unfortunate decision: Tradehill has temporarily suspended trading due to banking and regulatory issues. This decision was not made lightly and we regret having to take such action. However, we are taking this opportunity to upgrade, improve, and polish our trading platform.
We are also in the unfortunate position of having to end our developing relationship with IAFCU due to IAFCU having operational and regulatory issues. Both Tradehill and IAFCU were excited about this relationship and we both regret this unfortunate outcome. Tradehill’s integration with IAFCU 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.
Though we have temporarily suspended trading activity for the time being, we are continuing with previously planned development of our trading platform to provide an improved experience, as well as additional planned products. We are also consulting with regulators to define the most appropriate licensing strategy for our current, and future, business practices. Tradehill is actively engaging with banks and regulators to continue development of best practices for Bitcoin regulation and compliance.
Thanks again for reaching out. I hope this answers some questions for you and your readers.
Public Relations Manager