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Bitspend ceases trading due to frozen accounts
Bitspend has been forced to stop operations after its bank accounts were frozen for being "too high risk".
By David Gilson
Updated Sep 10, 2021, 10:53 a.m. Published Jun 20, 2013, 1:49 p.m.
The bitcoin payment system, Bitspend, has been forced to stop operations after its bank accounts were frozen. Bitspend is a service that acted as a bridge between those who held cash in the form of bitcoin, and merchants who did not accept bitcoin payments.
According to the firm, its banks (Chase and another unnamed bank) both told it that they regarded businesses which trade in bitcoin as "too high risk". The banks allegedly did this without notice.
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Initially, Bitspend was told that its funds would be returned by cheque within 30 days. However, the firm reported, via Reddit that an employee of Chase bank told them:
"Your account will be reviewed to decide whether the source of deposits (exchanges) is legitimate, and we will decide within 30 days if we will be returning any or all of your money"
Furthermore, Chase bank has also closed the personal accounts of the firm's owner.
If true, this represents a heavyhanded approach by assuming that businesses dealing with bitcoin payments are automatically suspicious.
The company stated that it will honour orders as soon as it can, but with the current state of affairs it cannot pay its own credit bills even though money is being deposited from exchanges.
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