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BitCoin Exchange BitFloor Shuts Down

BitCoin Exchange BitFloor Shuts Down

Tyler Durden on 04/18/2013 08:55 -0400
In an amusing development, one of the key alternative BitCoin exchanges, BitFloor, has just announced it is forced to shut down immediately. It is amusing, because one of the primary reasons attributed by the BTC pundits for the recent crash from $260 to $50 was errors and faults in the primary bitcoin exchange MtGox. Well, with alternative exchanges forced to shut down, this may mean the only “faulty” marketplace will sees it monopoly power increase further. It is also ironic because as BitFloor disclosed it “can no longer provide the same level of USD deposits and withdrawals as we have in the past.” Whatever happened to decentralized, and unencumbered by legacy fiat currencies?

bitfloorThe Verge has some more:

Bitcoin exchange BitFloor is closing its doors, halting trading and announcing that it will return everyone’s funds. In an announcement on its main site, the company’s founder, Roman Shtylman, says that “due to circumstances outside [BitFloor’s] control” it “must cease all trading operations indefinitely.” More specifically, BitFloor says that because its US bank account is closing it won’t be able to provide the same level of dollar deposits and withdrawals that it has been up to this point. The news comes after weeks of DDoS attacks and technical problems at leading exchange Mt. Gox and a roller coaster ride of price fluctuations that saw Bitcoin tank from a high of over $200 back down to a low below $70. The news was reported by The Next Web.

Back in September, BitFloor was hit with a $250,000 theft after an attacker got access to an unencrypted backup set of keys for the exchange’s wallet — the software through which people (and organizations) access and transfer their coins. The exchange managed to get back online within a few weeks, with Shtylman announcing his intention to repay the stolen funds.

Overall, BitFloor is tiny compared to Mt. Gox — it does less than four percent of that exchange’s trading volume — but it represented an important alternative in the highly concentrated market. At this point it’s still unclear what exactly happened with BitFloor’s US bank account that required such a speedy exit, but a Reddit user points out that the exchange is registered with FinCEN — the US Treasury Department’s Financial Crimes Enforcement Network — indicating that everything was seemingly above board with the US government. We’ve reached out to Bitfloor for comment on what precipitated the closure, and will update if and when we hear back.

In other news, and from the main, and apparently only remaining BitCoin exchange we get:

  • Dear Mt. Gox customers. We are currently experiencing a downtime and will update ASAP. Apologies for the delay.

With the electronic market in limbo, at least demand for physical BitCoins appears to be solid to quite solid… Oh wait.

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About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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