Bank Closes Bitcoin Exchange Account

April 25, 2013

After technical problems and a denial-of-service attack two weeks ago at resulted in suspension of trading at Mt. Gox, the world’s largest Bitcoin exchange— and led to a precipitous plunge in Bitcoin’s value —some financial institutions may be reassessing the risk involved in doing business with such exchanges. Capital One Financial Corp. last week closed the bank account of Bitfloor, forcing the Bitcoin exchange to shutter its doors.

Visitors to the company’s Website last Wednesday were greeted with this message from Bitfloor’s founder, Roman Shtylman:

“I am sorry to announce that due to circumstances outside of our control Bitfloor must cease all trading operations indefinitely. Unfortunately, our US bank account is scheduled to be closed and we can no longer provide the same level of USD deposits and withdrawals as we have in the past. As such, I have made the decision to halt operations and return all funds.”

In a subsequent post, Shtylman said Capital One had agreed to return funds in the account and Bitfloor would be able to begin issuing refunds to customers by the beginning of May.