Bank Stops Working With Bitcoin Exchange CampBX Due to ‘Regulatory Uncertainty’
US bitcoin trading platform CampBX has announced that it has temporarily halted automated clearing house (ACH) and wire transfers effective 31st January.
Alpharetta, GA-based CampBX indicated in a blog post to its users that its bank has “made a business decision to not work with bitcoins and bitcoin companies”. The bank cited regulatory uncertainty, as well as recent negative bitcoin news, as the driving force behind the decision.
Unfortunately we have some bad news regarding our ACH and WIRE processor. Please see the update here: https://t.co/R0p8WWfYa0
— CampBX – Bitcoin (@CampBX) January 31, 2014
The decision is notable as CampBX became the first bitcoin website to obtain Payment Card Industry (PCI) certification in 2011, signifying that it implements specified controls and safeguards to protect consumer data. CampBX allows for quick buy and sell trades, provides customers with SMS notifications and secures its platform with two-factor authentication, its website says.
The company moved to also calm user concerns, stating that “all USD and BTC balances are accounted for”, and recommending that users “purchase bitcoins and withdraw them to their personal wallets” until standard services resume.
“We are working to find a replacement partner and resume these two services for our customers. In the meantime, please use alternate deposit or withdrawal methods available on CampBX,” the company wrote.
Regulation of exchanges
CampBX has tried to stay compliant with traditional financial service regulations, and the news is likely to further calls for regulatory clarity around such bitcoin businesses. Bitcoin investors lobbied for that at the New York Department of Financial Services (NYDFS) hearings this week, saying that a lack of a clear stance on this issue is pushing exchanges, and US jobs and business, abroad.
By day two, regulators seemed to have warmed to the idea of a New York-based exchange and to implementing the kind of regulations that would lead to its creation.
“Any regulation should help to secure cryptocurrencies and the wallets used to hold them.” – Charles Lee at the New York bitcoin hearings
— CoinDesk (@coindesk) January 28, 2014
Potential partners
Just which bank will join up with CampBX despite the regulatory uncertainty around its business is unclear, however, if past examples are any indication, CampBX may be able to find a partner.
Web payments service OKPAY suspended its support for virtual currencies at the request of its bank last April. This January, though, it was able to resume some services to the virtual currency community in the UK after it found a new partner.
Image credit: CampBX website