Quote from: eldentyrell on January 05, 2012, 07:02:14 AM

Quote from: Jered Kenna (TradeHill) on January 05, 2012, 06:53:24 AM

They won't give me an answer which is unfortunately somewhat normal.

Bummer.

Is there some reason why this unreliability can't be countered with redundancy? Like having accounts at three or four banks?

We've gone through a few banks. We haven't had any instances where the banks have said "you're ripping people off or doing something illegal" but they constantly evaluate the risk and they view Bitcoin as about as high risk as you can get. Even if we're running millions through a month it's still small potatoes to them. Additionally you'll never talk to the people that actually make these decisions. I doubt there's an exchange or any business that involves a lot of liquid capital that isn't constantly being attacked from every angle. Bitcoin is obviously an especially good target due to it's non reversible nature. It's a testament to our code and staff that we haven't been hacked or defrauded (except Dwolla) but even if you're constantly hit by attempted fraud which fails the bank won't be happy.

Unfortunately banks need to devote floors or even buildings to fraud prevention. It's an industry that I didn't realize the size of until I became personally involved. If you're not being hit then grow in size and reevaluate. I believe paypal loses around .5% annually to fraud and all of their practices we hate such as freezing my account when I sent a guy $0.25 I acidently shorted him on a previous transaction are aimed at preventing fraud.

If we lose half a percent to fraud we can't stay in business due to our margins being considerably smaller than Paypal's. So we need to be even more careful. The good news is we've been successful at it. I haven't sent a single Bitcoin or Dollar to a Nigerian prince to help get his dead uncle's funds in to the US.

Jered