Alpharetta, Georgia-based CampBX, an online platform for trading bitcoins, said Friday that it has been forced to stop providing clients ACH (automated clearing house) and wire transfers effective immediately.
CampBX, one of the few U.S.-based exchanges, said its bank decided not to work with bitcoin companies “due to regulatory uncertainty and recent spate of negative news for Bitcoins.”
ACH is a nationwide electronic funds transfer (EFT) system that provides for the inter-bank clearing of credit and debit transactions. CampBX said it would resume ACH and WIRE operations “once we have a new partner on-board.”
CampBX has stayed compliant with financial service regulations. But the development demonstrates the unnerving position faced by U.S. banks dealing with bitcoin businesses. Banks already face tough “AML” — anti-money laundering compliance rules from several regulators and the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).
“All transfers that have not yet been processed by our ACH and WIRE provider will be refunded to your CampBX account before 5 PM EST on Saturday, February 1 2014,” says CampBX on its website.
The bank pullout could be a setback for other U.S. bitcoin startups if other financial institutions follow suit.
The CampBX action comes during a busy week full of both negative and positive news for bitcoiners. Events included a high-profile money laundering arrest tied to a former U.S. bitcoin startup and hearings by New York’s top financial regulators on cryptocurrencies.
Bitcoin advocate and former BitInstant CEO Charlie Shrem, was arrested Sunday and charged by federal authorities with money laundering and other crimes tied to Silk Road, the notorious online black market. Shrem, 24, headed the New York bitcoin exchange before it ceased operations last summer. Shrem and an alleged co-conspirator are accused of selling $1 million in bitcoins to users of Silk Road.
Benjamin Lawksy, New York’s Superintendent of Financial Services, presided over the hearings and expects to issue specific regulatory requirements for virtual currency businesses later this year. In his opening remarks, Lawsky seemed to strike a friendly tone toward allowing for the bitcoin ecosystem to develop under the proper regulations.
However, New York would be the first state to issue bitcoin-specific rules, leaving a void of state regulations at a time when bitcoin startups are springing up rapidly.
For now, that leaves U.S. financial institutions primarily beholden to federal regulators and strict compliance rules to fight money laundering.
Here is CampBX’s full statement:
ACH and WIRE Temporarily Halted
Our ACH and WIRE provider has made a business decision to not work with Bitcoins and Bitcoin companies due to regulatory uncertainty and recent spate of negative news for Bitcoins. 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.
What Happens to Pending Withdrawals?
All transfers that have not yet been processed by our ACH and WIRE provider will be refunded to your CampBX account before 5 PM EST on Saturday, February 1 2014. Our team will be working round the clock to ensure all refunds are processed correctly and on schedule.
All USD and BTC balances are accounted for. If you are in urgent need of funds, we recommend you to purchase Bitcoins and withdraw them to your personal wallet.
We will resume ACH and WIRE operations once we have a new partner on-board. We will update this page and our news feed as soon as we have additional information about a tangible implementation date.