Bitcoin exchange BitFloor shuts down, promises to return user funds

Even as the Bitcoin wave continues to rises and fall, there’s more bad news for advocates of the cryptocurrency. Bitcoin exchange BitFloor has announced that it is closing its trading operations and plans to return its remaining funds to its users.

The New York-based bitcoin exchange, which was a leading outlet for trading in the digital currency, announced the closure with a note on its homepage. “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.”

“Over the next days we will be working with all clients to ensure that everyone receives their funds. Please be patient as we process your request,” founder Roman Shtylman said in the note.

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This closure marks yet another blow for the large-scale adoption of digital currency and underlines the volatility of such a monetary system. Before it announced the end, BitFloor had been going through turmoil after the theft of 24,000 BTC last September. In September, Bitcoin was valued at $10.40, making the heist's booty worth nearly a quarter of a million US dollars. Today, it is worth nearly eight times that amount.

Founded in 2009, the decentralised Bitcoin has had its ups and downs in recent months with a high of $260 followed by a fall this week, where the value was hovering around $100. On Mt. Gox, another Bitcoin exchange, the currency is currently trading at $90 after a low of $50.

BitFloor’s closure comes after a tumultuous week for all Bitcoin stakeholders – one in which the currency’s bubble has been said to have burst. The closure comes as a sudden jolt for those invested in Bitcoin’s future, as BitFloor had only just announced that it had completed a seed round of financing to the tune of $500,000. BitFloor was about to launch a Forex trading base to potentially allow investors to short the Bitcoin market.

Published Date: Apr 18, 2013 11:58 am | Updated Date: Apr 18, 2013 11:58 am