Bitfloor

Bitfloor was a FinCEN-registered Bitcoin currency exchange and trading platform site headquartered in the state of New York, USA. In September 2012, Bitfloor was hacked, with 24,000 bitcoins being stolen. On April 17, 2013 the exchange halted operations after its bank would reportedly close Bitfloor's bank account.

Funding

Bitfloor was praised for the ease of accepting USD cash deposits through LocalTill, which at the date of the closing, supported Bank of America and charged a 1%-4% fee to process the deposit. Other funding options included bank wire transfers (%15 fee) and CapitalOne 360 P2p (formerly ING Person2Person), with no fee. Withdrawals were done via ACH and took 1 to 3 business days. Withdrawals required uploading a copy of the user's government-issued ID. This was the only point at which the identity of the user was required; otherwise, Bitfloor's privacy policies did not ask for any identification information.

BTC deposits and withdrawals could be made at no fee. Large withdrawals were processed manually, due to Bitfloor storing most bitcoins in offline cold wallets.

Trading

Trades could be done via a web interface, or by using the REST API or FIX (Financial Information eXchange) order entry gateway..

Fees

Bitfloor employed a fee structure designed to incentivise market makers. Market orders, that execute immediately, incurred a 0.4% fee. Orders that don't execute immediately received a 0.1% rebate, to encourage liquidity providers to offer information about their market expectations.

Anonymity

Bitfloor allowed access through Tor and did not require any personally identifiable information until the user wished to withdraw money using ACH. Cash deposits could be made via LocalTill -> Bank of America. No ID or personal information is required, and bank tellers do not ask for the reason the deposit is made.

History

The exchange had been operating since 2011 with its first publicity occurring in February 2012.

On September 4, 2012 the operator of BitFloor reported a security breach that resulted in the exchange's wallet with 24K BTC being stolen. The site was shuttered and access to customer funds denied as the exchange's reserves were insufficient to accommodate all funds deposited. As of March 8, 2013, 3 months had passed since the last repayment (December 2012), and the operator had been unresponsive.

On April 3, 2012, the website was down for several minutes.

BitFloor became a Money Service Business (MSB) registered with FinCEN (#31000005224108) on March 15, 2012.

On April 17, 2013 the exchange halted operations after its bank announced it would close its account. While no official reason for the closure has been communicated, it has been hypothesized that the likely cause was the nature of the transactions (relatively large amounts going in and out rapidly), which triggered an elevated risk profile, rather than money laundering suspicions.

See Also

• Buying bitcoins
• Selling bitcoins

External Links

• BitFloor website
• github page
• Chart