NEW YORK (InsideBitcoins) — On Wednesday, multiple Bitstamp traders were reporting delays related to their USD denominated deposits. Although there was originally no clear reason as to why these delays were taking place, it now appears that a culprit behind the deposit issues has been found. After reaching out to Bitstamp, Inside Bitcoins has learned that Standard Chartered Bank will no longer be processing bitcoin-related wire transfers.
— Scott Emick (@semick) February 4, 2015
Official response from Bitstamp
Once reports of deposit delays starting popping up on Reddit and Twitter, we reached out to Bitstamp to get some clarity on the issue for their customers. At the time, Bitstamp was investigating the problem, and they didn’t have much information to share with the media or their users. Today, Bitstamp provided Inside Bitcoins with the following statement related to the delays on USD denominated deposits:
“We recently learned that an intermediary bank, Standard Chartered Bank, which is processing USD denominated transfers for one of our banks, appears to no longer be processing bitcoin-related wire transfers. As a result, those customers who have made a USD denominated wire transfer since Monday may have their deposits returned or experience a delay in posting to their accounts.”
A temporary fix
Although customers who made deposits earlier in the week may still be dealing with some issues, it appears that Bitstamp has found a temporary fix to their bank wire USD deposit issues. They expanded on their quick fix in the second half of their statement:
“Those who make USD denominated wire transfers moving forward will need to specify the alternate intermediary bank provided on our deposit page until further notice. We are working to find a permanent solution. We appreciate your patience and support as the bitcoin ecosystem continues to evolve.”
Although Bitstamp has found a bank to fill in for Standard Chartered Bank over the short term, they’ll definitely need to find a new long term banking partner. Banking relationships have been an issue for bitcoin exchanges since their inception, and many former Mt. Gox customers will remember the long delays that plagued that defunct exchange for over a year. Bitcoin has been able to make strong leaps forward into the mainstream over the past few years, but it appears that some banks still think the potential benefits of the technology are not worth the risks.
Rocky start to the year for Bitstamp
2015 hasn’t been too kind to Bitstamp up to this point. The year started with a hacking incident that drained $5 million worth of bitcoin out of the exchange’s hot wallet, but the company has been able to make a somewhat quick recovery thanks to a new partnership with BitGo. It will be interesting to see how Bitstamp can continue to compete as new American exchanges, such as Coinbase and Gemini, come online. Many bitcoin traders in the United States may decide that it could be wiser to stick with a locally regulated exchange. Both Coinbase and Gemini can offer FDIC insured USD deposits to their customers, which is one feature that will be hard for offshore exchanges, such as Bitstamp and Bitfinex, to match.
Any Bitstamp customers with questions related to the USD bank wire issues can reach out to email@example.com.
Inside Bitcoins will continue to follow this developing story.
You can follow @kyletorpey on Twitter.