How Bitcoin’s Banking Crunch is Holding Back US Startups
Following its May launch, QuickCoin captured attention with its novel integration of Facebook’s ubiquitous social media platform and simple bitcoin wallet technology – and the wider tech world took notice.
Soon, the self-funded company began to capitalize on its momentum, and on 11th August, QuickCoin had the first of its seed round capital wired to its corporate bank account at Wells Fargo. The celebration, however, was short-lived.
As CEO Nathan Lands told CoinDesk:
‘Everything seemed fine, when all of a sudden I started noticing that some of our bills were bouncing because the debit card was being declined.’
Lands alleges that weeks of uncertainty ensued, and that in the end, QuickCoin’s bank account was closed. Lands claims he was never issued a formal letter regarding account closure, although CoinDesk did confirm that transactions made via QuickCoin’s account were denied.
The result is that ultimately, the San Francisco-based company was forced to explore other options, including looking offshore, for its banking needs. QuickCoin claims it now has a working solution in place for its banking needs and that its team is making plans for the longer term.
Wells Fargo would not comment on QuickCoin’s case, citing confidentiality.
Lands, however, asserts that his story is not unique, framing it as indicative of a broad failure in the US banking system to accommodate the bitcoin industry and companies like his own that want to support domestic businesses.
What may be most interesting about Lands’ case, however, is what he learned when he went searching for answers to his banking issues.
This post was published at Coin Desk on September 17, 2014.