Coding in my Sleep: Dwolla Begins PayPal-Style Account Suspensions

Dwolla is a popular method of moving funds between USD and Bitcoin largely because they “claimed zero chance of chargebacks and appeared to be a small business run by decent people who weren’t necessarily Bitcoin-friendly but at least didn’t seem to be Bitcoin hostile.”

However it seems that Dwolla is going the way of PayPal and has now begun suspending accounts do to ‘suspicious activity’,  especially the accounts of user who it suspects are acting as a virtual currency exchange, forbidden in it user agreement.  And it seems this move may be due to regulatory pressure.

“Since those early days, tension has built between Dwolla and Bitcoiners and may have just reached the point of no return: Dwolla has moved beyond closing the accounts of those it can prove are operating unlicensed exchanges and has begun closing the accounts of private individuals based on a mere affiliation.”

The posts author contacted Dwolla for comment to notify them of the article and for comment. Their responce…

“We appreciate the heads up, but I don’t know if I’ll be of much help.

It’s an odd, highly-regulated world that Dwolla has made the choice operate inside of. Where some scenarios appear black and white, rules and procedures can often add layers of grey. Of course, it’s on us to find new ways to balance convenience, safety, and privacy with these requirements and see through the grey, but it’s important to note that we’ll always err on the side of caution. We understand that being misunderstood by our own users sucks, but if it means protecting the network and the community, we’ll do it.”

Read the article in its entirety here.


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