5

It seems that bitfloor is a well designed trading platform, and a competitor to MtGox. However, the trading volume is low.

How long has bitfloor been in business?

Have there been any negative accusations such as fraud?

How safe is my money/bitcoins at bitfloor?

5

I am still unable to withdraw my bitcoins that were deposited before their September 2012 security breach. Therefore BitFloor is technically insolvent.

They are registered with FinCEN as a money-service business in the U.S. Thus I assume they are not immune to U.S. courts and U.S. bankruptcy laws.

They are one judgement away from having their bank funds frozen by a creditor, likely forcing BitFloor to declare bankruptcy. If that happens, your funds might be used for paying out to legal costs, paying for the receiver, and then whatever is left for payment to all remaining unsecured creditors such as yourself, proportionate to the amount owed (i.e., "pennies on the dollar").

I like BitFloor and I'ld like to see them succeed, but continuing to operate an exchange while insolvent is a move that is irresponsible and shows disrespect to its customers, current and prior.

  • Is this really true? Bankruptcy laws are designed to give debtors a structured way to default on debts. Bitfloor is free to handle the situation as they see fit (including not repaying any of the stolen funds). If any of their customers have an issue with their handling of the situation, then they are free to complain to Bitfloor, and if that doesn't resolve the matter to their satisfaction, they can file a lawsuit. If enough people file lawsuits, it is Bitfloor that has the option to seek bankruptcy protection. I don't think anyone can force them to file bankruptcy. – Stephen Oct 10 '12 at 19:00
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    Come on, you can't possibly be defending BitFloor's actions. BitFloor's current customers might not be aware of the precarious situation of BitFloor's current insolvency and that their deposits are at risk. Just to clarify though, IANAL. There is over a quarter million USD worth of coins owed to customers. When the first creditor gets a judgement it is then too late for BitFloor to stop that creditor from getting access to the USD funds of current customers. BitFloor is effectively gambling (that no creditors will try to get a judgement) with its customer's money without their knowledge. – Stephen Gornick Oct 10 '12 at 19:39

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