Polish Bank ‘Bank BPH’ Suspends BitMarket’s Business Account

A promising Polish Bitcoin exchange sees bank account suspension

Until recently, the Polish banking system went against the trend by offering support to digital currency businesses, and the future looked bright for many start-ups in this sector.

Other major European banks, too, were similarly supportive in providing bank accounts to bridge the fiat-related operations. Unfortunately, this has stopped, now that Bank BPH has suspended the bank account of popular bitcoin exchange BitMarket.pl.

The disappointing news follows closely behind the suspension by Handelsbanken of the bank account of Stockholm-based exchange Safello, who only recently had introduced a faster deposit and withdrawal method for UK customers.

This is worrying news for exchanges still needing the support of the traditional banking system for users to fund and withdraw their accounts with fiat to purchase bitcoins.

Until now, many European countries have been willing to work with bitcoin businesses; months down the line, however, these same businesses have had their bank accounts suspended with little to no notice. The suspicion is that, behind the scenes, government officials having been exerting undue influence.

Polish exchange BitMarket discovered its business account had been suspended on 26 January, but initial reports from the bank pointed towards a technical glitch.

BitMarket founder Michal Pleban recently told CoinDesk that BPH’s closure of the bank was sparked by an alleged fraudulent transaction flagged up at the local district attorney’s office.

By not providing proper notification to BitMarket regarding the closure of the account, the bank failed to follow normal procedure. This has raised doubts about whether the bank was closed for legitimate reasons, such as breaking the terms and conditions, or whether government officials are working behind the scenes to cripple the bitcoin industry.

The immediate closure of the account also caused deposit and withdrawal problems for BitMarket’s customers, as the technical section which communicates with the bank was never turned off, even though the account was closed.

I hope the recent spate of closures is not a sign of bigger things to come in Europe. According to an industry insider, if the closure was not to the result of a glitch, other exchanges such as CoinFloor, another exchange based in the UK which secured a Polish bank account with Polish PKO Bank, may be on the verge of no longer having a bank account.

‘I am currently on a quest to find a bitcoin-friendly bank in Poland,’ said Michal.

Corruption in the Polish banking system is well documented, and many smaller banks are run by the mafia operating on the fringes.

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Bitstamp freezes customer withdrawals due to denial of service attack

Bitstamp, the second largest Bitcoin exchange in the world by current trade volume, has frozen customer withdrawals due to an alleged denial of service attack.

The company appears to be in a state of disarray after Mt. Gox also suspended customer withdrawals late last week citing technical issues inline with transaction malleability.

Oleg Andreev, software developer and security expert explained the malleability issue:

If you need a quick answer: there’s no bug in the Bitcoin itself. You may go to Bitstamp/Coinbase/BTC-E/Bitcoin-Central and buy more BTC with a huge discount before it gets back to $800-$900.

In an official statement released by Bitstamp which owns 32% of the Bitcoin USD trade volume they said:

We’re confident everything will be back to normal shortly.

Currently it[Bitstamp] has suspended processing Bitcoin withdrawals due to inconsistent results reported by our bitcoind wallet, caused by a denial-of-service attack using transaction malleability to temporarily disrupt balance checking. As such, Bitcoin withdrawal and deposit processing will be suspended temporarily until a software fix is issued.

Bitstamp has confirmed the customers should not worry as no funds have been lost, suggesting that the Bitcoins have been securely stored in offline storage.

Customers have recently taken to the community boards informing others of their suspicions of Mt. Gox and various other exchanges prior to the official announcement last Friday due to some withdrawals taking months.

The effect of Mt. Gox has sent a shockwave through the Bitcoin community, with many people panic selling.

What is currently unclear and not present in the Bitstamp statement is when customers can access their funds.

At the time of writing the current Bitcoin price is just $665.31.

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CEX.IO pushes update to harden exchange security

Leading Bitcoin commodity exchange, CEX.IO has implemented two-factor authentication to strengthen the platform and increase security for it’s growing customer base.

The update secures customer accounts with not only a password but with information only available to the customer, making it increasingly harder for intruders to gain control of accounts using popular methods such as Cross-site request forgery or XSS.

Users will now have the choice of several two-factor features including Google Authenticator, Moreover, Authy and CEX.IO which will use mobile phone verification methods for sending authentcation codes to customers.

Jeffrey Smith, CEX.IO Chief Information Officer, commented:

Users’ security and privacy are of the highest concern for us, especially since our platform deals with financial operations. Therefore, we instantly take measures on raising safeguard level at CEX.IO by means of introducing new security features, such as the Two-Factor Authentication, and informing our users about the ways of keeping their accounts safe from unauthorised access.

The crypto currency industry is often a prime target for hackers who are seeking more ways to exploit industry businesses. CEX.IO is taking this head on building trust for current and future customers.

CEX.IO is owned by CEX.IO LTD which also shares credentials with the popular CHash.IO mining pool.

 

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