I have deposited around $5,000 in funds from my bank account into Circle since October 11. Never had any issues on that end.
Last night (all times in GMT-8) at 8:39 PM
I deposited a value (based on the Circle price, which is 0.5-1.5% above Bitstamp usually) of $4,951.47 of BTC (14.35 BTC total). At 10:24 PM, I withdrew all those funds to my bank account (the same account which had purchased a total of $5,000 worth of BTC from Circle since October 11), at a value of $4,924.34. This was below my personal withdrawal limit set by Circle of $5,000. After that, I went to sleep.
I wake up this morning and see an email from Circle at 12:24 AM, which says my withdrawal failed due to their "identity verification process". The BTC was back in my account.
The price difference in BTC between these time periods was $5/BTC and was $10+/BTC during the night.
Circle's current model allows them to make profits when more people deposit funds than withdraw funds, because their price is above the market price. In this particular withdrawal, they would have lost an additional $5-$10 per BTC if they do not immediately short the equivalent BTC. (I know they do not immediately sell the BTC, as the coins are still
laying in the address unspent as of the time of this post.) They do not charge fees, so they're actually losing money or breaking even on every withdrawal, which is a reason for Circle to avoid them altogether.
- If Circle is not going to approve a withdrawal, why wait 2 hours and for BTC to drop $5-$10? Why rollback a trade? Because it's unprofitable?
- Why would a withdrawal not be approved, when I have previously purchased the same amount months prior using the same bank account? If there is Know Your Customer information Circle needs for that size of a transaction, that information should be required before submitting a withdrawal.
- Why even pretend to have withdrawals, if it is not actually possible to withdraw without passing through imaginary roadblocks? So Circle can use the 2+ hour float as a hedge?
