Topic: Press Release - TradeHill, Inc. Files Suit Against Dwolla, Inc. - page 2. (Read 12121 times)

Why didn't Dwolla go to Tradehill right when they realized they had incurred losses that would directly affect Tradehill and work out some arrangement?
If a company is a significant portion of your business and you throw them under the bus to save your own assets what does that say about you?

It should have never reached this point. Tradehill would still be around if Dwolla approached them early and we would've been less aware of how incompetent Dwolla really is.

Infidels!

I think they meant "Bitcoin's NO chargeback problem"... idiots!

ars weighs in:

http://arstechnica.com/tech-policy/news/2012/03/lawsuit-illustrates-bitcoins-chargeback-problem.ars

That source is a blog (with spelling mistakes).

Woooh mama! Things will be getting red hot for Dwolla ... would you want that kind of press while most of your money transmitting licensing applications are still pending on key states?

Open advise to Ben Milne: I know you are not that bright, and I know this whole thing grew beyond your limited knowledge of how to conduct business and the financial world in general, but I would say this: try to settle with Tradehill soon. State financial secretaries won't give you a money transmitting license for petty things like having somebody suing you for stealing socks, so you do the math on how much are those 100K that you owe to Tradehill going to really cost you personally and your business.

Dwolla stands to loose A LOT MORE than money if they loose this lawsuit: They can loose one or all of their MONEY TRANSMITTING LICENSES, which are very expensive and arduos to get. Whoever was the moron at Dwolla that decided erasing records from the database was a good idea should be banging his/her head against the wall just about now.

Without the licenses, Dwolla is NOTHING, just a badly designed website.

If the directors of Dwolla have some sort of functioning collective brain, they should quickly and promptly settle this issue with Dwolla before it is even brought up to trial or court settlement. They DO NOT want this on their records, but the guy that started Dwolla seems to be pretty stupid from what I gather from other colleagues, so I wouldn't be surprised if their business comes crumbling down like a house made of a deck of cards.

I am sure their angel investors are starting to crap their pants just about now. This is pretty serious.

Does anyone know whether there's a written contract for Dwolla merchant accounts?  If there was, that would prevail over the ToS or any other information on their website.

Yes. Earlier link is "https://www.dwolla.com/%E2%80%8Btos"

Wait, I can access it...testing: https://www.dwolla.com/tos

UPDATE: Something seems to be wrong with the link I posted.  The above link works.

You heard it here first. Free for all at Dwolla's house!

Confirmed. Redirects to https://www.dwolla.com/404.aspx?aspxerrorpath=/%e2%80%8btos
Apparently they find another change is in order.

I can no longer access the Dwolla TOS:

https://www.dwolla.com/​tos

You're not down with the kermit-the-frog people of iowa? Maybe the most hysterical accent in the US...

Discovery

It seems like many people in this thread are misconstruing Tradehill's legal strategy with their honest expectations.  

Like haggling, when you sue someone, you want to overstate your case, so you can 'compromise' back down to something reasonable.  I would be surprised if the Tradehill guys really felt they were going to get $2M, but it is a smart legal move to show the entirety of their losses that arguably resulted from Dwolla's chargebacks because it gives them room to negotiate towards the "fair" amount of damages.  If you start from the figure you think is fair, the most likely outcomes are that you will receive less than that.

My prediction is that Dwolla will settle for somewhere between 100k and 500k, because it seems like there is a valid argument that they did not pass liability of chargebacks onto their customers in their original TOS.  

Both of these services have been quite valuable to the Bitcoin community, and I hope they can reach a fair conclusion that allows both businesses to operate into the future.  A romantic optimism in me hopes that Tradehill will be able to use these funds to finance Money Service Business licencing across the US, becoming the first exchange that is unambiguously above-board in terms of US money transfer laws.  This will probably cost at least 300k though, so I am very cautiously hopeful.

This is an unfortunate reality of US financial regulations.  You are legally required to retain information about money transfers for a period of time in case the Feds want to subpoena it.

I am hesitant to "blame" Dwolla for having this policy: the US government has forced their hand.  This is the price you pay to be a legitimate, FINCEN-compliant, money transfer business in the US.  Anything less would expose them to liability for violating Anti Money Laundering regulations in the Bank Secrecy Act and Patriot Act. 

2M $, great!

Tuché.

May not be against the law but can be used against you in the court of law.