Bitinstant

BitInstant logo

BitInstant was a bitcoin exchange start-up based in New York City. Founded in 2011 by and Charlie Shrem, BitInstant provided a means to rapidly pay traditional funds to bitcoin exchanges. As of January 2014, BitInstant’s website is no longer available, displaying only a blank page.[1] Its blog was unavailable as of October 31, 2014.

Contents

Main information

  • Country: United States
  • Headquarter: New York
  • Type: Payment Processor
  • Round: First
  • Cost: $1.5 million
  • Date: 31-Oct-2012
  • Investors: Winklevoss Capital, David Azar

BitInstant was a service that provided rapid transfers of funds between and into bitcoin exchanges with support for various payment methods. It is now offline after founder Charlie Shrem faced legal issues.

Bitinstant made most deposits happen instantly – within a matter of seconds in ideal cases, and in an absolute worst-case scenario they will still aim to have funds into your exchange account before a stated maximum deadline (on average about 30 minutes depending on various conditions).

History

BitInstant was founded in 2011 by Gareth Nelson and Charlie Shrem. The company allowed its customers to purchase the bitcoins via more than 700,000 stores, including Walmart, Walgreens, and Duane Reade.[2]

In September 2012, when presidential candidate Mitt Romney was threatened with blackmail unless he paid an anonymous group $1 million in bitcoin, BitInstant’s Erik Voorhees offered to purchase the bitcoin for him without a fee.

According to Shrem, transaction volume grew rapidly during 2013 as the price of bitcoin rose, and “basically tripled” during April.

As of May 2013, BitInstant had 16 employees when Winklevoss Capital invested $1.5 million in the company.[3] According to the Winklevosses, the funding is “meant to allow the company to further scale up its staff and product.” BitInstant later announced a partnership with the Winklevosses’ bitcoin investment fund.[4]

In June 2013, BitInstant announced integration with Jumio, an online payment company led by Daniel Mattes. Jumio’s Netverify software allows BitInstant to verify customers’ identity. BitInstant also restricted bitcoin transactions in some states, stating that “We have temporarily limited transactions in some locations, and we apologize for the inconvenience. We believe that these measures are vital to serving the interests of both BitInstant and the greater bitcoin community.”.

In July 2013, BitInstant suspended services, saying it wanted “to improve the code based on trends they noticed” in nearly 17,300 customer service complaints. Several days earlier, a class action lawsuit had been filed on behalf of customers, claiming failure to perform services and false representation.

On January 27, 2014, company CEO Charlie Shrem was arrested at New York’s John F. Kennedy International Airport and charged with “conspiring to commit money laundering by selling more than $1 million in bitcoins to users of the black market website Silk Road…”.[5] BitInstant website has been blank since then.

Criticism

BitInstant received many complaints from customers concerning transaction processing delays sometimes of several days. In response to complaints, BitInstant CTO Gareth Nelson stated that “we are all stressing out and working day and night (literally) to get things fixed and hope to have a proper resolution for the backlogged orders”.

The New York State Department of Financial Services issued a warning letter to BitInstant, asking it to comply with regulations governing money transmission businesses.

Methods of Payment

BitInstant How-to: Turn cash into Bitcoins at a bank

U.S. – USD

  • Cash deposit (7-11, Walmart, CVS, and Moneygram locations)
  • Dwolla
  • Redeemable code from MtGox, Bitstamp and BTC-E

Brazil – BRL

  • Boleto
  • Banco Rendimento

Russia – RUB

  • Qiwi
  • Cypberplat

Fund destinations

Fees & Rates

BitInstant dynamically calculates fees based on various factors, and start at 0.26%. Discounted rates may be available for certain high-volume traders through special arrangement, contact them for more details Their rates can be viewed on their Rates & Fees page, as well as on their homepage.

Customer Service

API

Documentation can be viewed on their API page

External Links

See Also on BitcoinWiki

References

  1. ↑ Feds charge Bitcoin start-up founder with money laundering
  2. ↑ Meet the Bitcoin Millionaires
  3. ↑ https://techcrunch.com/2013/05/17/with-1-5m-led-by-winklevoss-capital-bitinstant-aims-to-be-the-go-to-site-to-buy-and-sell-bitcoins/ With $1.5M Led By Winklevoss Capital, BitInstant Aims To Be The Go-To Site To Buy And Sell Bitcoins]
  4. ↑ BitInstant to partner up with Winklevoss twins’ bitcoin fund
  5. ↑ Bitcoin Operators Charged in Illicit Drug Site Bust