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Trucoin, the company, which allows users to buy bitcoins almost instantly with a Visa or MasterCard, is open for business.
Trucoin sent out an email Tuesday night to its list of interested users announcing that the company, which allows users to buy bitcoins almost instantly with a Visa or MasterCard, was open for business.
Billed as “the fastest way to buy bitcoin,” Trucoin is available to those users who are residents of Florida, Massachusetts, Missouri, Montana, New Jersey, New Mexico, South Carolina and Texas.
A couple of Reddit posts popped up within hours of the email, and Trucoin’s president Chris Brunner dropped in to answer questions. He also responded to an AMA request last week.
A big one issue many had was how the company dealt with the possibility of chargebacks, i.e. someone buying bitcoins then asking the credit card company to reverse the transfer.
Brunner was unwilling to tackle that one head-on publicly, noting only that their system “takes several dozen factors into consideration upon enrolling a new customer, but for 95% of the population it takes less than two minutes.”
Brunner also said the company charges a 5% fee, “most of which goes to the card networks in the form of interchange.”
As far as the geographic limitations of the service, the seven states listed above are the only states in which the company is legally registered as a money transmitter, though Brunner said another 25 states were pending and that full coverage for the country was expected by early 2015.
As far as the company’s supply of bitcoins, Brunner said in the AMA:
“We source Bitcoin from other Bitcoin exchanges, at this time.
“Several security measures are in place to protect coins that are temporarily held with us, including multi-signature wallets and cold storage. Trucoin USA is a partnership of regulated money transmitters and is subject to regular audits by more than one state.”
And as far as the company’s access to users’ data:
“We retain some data for seven years, as mandated by certain FATF member countries,” he said. “As a US-based money services business, Trucoin USA is subject to the same reporting requirements as all other financial institutions. These are mostly related to activity that is likely criminal in nature (i.e. SAR reports) and does not affect typical customers.
“Regarding gag orders, I think you're referring specifically to National Security Letters, and I can safely state that we have not received one. I will no longer be able to speak to that, if that were to ever change. [Editor’s note: No warrant canary found on the Trucoin site, either.]
“The only time we share data with other companies is when we're checking for fraud. For example, as part of our fraud mitigation program, we check cross-merchant blacklists to ensure that the card being used is not an unreported stolen card.”
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