The US bitcoin exchange, Tradehill, is seeking to improve its security by partnering with online identity verification vendor miiCard.
miiCard will give users at the bitcoin exchange a digital passport that can be used to prove they are who they say they are, which is a service the security vendor provides to others online in real-time to verify identities. The user themselves controls their own identify in this scenario, and can take their passport with them wherever they go.
In the case of TradeHill this means users must use their miiCard before withdrawing any funds from the bitcoin exchange, making the platform, which was relaunched in March this year after security problems last summer, newly compliant with anti-money laundering (AML) and know your customer (KYC) tracking regulations.
TradeHill now has US$400,000 in seed funding in its new iteration and is targeting business and accredited investors. Newcomers will be given $75 in credit to explore the available trading options, but it will take $10,000, equivalent to 200 bitcoins, to activate a full account.
According to James Varga, chief executive officer (CEO) of miiCard, referring to its security problems last summer: "Tradehill isn't alone in their experience of identity theft. New account fraud in the US increased 50% last year, driven largely by identity theft. It is critical for businesses dealing in bitcoin or any other regulated financial service to provide a level of trust and confidence for their customers while meeting compliance thresholds."