Trade Hill Exchange

What Was Trade Hill Exchange?

Trade Hill Exchange, also known simply as Tradehill, was a bitcoin exchange that was launched in June 2011 by Jered Kenna, an early bitcoin enthusiast. It was among the first Bitcoin and cryptocurrency exchanges. The exchange was shuttered in February 2013.

Key Takeaways

  • Trade Hill Exchange, also known simply as Tradehill, was an early player in the bitcoin community, offering a place to exchange bitcoin and other digital currencies for fiat currencies.
  • Tradehill was founded in 2010 by Jered Kenna, one of the first young bitcoin millionaires, and launched in 2011.
  • The exchange had problems with payments and regulation from the beginning, and it closed permanently in 2013.

Understanding Trade Hill Exchange

The founder of Trade Hill Exchange, Jered Kenna, has claimed that at its height, the exchange had 20% of the market in bitcoin trades.

Almost as soon as Trade Hill launched in 2011, the exchange began to encounter problems. In February 2012, Kenna announced that Trade Hill would be shuttering its operation due to increased regulatory scrutiny. He also added that, "Everyone at Trade Hill has also been working without pay for several months after one of our payment processors removed over $100,000 dollars from our account without notice. We decided to cover this loss for now instead of passing it on to our customers and are taking legal action against the processor."

The processor in question was Dwolla, which at the time was a startup. In 2012, Dwolla had just received $5 million in venture capital financing. In March of 2013, Trade Hill filed a lawsuit in California. In the lawsuit, Trade Hill claimed that the payments processor Dwolla had illegally charged it with over $100,000 in "chargebacks," payments that Dwolla cleared and then took back. These charges forced Trade Hill to sell all of its assets and then go out of business.

Later in 2013, Trade Hill reopened after launching a new service called Prime. Prime was a B2B digital exchange intended to facilitate the exchange of digital currencies between businesses and large investors. Unfortunately, the day Trade Hill re-launched, the U.S. financial regulator FinCEN released its new regulation on virtual currencies, which confirmed that anyone selling units of a decentralized virtual currency to another person for real currency or its equivalent should be categorized as a money transmitter.

Kenna had previously taken the initiative to legitimize Trade Hill through a partnership with the Internet Archive Federal Credit Union (IAFCU). The partnership was intended to bring Federal deposit insurance to bitcoin.

Kenna announced that he was temporarily suspending the Trade Hill platform, and he said Tradehill was canceling its partnership with IAFCU: "Internet Archive Federal Credit Union has experienced operational and regulatory issues and we are no longer able to continue our relationship at this time."

This second shutdown effectively shuttered the Trade Hill project.

The Future of Trade Hill Exchange

Trade Hill's website is inactive, but the 2014 documentary The Rise and Rise of Bitcoin provides some insight on what happened behind closed doors in the early days of Trade Hill.

Kenna briefly attempted a partnership with equities trading platform TradeZero that would allow investors to trade bitcoin in dark pools, off-chain. The deal does not appear to have been finalized, however, as TradeZero does not allow crypto trading.

Kenna reportedly has business interests outside of bitcoin and cryptocurrency. According to an article in Bloomberg, he used some of the original proceeds from his bitcoin investment to buy a building in San Francisco that he turned into a co-working and co-living space.

Kenna was hacked in 2016 and lost much of his remaining cryptocurrency holdings to an unknown hacker. The hacker used a telephone exploit to gain access to dozens of accounts in Kenna's name and ended up stealing millions of dollars of his cryptocurrency.

Kenna is also the CEO of 20Mission Cerveza, a micro-brewery and pub in Medellin, Colombia.

Article Sources

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