Dwolla, the person-to-person payments innovator based in Iowa and backed by The Members Group, has been hit this week with a multi-million dollar suit, filed by TradeHill, a Bitcoin exchange operator, that alleges racketeering, false advertising, breach of contract and more.
The suit – filed in federal court in San Francisco – names Dwolla and two of its officers.
In a blog posted by TradeHill CEO Jered Kenna, the suit is explained this way: "we at TradeHill believe we unjustifiably lost tens of thousands of dollars when we used Dwolla as our money transmitter during June and July 2011. We spent months attempting to contact Dwolla to resolve this dispute but were met with silence or obfuscations. To this day, though Dwolla has claimed these losses were due to chargebacks, we have not received any kind of documentation accounting for those losses. Regardless, Dwolla's contracts and advertisements from the time specifically and repeatedly highlighted a 'no chargeback' policy."
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