That news organization said it had obtained a copy of an email sent by Tradehill to clients that indicated that their accounts were frozen as of Aug. 23 and that transitioning an account to the IAFCU involved providing a government-issued photo ID along with a Social Security number.
Clients who declined were offered the opportunity to liquidate their holdings, the report said.
IAFCU is led by Brewster Kahle, founder of digital library Internet Archive who serves as IAFCU's chairman. For several years he has been a vocal proponent of Bitcoin and is said to have occasionally paid some employees in the currency. In a blog post, for instance, he declared Bitcoin "the local currency of the Internet."
Neither IAFCU nor Tradehill responded to a request for comment on Monday.
In recent months, Bitcoin has run into mounting scrutiny by the federal government amid concerns that the digital money – which has anonymity built in – potentially runs afoul of initiatives to curb money laundering and funding for terrorist groups.
That has triggered a range of responses including investigations in New York and account seizures by the U.S. Department of Homeland Security.
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