Central Texas Gunworks LLC found itself without a Bitcoin payment processor last week as Atlanta based BitPay abruptly dropped the firearms seller from service. According to the company’s owner, US Army veteran Michael Cargill, the move came without warning or explanation. This, in spite of the fact that his company is a duly licensed firearms dealer engaged in lawful commerce in a gun-friendly state. As a result, Central Texas Gunworks had no choice but to change processors. With only a few days’ notice, the team from CoinVoice reportedly worked overtime to implement online Bitcoin payment capability for the retailer.
For his own part, Cargill says that he was taken by surprise by BitPay’s freeze of his account and expected to have an opportunity to meet with BitPay CEO Tony Gallippi soon to discuss the matter. BitPay’s terms of service as listed on its website explicitly prohibit firearms related transactions. However, Central Texas Gunworks claims that BitPay was fully aware of its business model at the time the company signed up for service. Whether the restrictive provision was present from the beginning or BitPay added it after dropping Central Texas Gunworks is unknown. What is clear is that BitPay has made a business decision to join mainstream payment processors, such as PayPal, in declining to facilitate commerce in weapons and ammunition.
Bitcoin has proven very popular among civil Libertarians, many of whom are likely to be firearms owners or supporters of gun rights, especially in Texas. Firearm sales are among the most regulated transactions in the United States. Indeed, “firearms are the only product that requires an FBI background check prior to purchase,” according to Michael Cargill. BitPay has built its business around the idea that Bitcoin is a disruptive technology that empowers consumers and businesses by providing a low cost, secure, independent way to transact business over the internet. BitPay’s decision is especially baffling, since it seems to run counter to the spirit of Bitcoin, though it is unlikely to harm the company in any significant way.
Central Texas Gunworks is the first known company in the United States accepting Bitcoin in exchange for firearms, ammunition, and training. The company’s retail storefront also boasts one of the first Bitcoin ATMs in the US. The ATM promotes adoption of crypto currency by providing purchasers with an opportunity to take a small discount by paying with bitcoins (firearms sellers often allow a small discount on cash purchases), while Central Texas Gunworks saves the processing fee associated with accepting credit cards. As firearms generally sell for several hundred dollars each, recapturing fees spent on processing can add a substantial amount to a retailer’s bottom line.