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DHS Shuts Down Dwolla Payments To and From Mt. Gox
An anonymous reader sends this excerpt from BetaBeat:
"The Department of Homeland Security appears to have shut down the ability to use Dwolla, a mobile payment service, to withdraw and deposit money into Mt. Gox, a Bitcoin trading platform. ... A representative for Dwolla told Betabeat that the company is 'not party' to this matter and encourages those with questions to reach out to Mt. Gox or the DHS. 'The Department of Homeland Security and U.S. District Court for the District of Maryland issued a 'Seizure Warrant' for the funds associated with Mutum Sigillium's Dwolla account (a.k.a. Mt. Gox),' he said. 'In light of the court order, procured by the Department of Homeland Security, Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum while Dwolla's holding partner transferred Mutum Sigillium's balance, per the warrant.'"
The government finally decided to care and used the one achilles heel of BitCoin...conversion to and from dollars. If BitCoin had some innate value, it wouldn't be a problem, but since it's primary use is as an exchange currency for dodging taxes and selling goods on the black market, this change is going to seriously impact the value of the currency.The government can't control BitCoin, but it can control US financial institutions and other companies that need to interact with those financial institutions.
We'll now see how well the BitCoin market can operate as a completely stand-alone entity.
"Don't blame me, I voted for Kodos!"
Control of currency makes control of people easier....
A warrant from the district court of Maryland, does anyone know whether thats likely to be a state tax issue? If it were truly a federal concern, youd think the warrant would come from a federal court....
Can any lawyers comment?
In fact, I think we need a new Department: DERP - Department of Earnings from Role Playing. Then we can finally shut down the other online currencies like WoW Gold that threaten the almighty buck!
blingtables -A INPUT -s mtgox -j REJECT
blingtables -A OUTPUT -d mtgox -j REJECT
I have issues.
they can have half my gold from killing goblins as long as i dont have to share the rest of the loot.
---Saying gnome 3 is better than windows 8 not so much a compliment as it is damning with light praise.
I think maybe some one from DHS wanted to generate some bad publicity for bitcoins. Now they can buy some and make a little money.
I'm not a lawyer, but I used to work in a law library, and that's know enough to know that "U.S. District Court for the District of Maryland" is a federal court, not a state one.
Space game using normal deck of cards: http://BattleCards.org
And if they use the revenue to fund military research, they could call it DERPA.
Space game using normal deck of cards: http://BattleCards.org
Contrary to what people have said Bitcoin has all the same government protection any other property does. This could be the DHS looking into the billion dollar attacks on gox as a form of terrorism/cyberthreat. They've just cut off the most likely way for the attackers to cash out.
Obama administration knows that they'll be branded fascist after the last week's revelations. Guess they figured they might as well own it and spank the technology they don't like. They got nothing to lose reputation-wise at this point.
Any guest worker system is indistinguishable from indentured servitude.
So the government just makes up the law as it goes along huh.
Anonymous money isn't supposed to exist in the US in a post-11-sept world. There's basically no way to legally act as an exchange for bitcoins, IANAL by any means, but my understanding is basically that these exchanges exist because no one has gone after them, not because they're overly legal. My *guess* here is that this is the first of many take-downs relating to bitcoin exchanges and anti-money laundering legislation.
I think you're trying to write something in another language.
Please check English in your browser for posting, and hit the refresh key.
Thanks!
-- Tigger warning: This post may contain tiggers! --
I can't believe we've gone this many comment and nobody has mentioned that "Mutum Sigillium" sounds like the name of a inter-galactic criminal from Dimension X.
You are welcome on my lawn.
Extra butter and the refillable size please. I'm gonna be here for a while.
I've bought some pretty nice stuff with bitcoins that I've mined.
Anyways, people like you are the suckers who will let the government do anything it chooses because the evil thing they do only targets ( kiddieporn | gambling | drugs ) so they should be allowed to do it as they please, because clearly only those people will be affected.
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
There's no such thing as innate value. Value is context-dependent. All money is funny money. It's just a question of what brand of humor you prefer.
The US Dollar is like Jay Leno. Dull and unimaginative, but shows up for work on time every night.
Bitcoin is like Richard Pryor. Offensive, unstable, unpredictable, implicated in tax-evasion, and prone to setting itself on fire.
with FinCEN as required to here: http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html which is part of their anti-money laundering efforts; Or at least I can't find it in the search here: http://www.fincen.gov/financial_institutions/msb/msbstateselector.html
If we consider some of the other issues already at play here, ie http://www.electronista.com/articles/13/05/07/facebook.square.dwolla.airbnb.mt.gox.hundreds.of.others.named/
What becomes pretty obvious is that this is almost certainly related to the money laundering legislation, or rephrased: 'what you thought you could just violate the various laws in place for money exchanges because you did it with big hard to guess numbers?'
RIP BITCOIN. It was a dumb idea full of hubris anyways.
mod parent up
There's no such thing as innate value. Value is context-dependent. All money is funny money. It's just a question of what brand of humor you prefer.
The US Dollar is like Jay Leno. Dull and unimaginative, but shows up for work on time every night.
Bitcoin is like Richard Pryor. Offensive, unstable, unpredictable, implicated in tax-evasion, and prone to setting itself on fire.
So where does the "funny" bit come in for Bitcoin? Only I remember Richard Pryor actually making me laugh.
Cheers,
"What in the name of Fats Waller is that?"
"A four-foot prune."
The likelihood that Mt Gox was complying with the "Know Your Customer" anti-money-laundering rules that apply to all financial institutions that handle currency was approx. zero. I'm not surprised in the least. If a bank was doing what Mt. Gox was, (as in, not even pretending to comply with the law), the same thing would happen.
(That's not to say that disobedience of money laundering never occurs, just that experienced banks are substantially better at hiding it.)
Most of your world is made up of things have innate value. Here's a few examples:
All of these items have intrinsic value because they are functional. Could you use any one of them as currency? Yes.
But even if someone won't accept your item as currency: its intrinsically valuable because you could use it yourself.
Food: can be eaten, tools can build things, shelter may keep out the weather. Functionality defines value.
The value of gold as an intrinsic is based on its nearly unique property of very slow oxidation: it does not readily rust. Which means, if gold were plentiful, it would still have tremendous value: we would start plating cars with the stuff!
No, you're the sucker who thinks he can stop them, rather than running for cover like everyone else.
I'm sure it would end up managed as a sub-department under the Homeland Electronic Regulatory Panel.
For a small customer like yourself, nothing more than ID is required, which you've supplied. Once you start moving decent amounts of cash, the institution receiving the money is required to know something about the activities the cash came from. It doesn't matter that the currency was BitCoins; the same rules still apply. There are reports to file, records to keep, etc. For instance, a bank is expected to report activities like a hot dog cart suddenly depositing stacks of $20's well out of proportion to a plausible amount of sales.
Not complying with these rules (which is "Financial Institution Regulatory Framework 101") is not going to end well.
Mt. Gox was a shoestring operation that got in WAY over its head. (As in, actual banks have entire departments of employees dedicated to pretending to comply with these kinds of rules, warehouses (or tape libraries) full of documents stored away, etc.)
I think you're giving them too much credit. The DHS, like the TSA, is a very stimulus-driven organism. More likely they discovered some suspicious activity was utilizing Dwolla with Bitcoin, and decided to break the link between the two. The intelligence community in the US generally avoids bad PR as long as possible.
Which is why the TSA is so beloved of us all, and why none of us cheered when Yukari Mihamae groped the TSA agent back...
http://www.huffingtonpost.com/2011/07/17/yukari-mihamae-61yearold-_n_900969.html
The only real surprise in that case is that you can't buy T-shirts with her face on it.
Yes, Mt. Gox had some anti-money-laundering measures in place. But the legal requirements go far beyond merely verifying the legal identities of your customers, which is all that page covers. (If that was all KYC involved, banks would not need entire large departments dedicated to that function.)
How is this different from DHS sending a letter to VISA telling them they can't process transactions for anyone trying to buy something off the Diablo III auction house?
Janet Napolitano's cocaine allowance was hit hard by the sequestration. Now she is on a rampage to get her 'Smack' back by any means.
ugg, I was about to sign up for Mt. Gox too. thanks for the post
Mt. Gox has issued a statement:
https://mtgox.com/press_release_20130515.html
"MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox. MtGox takes this information seriously. However, as of this time MtGox has not been provided with a copy of the court order and/or warrant and does not know its scope and/or the reasons for its issuance. MtGox is investigating and will provide further reports when additional information becomes known.
Regards
Mt.Gox Co. Ltd Team."
https://mtgox.com/press_release_20130515.html
Anti money laundering laws need to go.
I finally got interested in Bitcoins (like always, too late) and wanted to buy one yesterday. :-)
Anyway, I wonder why this falls under the authority of the Orwellian "Department of Homeland Security". Doesn't such a matter belong to the FBI or the Secret Service?
Where has this plague of saying "reach out to" come from when people mean "speak to" or "contact"? It gives the impression of some kind of emo touching session.
Oolite: Elite-like game. For Mac, Linux and Windows
Oh you silly hidebound 'merkin...
Is it a strange coincidence that this news comes out around the time of the next fork? http://mineforeman.com/2013/05/13/last-forking-warning/ Is there some evil government conspiracy going on to bring bitcoin down, or is it perhaps some kind of "crash and cash" scheme, or can i leave my tinfoil hat at home?
If you're not up for reading factual accounts of money, try reading Terry Pratchett's "Making Money".
Food takes you through times of no gold better than gold takes you through times of no food.
Gold only has value because we assign it. It has no value other than as a means of keeping score.
Just like all other currencies.
It does have some residual utility that, for example, the modern "copper" penny or paper note doesn't, but the copper coins are worth more intrinsically than if they'd been manufactured from gold coins if the exchange of money was not based on agreeing that gold is valuable.
Which is why we use copper, not silver, the best conductor we have.
Cash is next.
...neutralizing... any potential whistleblowers even at the state and local levels.
Within the year, the Right (or the White House; same diff) will slowly roll out a campaign that untraceable cash transactions are the lifeblood of criminals and terrerists and thus should be phased out. Upper limits on cash transactions for anything will be first, then - just like car rentals (a literal expression of freedom) - no cash purchases of communication products or services (read: burners) will be allowed. This will also help out finding and
It's for you own safety, citizen.
sorry DERP is already taken http://www.derp.org/
Run, run away, and see how much you change.
Running away from the future you don't want will just leave you always running
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
and you've registered with FinCEN as an MSB as required by law?
pffft, banksters, always evading the law to make a buck.
And the web of transactions occurring with that would form the DERPANET?
Those of us using BitCoin use it because it blows the dollar away for convenience in certain types of transactions (by which I don't mean "drugs" - Tide Unscented remains the king there, followed by US cash).
Tide Unscented?? OK, you lost me there. I mean, it's a detergent, right? Is there some secret association of Tide Unscented with illegal drugs or drug buying that I don't know about? I admit I'm just an uncool AC who's post will likely be below most /. users' visibility threshold, but still... What am I missing here?