Bitcoin Forum

Source http://thegenesisblock.com/mt-gox-seizures-linked-silk-road-fed-testimonies/


I will just copy pate this here to save you some time :

Last summer, news that federal agents had seized a combined $5M from accounts owned by Mt. Gox roiled bitcoin markets. The warrants enabling the action cited improper filings when the company opened its bank accounts, including unlicensed operation of a money service business. Yet, written testimonies from federal regulators for the recent Senate hearings on digital currencies indicate the seizures were actually part of the much larger crackdown on online narcotics marketplace Silk Road – insight that presumably had to remain hidden at the time of the seizures due to the ongoing investigation.

Experienced market participants will recall that before and during bitcoin’s meteoric rise in popularity through April 2013, Mt. Gox dominated the exchange landscape with upwards of 70% of global trade volume. News broke the following month that the Department of Homeland Security had executed a seizure warrant for Mt. Gox’s US bank accounts based on the company’s failure to register as a money service business or appropriately indicate activity as an MSB on their bank applications.

Prevailing sentiment at the time leaned towards the notion that the government was actively cracking down on bitcoin companies, starting with the largest. Recent testimonies by federal agencies indicate that the account seizures were in fact related to the multi-year pursuit of Silk Road operators, rather than a crackdown on money transmission infractions for their own sake. In particular, the written statements not aired on television provide additional insight into the motives behind the seizures.

Notably, the statement by U.S. Immigration and Customs Enforcement (ICE) states,

“In May 2013, through an interagency taskforce led by ICE in Baltimore, Maryland, three U.S. bank accounts associated with what was then the world’s largest bitcoin exchanger, Japan-based Mt.Gox, which was moving approximately $60 million per month into a number of Internet-based hidden black markets operating on the Tor network, including Silk Road, were seized for violations of 18 U.S.C. § 1960, operating a money service business in the United States without a license. The bulk of the funds were associated with the illicit purchase of drugs, firearms, and child pornography.”

The testimony clearly draws a direct connection between Mt. Gox and Silk Road to the tune of tens of millions of dollars per month, yet still cites a violation of 18 U.S.C. § 1960 (money transmitting regulations) as the impetus for the actual account seizures. When a seemingly innocuous section from the testimony by the Department of Homeland Security is added to this, the underlying motive for the seizures become clearer. In particular, the DHS states,

“The USSS is responsible for the forensics and cyber analysis in this ongoing criminal investigation [of Silk Road] and, along with our interagency partners, will attempt to identify the site’s origin and the identity of the site administrator. As a result of this ongoing investigation, approximately $5.5 million has been seized by the USSS and ICE-HSI.”

The $5.5M seized ‘as a result of the ongoing investigation’ into Silk Road isn’t explicitly tied to Mt. Gox by the DHS statement, but when considered in conjunction with other data points it becomes clear that the two are almost certainly directly related.

In addition to being roughly the same amount as the Gox seizures, the statement is in a section describing work done by the Baltimore Field Office (same jurisdiction that issued the seizure warrant), was done in conjunction with the US Secret Service (the agency that pursued the Gox seizures, as listed in the warrant) and also lists the involvement of ICE (the agency that describes themselves as the leaders of the interagency task force behind the seizures in the first testimony cited above).

Looking backwards, it’s clear why the Silk Road connection couldn’t be noted in any court filings that would become public. If federal agents made known at the time that they were actively pursuing Silk Road it could interfere with their ongoing investigation. This also means that, at least in this case, it appears money transmission laws were enforced on Mt. Gox not simply for their own sake, but to gain insight and hinder the capital flow to Silk Road without exposing the larger goal of shutting down the international narcotics marketplace.

I asked this before, but I will ask it again, do you guys still trade at gox and do you have funds sitting there ? for people who are waiting for withdrawals, how long are you waiting now ?


and the most important, do you think gox will survive ? or will it suddenly shut down ? or you think they can solve all the problems they are having now ?

I have a $1000 withdrawl by international wire that has been pending since July. I'm reasonably certain at this point that it is money I will never see again.

All the rest of my funds were withdrawn as BTC around that time, and I haven't deposited anything since.

As for Mt. Gox's future? I don't think they have a future in BTC/USD trades, and don't understand why US folks continue to use it; there is simply no way to get your money out to a US bank account, and there's no indication that they'll ever find a solution to that. However, the last I heard, SEPA and domestic (Japanese) wire withdrawls were still operational, so it's possible they can continue as an exchanger for the EU and Japanese markets.

After gox announced doubling the daily limits for PLN I tried selling 1BTC there for PLNs and withdrawing the money (with SEPA). Two months ago. No money in my account yet.

As anecdotal as this might be, it certainly changes my prognosis. If SEPA is delayed by months as well, then I can't think of any prognosis for Mt. Gox other than death. Either they can't find a bank that's willing to work with them (in which case they won't survive), or they're secretly insolvent (in which case they're already a corpse walking).

some people on Reddit said that there is a big backlog even with SEPA and they are waiting for their withdrawals, which bring us to the big question, did anyone got their funds (fiat) out of gox since May ? what was the method (wire,SEPA...) and how long did it take ?


I really want to have a clear picture about the situation, from this news it is really hard to believe, I have a feeling that it is more than a backlog...

Sorry I counted it again - and it is not two months - it is just a month and half.

The 'funding-options' page at MtGox states:
"SEPA Withdrawals:
Due to the daily withdrawal limits imposed by our European bank, all fund transfers to SEPA accounts in Europe will take 6 weeks or less depending on the size of your withdrawal."

This is over 6 weeks now - so I made a support ticket for this. Let's see what happens.

dont expect too much from their support, you will get a late answer but wont help much, when you open a new ticket about the same issue you will get another answer but the same context.... good luck

Open a ticket. Ask for a cancellation and your money will be credited in your account balance within 1 day. Buy coins, transfer them out -> never use GOX again.

Last withdrawal took 29 days, was started on 28th November 2013. Via Sepa through Gox bank in Poland. Still got one pending thats been waiting for like 8 days, not breaking a sweat on that quite yet.

If you are one of the big boys, like HSBC, you can handle some of the business from drug cartels.

If you are new player like Gox, then the big boys will do there best to keep you out of there turf.

I was able to make a 5 figure USD withdrawal with a 5% fee via international money wire around the end of October which took about a week to clear. I had to open a ticket requesting an "expedited withdrawal" which incurs a higher 5% fee. After I initiated the transfer they were still unable to give me any concrete time-frame for it to actually execute so I demanded they cancel the withdrawal so I could just convert to BTC take the 10% haircut. Magically the transfer was completed the very next day and cleared my account a few days later.

mtgox has responded to that news article https://www.mtgox.com/press_release_20140114.html

Copy paste

TOKYO - JAPAN - January 14, 2014

Dear Customers

Recently published media accounts are inferring a link between MtGox and the former online Silk Road marketplace and other illegal services and activities. MtGox denies that it has ever knowingly assisted, agreed to assist, or willingly cooperated with anyone to use Bitcoin to engage in illegal or illicit transactions.

MtGox has always endeavored to prevent its online Bitcoin exchange service from being used for illegal or illicit purposes, including implementing AML/KYC policies and procedures which are being regularly improved and updated as MtGox has grown and had to address new threats and issues. MtGox, through its US subsidiary has been legally registered as a money services business with FinCEN as of June 27, 2013.

Regards
Mt.Gox Co. Ltd Team.

Mt.Gox Contact press@mtgox.com

Apparently people view MtGox less harshly than I would have thought.. maybe people new-ish to bitcoin?

If there's been a reoccurring theme to them that I've noticed over the years, it's incompetence.

Whatever happened to that shiny new trading engine, anyway?  Totally understandable though, even if "open-source software solved that like a decade ago, and an undergrad CS major could probably fix their shit in a semester."

it's like play the ultimate monopoly game (;)

ps0-> on my square now... I am doing research on natural language (not only spoken one) but signals in general. My layer 3 address is the same 18.x :: 3ffe

Semiotics: the study of signs

http://www.youtube.com/watch?v=rEgxTKUP_WI

ps1-> jsut for fun

https://ircs-web.thc.org/

--good lucky every one.

Only thing that could save Mtgox is to start trading Litecoin.

got both € and btc there - a nice extra on the price makes it worth it. I received 3/3 SEPA withdrawals in last two month, delay was 3-6weeks.

I somehow liked mt.gox, my first exchange with higher price than everyone else and this flavor of risk "will they process withdrawal this  time". But recently I feel fucked. I am waiting more than two months on my last withdrawals( and from my perspective quite decent money is on the stake ). I am getting tired of that game I am thinking on switching to something else although not much  choice in my country

Well I am on the other end, waiting for an ill advised wire transfer to show up in my account. I have been waiting for months. Why oh why did I send money to Gox I have no idea. I thought how could the largest exchange not take me as a new customer. I was going to buy my coins and put them in cold storage. Never happened. Uggh

I am now almost 100% certain that Gox immediately used my wire transfer to pay either someone else's withdrawal or their own bills. My money is likely gone forever.

I have just over $120k sitting in my account on MtGox at the moment with no bids on the orderbook.

When I think it's time to buy I will do so but right now I have no plans for buying and holding BTC.

Time to buy might have nothing to do with the current Bitcoin price itself. These days I've been using it as a medium of transfer between exchanges and different coins.

I know there's a lot of haters of Altcoins around here but these people are going to realise soon enough that some of the Alts are going to become worthwhile investments and are going to be here for the long term.

I think only a few of them are what I'd call viable in the long term, most of them are complete shit.

Do tell, which are viable, which are shit.

no please don't, I don't want this thread to go out of context....

All are shit besides those you hold. And bitcoin, regardless.