DHS seizure of Mt Gox Dwolla Account. Speculating a Probable Cause.

[bitsalame]

The closure was due to Karpeles' lack of having a MT / MSB license in the state which he set up the Dwolla / Sigllium* LLC.  The warrant PDF stated he answered "No" to several MT / MSB questions.  Just an agent had used it enough to connect the dots and have the power to actually have a judge issue some papers.

I don't think it had anything to do with Satoshi Dice or the Coinlab stuff.

Oh, speculation thread.   Yeah I'll say this + Coinlab is going to signficantly screw them over or close Gox eventually.  Unless they can meet the required paperwork and there's no jail time or however it works out. 

Nah, MtGox can't be closed by the US, way out of the US jurisdiction.
The only thing that can happen is that MtGox will lose the US market at worse, but I can imagine at least two ways to bypass any ruling against Mutum Sigillum and be right back on track with Dwolla again.

[MAbtc]

The closure was due to Karpeles' lack of having a MT / MSB license in the state which he set up the Dwolla / Sigllium* LLC.  The warrant PDF stated he answered "No" to several MT / MSB questions.  Just an agent had used it enough to connect the dots and have the power to actually have a judge issue some papers.

I don't think it had anything to do with Satoshi Dice or the Coinlab stuff.

Oh, speculation thread.   Yeah I'll say this + Coinlab is going to signficantly screw them over or close Gox eventually.  Unless they can meet the required paperwork and there's no jail time or however it works out. 

Nah, MtGox can't be closed by the US, way out of the US jurisdiction.
The only thing that can happen is that MtGox will lose the US market at worse, but I can imagine at least two ways to bypass any ruling against Mutum Sigillum and be right back on track with Dwolla again.

"Bypass any ruling against Mutum Sigillum"? How does that work?

They can't "close" it in the sense of say, a suspended corporation. But this really boils down to how well Mt Gox is managed in the case that more accounts are targeted. The feds have jurisdiction over US accounts and can obtain jurisdiction over many foreign accounts (e.g. in Japan). Hence, liquidity becomes king. IMO, this isn't about whether the feds can close Gox, it's about how badly it can bleed it from the inside out. If they continue to serve the US market in the face of, say, an increasingly threatening situation from the US government, they better get smart about where they hold funds and how they batch cashouts.

[SEC agent]

Account siezure isn't the only tool in the US governments toolbox.

[sve9mark]

The closure was due to Karpeles' lack of having a MT / MSB license in the state which he set up the Dwolla / Sigllium* LLC.  The warrant PDF stated he answered "No" to several MT / MSB questions.  Just an agent had used it enough to connect the dots and have the power to actually have a judge issue some papers.

I don't think it had anything to do with Satoshi Dice or the Coinlab stuff.

Oh, speculation thread.   Yeah I'll say this + Coinlab is going to signficantly screw them over or close Gox eventually.  Unless they can meet the required paperwork and there's no jail time or however it works out.  

Nah, MtGox can't be closed by the US, way out of the US jurisdiction.
The only thing that can happen is that MtGox will lose the US market at worse, but I can imagine at least two ways to bypass any ruling against Mutum Sigillum and be right back on track with Dwolla again.

"Bypass any ruling against Mutum Sigillum"? How does that work?

They can't "close" it in the sense of say, a suspended corporation. But this really boils down to how well Mt Gox is managed in the case that more accounts are targeted. The feds have jurisdiction over US accounts and can obtain jurisdiction over many foreign accounts (e.g. in Japan). Hence, liquidity becomes king. IMO, this isn't about whether the feds can close Gox, it's about how badly it can bleed it from the inside out. If they continue to serve the US market in the face of, say, an increasingly threatening situation from the US government, they better get smart about where they hold funds and how they batch cashouts.

We better hope that Mt Gox was smart about where they hold funds and how they conduct cashouts. With USD making up 84% of the total currency exchange volume; Mt Gox at 76% of a $1.26 billion dollar market; having two US bank accounts seized and your largest liquidity steam cut off all at once could spell disaster if you didn't preform the proper due diligence in risk management. Mt Gox has assured its clients it will cover any funds that were seized.

[samson]

Only small time buyers use Dwolla as the maximum transfer limit is $5000.

The US Government seized all the money and decided to keep it as they are fully entitled to do under their own laws.

Apparently they did this to protect the American people.

Do you feel more or less protected when your money is sezied by your goernment ?

What I'd like to know is, who absorbed the cost of this ? Did any individual customers lose money or was the cost of this
absorbed by MtGox / Dwolla ?

[crazy_rabbit]

The closure was due to Karpeles' lack of having a MT / MSB license in the state which he set up the Dwolla / Sigllium* LLC.  The warrant PDF stated he answered "No" to several MT / MSB questions.  Just an agent had used it enough to connect the dots and have the power to actually have a judge issue some papers.

I don't think it had anything to do with Satoshi Dice or the Coinlab stuff.

Oh, speculation thread.   Yeah I'll say this + Coinlab is going to signficantly screw them over or close Gox eventually.  Unless they can meet the required paperwork and there's no jail time or however it works out. 

Nah, MtGox can't be closed by the US, way out of the US jurisdiction.
The only thing that can happen is that MtGox will lose the US market at worse, but I can imagine at least two ways to bypass any ruling against Mutum Sigillum and be right back on track with Dwolla again.

"Bypass any ruling against Mutum Sigillum"? How does that work?

They can't "close" it in the sense of say, a suspended corporation. But this really boils down to how well Mt Gox is managed in the case that more accounts are targeted. The feds have jurisdiction over US accounts and can obtain jurisdiction over many foreign accounts (e.g. in Japan). Hence, liquidity becomes king. IMO, this isn't about whether the feds can close Gox, it's about how badly it can bleed it from the inside out. If they continue to serve the US market in the face of, say, an increasingly threatening situation from the US government, they better get smart about where they hold funds and how they batch cashouts.

We better hope that Mt Gox was smart about where they hold funds and how they conduct cashouts. With USD making up 84% of the total currency exchange volume; Mt Gox at 76% of a $1.26 billion dollar market; having two US bank accounts seized and your largest liquidity steam cut off all at once could spell disaster if you didn't preform the proper due diligence in risk management. Mt Gox has assured its clients it will cover any funds that were seized.

Really? All the info they had about Dwolla/DHS seems to have been removed from their site, or am I missing something?

[Pale Phoenix]

Only small time buyers use Dwolla as the maximum transfer limit is $5000.

I keep reading this, but what exactly is "small time" about a $5000 per transaction limit? You can do 5 transactions in a row on the same day at a cost of $1.25 without ever leaving your desk or filling out any forms. Also, business accounts have a $10,000 per transaction limit.

Not that there's anything wrong with being "small time," as I imagine most of us were exactly that when we started out, but I think you underestimate the demographic using Dwolla.

[superduh]

Only small time buyers use Dwolla as the maximum transfer limit is $5000.

The US Government seized all the money and decided to keep it as they are fully entitled to do under their own laws.

Apparently they did this to protect the American people.

Do you feel more or less protected when your money is sezied by your goernment ?

What I'd like to know is, who absorbed the cost of this ? Did any individual customers lose money or was the cost of this
absorbed by MtGox / Dwolla ?

entitled to is subjective. if mtgox didn't commit any crimes the money should be returned with interest (as if the gov would ever pay interest on their messups)