MtGox on the Brink of US Indictment

[nebulus]

No, they are not.

[sigfawn]

http://contrariancompliance.com/2013/05/16/dwolla-account-seizure-reveals-mt-gox-on-brink-of-us-indictment/

mtgox shouldn't have been using dwolla in the first play. wires are fine. total overraction

[usscfounder]

This is stupid. Overkill.

[Xuxu911]

Thank you for up

[kaputt]

I understand that mtgox is important to many btc users right now, but the users don't have to invest so much reliance on mtgox. I might be missing something, but why keep bitcoins at mtgox? If you had to use mtgox to convert USD to BTC, that is understandable, but after that, keep your bitcoins in your wallet or cold storage (please back them up properly). Also, if users of bitcoins would start accepting bitcoins more, they wouldn't have to rely as much on mtgox to get their bitcoins. Let's start enjoying the benefits of bitcoins more instead of trying to use them like a centralized fiat currency.

I like mtgox, but I don't like relying on them too much.

[Dasneko]

As i understand it its a conflict of definitions. The US is mad at MTGox for doing "money transfers" without doing the right paperwork and such for it. But since Bitcoin cant really be defined as "money" right now they might have to settle this in court. Basically the law is out of date and need an update to cover this particular case.

[sprout]

Bitcoin Magazine reports that "every other major Bitcoin exchange" has been compliant for some time now with the US federal law that tripped up MtGox, and are making progress in state licensing as well ...

BitInstant: We Have Money Transmitter Licenses in 30 States

[world_travel]

down with gox

[juanbllanos]

Thanks, Juan, for the analysis, and the warrant/affidavit pdf.

I'm still a little fuzzy on the details, esp. the role of Mutum Sigillum - is this the primary route used by Gox to for transfers, or the primary route for US transfers, or do other similar entities exist? Was Mutum Sigillum known to exist before the seizure?

Mutum Sigillum was MG's subsidiary in the US.  Sometimes, for fiscal and regulatory reasons a foreign corporation needs to have a local subsidiary (my company does in Mexico, for example).  The problem is that Mutum Sigillum is not (a) registered with FinCEN as a money transmitter, or (b) have money transmitter licenses where required.  This is big trouble for MG.  The case may get worse than it is, or maybe the freezing was used as a 'warning' until they get their act together.

[canadense]

Hmmm. May 16 news. Anything else?

[juanbllanos]

As i understand it its a conflict of definitions. The US is mad at MTGox for doing "money transfers" without doing the right paperwork and such for it. But since Bitcoin cant really be defined as "money" right now they might have to settle this in court. Basically the law is out of date and need an update to cover this particular case.

I'm afraid that's not how it works.  The momeny FinCEN equated virtual currency exchangers and administrators to money transmitters, those two activities ARE money transmission in the eyes of the law.  Note what FinCEN director said last week: “[Our guidance] is more of a technical guidance on something that already exists.”

[jackinloadup]

Yeah to me FinCEN is in a catch 22. They don't want to say that Bitcoin is "real money" per the original guidelines they released. Stating that virtual currencies were not money. At the same time FinCEN wants to make sure bitcoin is regulated. It seems to me that they can't regulate it without admitting that bitcoin is money.

Sense FinCEN said it was not money that means its a commodity. Which, from my understanding, means that FinCEN doesn't have juristiction over it.

Either way it seems to be a win. If FinCEN admits it's money and regulates it. It will bring legitimacy to bitcoin and people will flock in. If, on the otherhand, FinCEN doesn't admit it's money then things will continue the way they are. Mostly unregulated.

To me it seems inevitable that FinCEN will have to recognice bitcoin as money so they can draft laws for it.

[kaputt]

Yeah to me FinCEN is in a catch 22. They don't want to say that Bitcoin is "real money" per the original guidelines they released. Stating that virtual currencies were not money. At the same time FinCEN wants to make sure bitcoin is regulated. It seems to me that they can't regulate it without admitting that bitcoin is money.

Sense FinCEN said it was not money that means its a commodity. Which, from my understanding, means that FinCEN doesn't have juristiction over it.

Either way it seems to be a win. If FinCEN admits it's money and regulates it. It will bring legitimacy to bitcoin and people will flock in. If, on the otherhand, FinCEN doesn't admit it's money then things will continue the way they are. Mostly unregulated.

To me it seems inevitable that FinCEN will have to recognice bitcoin as money so they can draft laws for it.

This is what I've thought for a while.

[aigeezer]

I wish the newbies who say you can't have an interesting newbie discussion could see this thread, but they are too busy posting "+1" and "bump" and "this forum sux - let me in RIGHT NOW" in other newbie threads.

Pro tip: when you have to put in your four hours of reading, see what the regulars said about this Gox theme. Look in the Press section, for instance. You guys held your own in discussion just fine, imho. The newbie thing will be over before you know it.

[bitcoinbear]

I can see why there would be speculation, but has anyone verified that MtGox volume is substantially lower than before the news about Dwolla?

You can look at bitcoincharts.com, it looks like the percentage of trades happening on MtGox has dropped since the news came out. They are loosing market share to places like BitStamp and CampBX.

[lithiumfinn]

I was surprised to see that the value didn't drop very much if at all when the whole Mt. Gox/Dwolla thing happened. I thought for sure it would cause at least a little panic.

[bitcoinbear]

I was surprised to see that the value didn't drop very much if at all when the whole Mt. Gox/Dwolla thing happened. I thought for sure it would cause at least a little panic.

Why would that cause panic? There are plenty of other ways to get money into or out of bitcoin.

[PrintMule]

Only way to cause panic is for big traders to start selling lower and lower and lower, to buy back later again - but overdoing it

[eteam]

I was surprised to see that the value didn't drop very much if at all when the whole Mt. Gox/Dwolla thing happened. I thought for sure it would cause at least a little panic.

Why would that cause panic? There are plenty of other ways to get money into or out of bitcoin.

Because it is the larger bitcoin exchanger plus the seizure of LR brought some sort of anxiety in the online community.