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Author Topic: If the US gov wanted to stop funds going into gox...  (Read 2494 times)
ihsotas
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May 15, 2013, 06:12:27 PM
 #21

The basic problem which the BTC community needs to resolve is how to set up a clean, legal, trustworthy system of moving fiat into and out of BTC quickly and easily.

Such a system, if existing, would enable the price of BTC against fiat to be truly responsive to the closest we can get to a frictionless free market.

Certainly, the US is a big player and needs to be taken into account, but its powers are not unlimited and as with all bureaucracies - there are huge inefficiencies and delays in governments attempting to exercise power - particularly in any morally suspect manner.

Ideally a number of distributed p2p exchanges would be the best solution - but we are still quite far from seeing that - as the interface between fiat and BTC always needs access to the worlds banking systems.

Perhaps the only option at present is to place one's trust in the only country which can and does stand up to the US - Russia - welcome  BTC-E!

I have no problem with governments and prefer a world with them rather than without - its just that there needs to be a balance of powers to limit the excesses and abuse of powers which governments in history have been prone to.



This is what Ripple/OpenCoin is trying to do, AFAICT. The fiat/virtual exchange use case is built in, as opposed to BTC where these third party exchanges try to build on top of a closed financial system (and end up being incredibly vulnerable targets for hackers and regulators).
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esenminer
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May 15, 2013, 08:36:23 PM
 #22

There is a "sister" bank that actually holds the funds of gox in New york even though gox is based in Japan. It seems to me that if what they were doing here was simply attacking bitcoin then they would seize this banks funds but they haven't.

This leads me to think that they are just trying to control the ways you put funds into and out of gox.

From reading the warrant and affidavit I understood it as follows - there is another corporation called Mutum Sigillum which seems to have been setup by Mt Gox to receive payments is the US from processors like Dwolla (who probably can't / don't / won't deposit to foreign accounts). When you send money to Mt Gox (for example) through Dwolla it was being sent to Mutum Sigillum's account in the US which then transfers the money to the Mt Gox account in Japan. In this capacity and under US law Mutum Sigillum was acting as a Money Transfer Agent which required them to comply with FinSEC. Unfortunately when Mutum Sigillum opened their bank account they specifically noted that they were not in the business of transfering money for clients. When the DHS realized what was happening they presented the evidence in court - the record of wire transfers between Mutum Sigillum and Mt Gox as well as evidence from an unnamed source who was able to purchase and transfer us funds into Mt Gox through Dwolla - and received a warrant which effectively froze that Mutum Sigillum US bank account. There is nothing to indicate that this had anything to do with Bitcoin specifically just the DHS attempting to enforce money laundering laws.

Although not relevant to the law I'm assuming that a significant amount of money must have been being transferred betweeen Mutum Sigillum and Mt Gox daily for the DHS to do something about it. There is still nothing preventing you (nor I image there will be in the foreseeable future) from going to your local US bank and sending a  $100k USD wire transfer to Mt Gox. Of course the bank has to comply with FinSEC which means you can't make the transfer anonymously and it has to be reported to the government.
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