Here is the Seizure Warrant

[gizmoh]

http://cdn.arstechnica.net/wp-content/uploads/2013/05/Mt-Gox-Dwolla-Warrant-5-14-13.pdf

The target is clearly Mtgox.

[1714881588]

1714881588

[1714881588]

1714881588

[nfurno]

It doesn't say the amount of funds in the account. Anyone know?

[Birdy]

So a Bitcoin is money now and not a commodity anymore?

[gizmoh]

It doesn't say the amount of funds in the account. Anyone know?

The warrant is drafted before a seizure,maybe Gox can enlighten us..The link is taken from this news:

http://arstechnica.com/tech-policy/2013/05/feds-reveal-the-search-warrant-that-seized-mt-gox-account/

[coincepts]

This is acting on the new guidelines set forth by FinSEC. These guidelines are not law and therefore this is not a legal proceeding.

[tclo]

So a Bitcoin is money now and not a commodity anymore?

There wasn't bitcoin in that Dwolla acct...it was about deposting and withdrawing fiat.

[Birdy]

So a Bitcoin is money now and not a commodity anymore?

There wasn't bitcoin in that Dwolla acct...it was about deposting and withdrawing fiat.

Yes, but all trading is in paying with money, where is the difference between buying DVDs then?
It reads like they see Bitcoins as currency now.

[Ultraviolet]

This is acting on the new guidelines set forth by FinSEC. These guidelines are not law and therefore this is not a legal proceeding.

Really, dude? A Court Order signed by a US District Court Judge and executed by DHS isn't a legal proceeding?

FinCen Guidelines? You didn't even read the warrant, did you?

[yokosan]

Before anybody goes and says that Gox is immune because they are in Japan, I just want to state that Japan would actually be very quick to react. In the past they have been more than happy to get rid of a foreign company if there is even a slight whiff of something dodgy going on. They don't want bullshit from foreign companies.

I expect Gox will be expelled from their office in Shibuya before June.

Based on their track record I wouldn't be surprised for a monumental fuckup, Mark has proven to be criminally negligent on multiple occasions not least of all the reaction to the 2011 hack, not to mention the pirate fiasco.

This is your last warning mark, flee the country and go somewhere safe now or you will find yourself in prison very soon. You don't want to be the only 外国人 in a Japanese prison now, do you? At least you will loose that belly of yours on one bowl of white rice and a glass of water every day.

At the very least this is grounds for him to have his visa revoked making him unable to continue working in Japan. Then it's just a case of what happens to the company and it's assets.

[jackjack]

[Kluge]

This was pretty shocking to read. They're calling Bitcoin a currency, now... same rules as the dollar (except it isn't legal tender, obv), and I guess we can now say it's recognized by the government... Hm.

Before anybody goes and says that Gox is immune because they are in Japan, I just want to state that Japan would actually be very quick to react. In the past they have been more than happy to get rid of a foreign company if there is even a slight whiff of something dodgy going on. They don't want bullshit from foreign companies.

I expect Gox will be expelled from their office in Shibuya before June.

Based on their track record I wouldn't be surprised for a monumental fuckup, Mark has proven to be criminally negligent on multiple occasions not least of all the reaction to the 2011 hack, not to mention the pirate fiasco.

This is your last warning mark, flee the country and go somewhere safe now or you will find yourself in prison very soon. You don't want to be the only 外国人 in a Japanese prison now, do you? At least you will loose that belly of yours on a bowl of white rice and a glass of water every day.

Gox isn't immune because they deal with US customers and USD. Further, Mark's Mutum Sigillum LLC is based in Delaware. If Mark is charged, and they do single him out in the warrant, he's likely to be extradited before he can even research and get a passport to a place which might not extradite him.

This is pretty much THE test case which will determine Bitcoin's future. If Gox loses, the various gov't departments will have precedent to go after EVERYTHING BTC businesses are at risk for when Bitcoin's considered a currency.

[threeip]

Who is the Maryland Snitch?

[coastermonger]

There are two sad realities here.

1) I have absolutely zero confidence in the MtGox legal defense team

2) If MtGox goes down, it will be a loooong time before bitcoin can recover

Hopefully someone can provide some relief

[Nagato]

That document was completed on May 20, 2011 and identified Mutum Sigillum LLC as a business not engaged in money services. The application asks several questions; to include, "Do you deal in or exchange currency for your customer?" and "Does your business accept funds from customers and send the funds based on customers' instructions (Money Transmitter)?" Karpeles answered these questions "no," indicating that Mutum Sigillum LLC does not deal in or exchange money, and that it does not send funds based on customer instructions.

Here is how i see things in Gox's defence,

"Do you deal in or exchange currency for your customer?"
If Mutum Sigillum LLC was setup to merely hold deposits in a US bank account, then the LLC was not directly dealing with currency exchange.
Any exchange was done by MtGox which is based in Japan and not required to be bound by US rules/regulations.

"Does your business accept funds from customers and send the funds based on customers' instructions (Money Transmitter)?"
Again if the customer funds remained in the Wells Fargo account in US and never moved from that bank account to Japan, he rightfully answered no.

[Quantus]

TLDR: the Feds found out Mt-Gox lied when setting up a bank account in the USA.  And So they just took all the money in said account.

its unknowable if this is a isolated event or part of a larger move to crack down on Bitcoin.

[TLS freedom]

Mt.Gox is going to have to prove no USD actually moved from USA to Japan when a customer put money in / took money out. If this is not the case or they can't prove it they are in trouble.
The other issue is bitcoin and if the govt is going to try to call it currency.

I'll bet the leadership is kicking themselves right now they didn't follow through selling North American Ops to coinlab... Could have avoided the US govt's nonsense and saved $50 million +

Beginning of the end for Gox?

[Fiyasko]

Oh great... Fucking defend with anything you've got.
If they win, bitcoin loses.

[Zeke_Vermillion]

Note that the warrant mentions STATE registration. There are 50 states. Something like 49 of them, plus or minus, require registration at the STATE level for this kinda biz. Think about the absurdity of this. Let's say every jurisdiction in the world had similar requirements to in the US (and to be fair, many do, though the effectiveness of enforcement is not uniform). It is thus financially impossible to run an international currency exchange without an enormous legal and compliance budget. Basically you have to be a large financial institution to do this. If you're a well-capitalized startup, then you must focus on a single market (e.g. US only, or Japan only) and pray that you can build partnerships with well-capitalized players in other markets, or else are acquired by a big financial institution that already has a presence in multiple markets.

EDIT: if you're not a well-capitalized startup, but just a software engineer playing with new technology and ideas... better stick to monopoly money or something that has no value.

[RodeoX]

Mt.Gox is going to have to prove no USD actually moved from USA to Japan when a customer put money in / took money out. If this is not the case or they can't prove it they are in trouble.
The other issue is bitcoin and if the govt is going to try to call it currency.

I'll bet the leadership is kicking themselves right now they didn't follow through selling North American Ops to coinlab... Could have avoided the US govt's nonsense and saved $50 million +

Beginning of the end for Gox?

That's what I was thinking. This could have been a non-issue if the deal had not fallen apart.  I don't get it. They saw the FinCen thing stating that they had to become a money transmitter or they will be in violation of the law. Did they think that was a joke?

[wopwop]

50$ comes in bank account from person X
... nothing happens with money ...
50$ goes out bank account to person Y


= money transmitter