Here is the Seizure Warrant

[Maged]

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 +

Actually, I'm not entirely sure. What would be the legal difference between MtGox using Dwolla (a registered money transmitter) and CoinLab (also registered)? If MtGox had a company in the US that held some of their funds in the US for conveniently transferring funds between them and CoinLab, would that company also have to register as a money transmitter? What about a cashier at Wal-Mart? After all, they are accepting money and transmitting it to Wal-Mart's bank account according to the wishes of the customer! And, OH NO! They might give refunds to people using that very same money that came into their till from another customer a few minutes ago! I'm not a lawyer, but I suspect that MtGox might have a case here, at least on the Dwolla side of things. International wire transfers I don't know about...

[joesmoe2012]

Maybe this is part of the reason they wanted to remain a 100 percent Japanese based company and not have a USA based division.

[WackyWilly]

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.

All things considered, all of the rumbling when it comes to MtGox does not bode well for Bitcoin in the short term since it relies way too much upon MtGox.

Long term, BTC will survive IMHO, but short term I would not be surprised to see such a scenario being worked out by authorities, only to see BTC prices collapse once more, be it temporarily.  The reason being: trust is currently far from present in the market - on the slightest hickup BTC sees heavy drops. Yes, it then rebounds, just waiting for the next "negative news". That's not a vote of confidence. I wouldn't be surprised to see double digits within a week.

[DeathAndTaxes]

Mtgox said they spent 25mil to become fully compliant, I think mtgox itself is a registered msb and has gone through great lengths to properly verify people's identity per the aml requirements.

The list of MSBs are public record.  You could look it up yourself rather than assume:
http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

[joesmoe2012]

Mtgox said they spent 25mil to become fully compliant, I think mtgox itself is a registered msb and has gone through great lengths to properly verify people's identity per the aml requirements.

The list of MSBs are public record.  You could look it up yourself rather than assume:
http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

I can't find them in there, but does that conclusively mean the aren't registered?

"...spent 25 mil in the first year to become financially compliant in th us"

http://www.theverge.com/2013/4/1/4154500/mt-gox-barons-of-bitcoin

[cr1776]

...there's always something to frame you on.

Good book that says about the same thing, Three Felonies a Day:

http://www.harveysilverglate.com/Books/ThreeFeloniesaDay.aspx

[joesmoe2012]

...there's always something to frame you on.

Good book that says about the same thing, Three Felonies a Day:

http://www.harveysilverglate.com/Books/ThreeFeloniesaDay.aspx

This is scary, but I believe it.

[DeathAndTaxes]

I can't find them in there, but does that conclusively mean the aren't registered?

Yes.  If they aren't listed, they aren't registered.

"...spent 25 mil in the first year to become financially compliant in th us"

Says nothing about MSB (virtual currency traders didn't even need MSB registration in the "first year" of MtGox).  Doesn't specify what they did to "become financially compliant".  Even if they were financially compliant in 2010 the FinCen declaration on March 2013 was a pretty huge deal, probably the biggest legal event in Bitcoin history (for US based bitcoin related companies).

[Aseras]

the could have fixed this just by using 2 accounts to separate the money and not comingle funds.

[epetroel]

I can't find them in there, but does that conclusively mean the aren't registered?

"...spent 25 mil in the first year to become financially compliant in th us"

http://www.theverge.com/2013/4/1/4154500/mt-gox-barons-of-bitcoin

Here's what the article actually says:

"Mt. Gox estimates it costs $25 million in the first year to become fully compliant in the US. But considering a regulator could potentially swoop in and seize funds if a violation were found, it’s worth it."

Doesn't say that they actually did it, just that it's worth it to do it.  Also, if they actually did it, they wouldn't have to estimate right? They would know exactly what it cost.

Funny that they admitted they knew exactly what the risks were, but still never followed through and actually took care of it. 

[franky1]

Do you deal in or exchange currency for your customers

Does your business accept funds from customers and send funds on customers instructions

the main questionis.... did MTGOX or Dwolla customer's ever send to or receive funds DIRECTLY from the Mutim sigilum bank account(76XXXXXX13)

the requirement of a money transmission licence all depends on how the mutim sigilum LLC account was used.

if CUSTOMERS put money in or received money from the Mutim sigilum bank account(76XXXXXX13) held with the american bank Wells fargo then YES mutim siligum was involved with money transmission on behalf of customers.

paypal analogy:
if customers were given your bank account number to be used to then credit your paypal account and you repaid customers by withdrawing from paypal to then bank transfer back to customers using your BANK then yes your BANK account would need a money transmission licence.

the flip side.

if customer only funded Dwolla's own bank account with just reference numbers to ensure it reached mtgox's dwolla member ID (81x-xxx-xx10) then NO mutim siligum was not involved with money transmission on behalf of customers.

this is because as soon as it hits the Dwolla member id for mtgox, it becomes MTGOX's property and they can move their own funds through their own subsidiaries freely.

paypal analogy. someone puts money into your paypal account. you withdraw it to your actual bank account. you also deposit from your bank account back in to paypal. as soon as it hits paypal it still remains your property until you hand it to the customer.
so your BANK account is not touching customers money, just your profit/income/outgoing.

[crazy_rabbit]

Wait- did that warrant just call bitcoin a currency? Did the US government just call bitcoin a currency?

[joesmoe2012]

I would imagine that they've spent millions setting this stuff up correctly.

I think the US govt is just finding ways to nit pick because they need some excuse to seize funds.

These are both solely my opinions.

[Its About Sharing]

I would imagine that they've spent millions setting this stuff up correctly.

I think the US govt is just finding ways to nit pick because they need some excuse to seize funds.

These are both solely my opinions.

And if they do a few more of these and none of them stick, the courts are going to start to refuse to do anymore. Not to mention other countries are watching. The beauty of all this, is that there are so many exchanges and they keep growing. So, essentially you have a government/banking system going after BTC (decentralized) through an essentially decentralized exchange. Ummmm, they don't have this much time.

The anti-fragile nature of Bitcoin is already flexing its muscles. The Black Swan is here fellas. See sig...

IAS

[Technomage]

I wouldn't worry about Bitcoin here. In fact, this is where Bitcoin shows its strength. Why is the price not crashing further? Well. Let me explain that. If user X has fiat in Gox and he is afraid of the situation, what is the best way to get the money out? Bitcoin! So the user actually buys bitcoins and then transfers them out.

Bitcoin is going strong. Gox is in trouble, true. They have already been in trouble from fast usage growth, ddos and Coinlab. This is one more to add to that list. Mark has got his work cut out for him. We'll see what happens.

For now it would be nice to know how much got frozen in this. I would imagine not too much, but it would be nice to know.

[BlueNote]

What about a cashier at Wal-Mart? After all, they are accepting money and transmitting it to Wal-Mart's bank account according to the wishes of the customer! And, OH NO! They might give refunds to people using that very same money that came into their till from another customer a few minutes ago!

You hit the nail on the head. It's all a bunch of nonsense. They can say you are or you aren't, and they're always right.

[BlueNote]

No one should have to hold their hand, it is their responsibility to ensure that their business meets regulatory requirements, and every other major exchange in the states seems to have figured it out, even before the FinCEN document. I would not feel safe keeping money or BTC in Gox right now, who knows what other requirements they may have failed to meet on the Japan side of things.

They're not "an exchange in the states," and they're not a "money transmitting business" in the states either. Those claims are beyond ridiculous. They just had a Dwolla account  - which is now apparently a federal offense.

[eldentyrell]

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

The target is clearly Mtgox.

I called it almost a year ago.

Gox saw this coming and played it at least somewhat smart.  Now you know why dwolla deposits/withdrawals were taking so long.  This was inevitable, and they planned for it.

Unfortunately it amounts to their customers playing musical chairs.  My condolences to those still standing when the music stopped.

[indio007]

Well if you read the warrant it seems the FBI are confessing BTC is considered currency. Although, I hardly think that this is the official stance of the United States government.
A judgment in favor of the US would be good long term for BTC under the principal of judicial estoppel.

Other that , this warrant is defective on multiple levels (like most warrants). There is no first hand knowledge . It doesn't even claim to have heard the information from someone with first hand knowledge.

Thirdly the Final rules concerning crypto-currency BTC were only just printed in the Federal Register.
The gov't is obligated to give MTGOX a notice to register their business because under he old rules they were not a money services business.

This is simply a money grab.

[gizmoh]

Interesting read on MSB regulations:

http://contrariancompliance.com/2013/04/14/is-us-regulation-the-single-biggest-threat-to-bitcoin/