Here is the Seizure Warrant

[bg002h]

Are all banks registered as money transmitters? It seems to me that a money transmitter should be transmitting money between _different_ people.

[repentance]

A more fair way to go about things, which should be done by sensible humans would be to say: Hey, you've got a business running, are you aware of the new requirements for licensing ? You have 6 months to comply with the licensing requirements and get a license, or you will have to close up shop.

Actually you do have 6 months from when you start operating as a money transmitter to register as such with FinCEN.  The particular piece of legislation they're alleged to not have complied with doesn't just pertain to FinCEN registration, though, it also applies to the requirement to register as a MSB in individual states - which means that further investigation could find more violations.

It's going to be hard for Mark to argue he had no idea that MtGox was acting as a money transmitter when there are posts on here made by Mark last year talking about MtGox's intention to register as such in the US and how it would be a state by state process as the exact requirements varied from one state to another.  

When Dwolla sends funds from a customer account to MtGox at the customer's request, it's without question acting as a money transmitter.  It's absurd to then claim that MtGox is not transmitting money when it transfers customer funds to the customer's Dwolla account at the customer's request.  

It will be interesting to see whether MtGox is now exposed to other financial services regulations violations.  If it was operating as a money transmitter within the US, then what obligations did it have to file reports on suspicious transactions, threshold transactions, etc with FinCEN?

PayPal tried to argue for years that they weren't a money service business and they lost despite having the enormous financial resources of eBay at their disposal.

Are all banks registered as money transmitters? It seems to me that a money transmitter should be transmitting money between _different_ people.

MtGox does this.  It transmits the BTC buyer's money to the seller (as PayPal does) - MtGox itself is not a party to the transaction.

It's worth remembering that there could actually be more user funds in the seized Wells Fargo account than in the seized Dwolla account.  MtGox has tended to limit the amount being transferred to Dwolla at any one time just in case Dwolla itself froze their account or reversed transactions.  Presumably, the funds which were "queued" awaiting transfer to Dwolla are in the seized Wells Fargo account.

It's a pity the media's probably not going to be able to snoop and find out the amounts which have been seized.

[bitcoinminer]

GOX GOT GOXXXED!

[Coinseeker]

Comply or die.

[Its About Sharing]

A more fair way to go about things, which should be done by sensible humans would be to say: Hey, you've got a business running, are you aware of the new requirements for licensing ? You have 6 months to comply with the licensing requirements and get a license, or you will have to close up shop.

Actually you do have 6 months from when you start operating as a money transmitter to register as such with FinCEN.  The particular piece of legislation they're alleged to not have complied with doesn't just pertain to FinCEN registration, though, it also applies to the requirement to register as a MSB in individual states - which means that further investigation could find more violations.

It's going to be hard for Mark to argue he had no idea that MtGox was acting as a money transmitter when there are posts on here made by Mark last year talking about MtGox's intention to register as such in the US and how it would be a state by state process as the exact requirements varied from one state to another.  

When Dwolla sends funds from a customer account to MtGox at the customer's request, it's without question acting as a money transmitter.  It's absurd to then claim that MtGox is not transmitting money when it transfers customer funds to the customer's Dwolla account at the customer's request.  

It will be interesting to see whether MtGox is now exposed to other financial services regulations violations.  If it was operating as a money transmitter within the US, then what obligations did it have to file reports on suspicious transactions, threshold transactions, etc with FinCEN?

PayPal tried to argue for years that they weren't a money service business and they lost despite having the enormous financial resources of eBay at their disposal.

Are all banks registered as money transmitters? It seems to me that a money transmitter should be transmitting money between _different_ people.

MtGox does this.  It transmits the BTC buyer's money to the seller (as PayPal does) - MtGox itself is not a party to the transaction.

It's worth remembering that there could actually be more user funds in the seized Wells Fargo account than in the seized Dwolla account.  MtGox has tended to limit the amount being transferred to Dwolla at any one time just in case Dwolla itself froze their account or reversed transactions.  Presumably, the funds which were "queued" awaiting transfer to Dwolla are in the seized Wells Fargo account.

It's a pity the media's probably not going to be able to snoop and find out the amounts which have been seized.

Really well said and thanks for the information.

This is going to be a potential thorn in the side of MtGox, but it should not be the end. But hopefully what it does is get their customers going to other exchanges (to aid in decentralizing our decentralized technology!) and cause other entrepreneurs to open up more exchanges.

What we shouldn't lose sight of here is that if we play by the rules (aka regulations) we should be fine. If they wanted to attack BTC openly, that ship has mostly sailed. I liken this to other areas where the government tried to overly enforce regulations (post internet) and was just unable to keep up with the expansion of the field in question. I'm not saying they won't be able to regulate, as I think they will. But in a sense, what has just happened is like the DDOS attacks - they only made us stronger. Other exchanges now have to get everything in order. We are truly growing quickly and will experience growing pains, all the while becoming stronger.

Remember, we are a Black Swan and anti-fragile technology (per my sig). This doesn't mean we will succeed, but we have Universe on our side.

[Its About Sharing]

Comply or die.

I tend to agree with you for once. 

[DeathAndTaxes]

Are all banks registered as money transmitters? It seems to me that a money transmitter should be transmitting money between _different_ people.

Banks are exempt from registration as a MSB.

( Limitation. For the purposes of this section, the term “money services business” shall not include:

(i) A bank or foreign bank;

(ii) A person registered with, and functionally regulated or examined by, the SEC or the CFTC, or a foreign financial agency that engages in financial activities that, if conducted in the United States, would require the foreign financial agency to be registered with the SEC or CFTC; or

(iii) A natural person who engages in an activity identified in paragraphs (ff)(1) through (ff)(5) of this section on an infrequent basis and not for gain or profit.

http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=b3dbf70d55232935bba654ea6c52ba2b&rgn=div8&view=text&node=31:3.1.6.1.2.1.3.1&idno=31


Of course Banks are subject to FinCEN regulation as a "Bank" which is a superset of the requirements of an MSB.

[lexxus]

I don't undestand people who are happy that Gox can go down. When Gox goes down and there is still nothing in to reaplace it, it will be a major blow at bitcoin infrastructure.

[DeathAndTaxes]

I don't undestand people who are happy that Gox can go down. When Gox goes down and there is still nothing in to reaplace it, it will be a major blow at bitcoin infrastructure.

A loud minority notwithstanding I don't think most people want to see Gox "go down".  However Gox does need to fix their issues and it likely would be better if Gox played a smaller role among a larger network of exchanges all over the world.

[buddrulez]

This is very bad news for the US but I am sure some braniac will find a work around, they always do!

[dmartig]

al capone got busted for tax evasion

[oaxaca]

Doyle Lonnegan: [There is a pause, and Lonnegan runs horrified to the betting booth] There's been a mistake! Gimme my money back!

 - The Sting (1973)

[crumbcake]

Is "Mutum Sigillum" a great company name when you're trying to avoid excess attention

[stick_theman]

Any one knows how much money is seized?  Anyone reading this has money seized?   

[deadweasel]

Any one knows how much money is seized?  Anyone reading this has money seized?   

We do not have the balances of the accounts that were seized. 

[Stephen Gornick]

"On May 9, 2013, the Honorable Stephanie A. Gallagher issued a seizure warrant for the contents of the Mutum Sigillum LLC account at Wells Fargo, based on the forgoing information."

I wonder if Mt. Gox knew this.   It is possible Wells Fargo simply blocked Mt. Gox from any access to their account and didn't provide info if there were an inquiry, and thus Mt. Gox wouldn't know the funds had been seized.  But if Mt. Gox was aware of the Wells Fargo account being seized it might have been nice of them to share that info with the community.

[Update: So, there were two separate account seizures.   Nobody in the media cared to discuss the May 9th Wells Fargo one?]

[BlueNote]

A more fair way to go about things, which should be done by sensible humans would be to say: Hey, you've got a business running, are you aware of the new requirements for licensing ? You have 6 months to comply with the licensing requirements and get a license, or you will have to close up shop.

When Dwolla sends funds from a customer account to MtGox at the customer's request, it's without question acting as a money transmitter.  It's absurd to then claim that MtGox is not transmitting money when it transfers customer funds to the customer's Dwolla account at the customer's request.  

Everyone "transmits money" in the course of doing business. The "customer request" here is "give me my money." Gox is not sending money to other people at customer request. The customer has an account that they are either depositing into or withdrawing from.

[K and A Traders]

Everyone "transmits money" in the course of doing business. The "customer request" here is "give me my money." Gox is not sending money to other people at customer request. The customer has an account that they are either depositing into or withdrawing from.

It's understandable that people are upset.  However, there are rules.  Not only are there rules, but the rules are fairly clear.  Not only are they fairly clear, they were further clarified a couple months ago.

There is no excuse for MtGox to not have registered with Fincen.

[bozak]

Everyone "transmits money" in the course of doing business. The "customer request" here is "give me my money." Gox is not sending money to other people at customer request. The customer has an account that they are either depositing into or withdrawing from.

It's understandable that people are upset.  However, there are rules.  Not only are there rules, but the rules are fairly clear.  Not only are they fairly clear, they were further clarified a couple months ago.

There is no excuse for MtGox to not have registered with Fincen.

Agreed that the recent clarification should have prompted Gox to register.  However, I can't find any info about any of the exchanges registering (CampBx, Coinbase, Tradehill, Coinlab, Coinsetter).  Has anyone found any evidence that any of the exchanges has registered?

[crumbcake]

Everyone "transmits money" in the course of doing business. The "customer request" here is "give me my money." Gox is not sending money to other people at customer request. The customer has an account that they are either depositing into or withdrawing from.

It's understandable that people are upset.  However, there are rules.  Not only are there rules, but the rules are fairly clear.  Not only are they fairly clear, they were further clarified a couple months ago.

There is no excuse for MtGox to not have registered with Fincen.

Agreed that the recent clarification should have prompted Gox to register.  However, I can't find any info about any of the exchanges registering (CampBx, Coinbase, Tradehill, Coinlab, Coinsetter).  Has anyone found any evidence that any of the exchanges has registered?

Aren't they relatively small compared to Mt.Gox?  Seems only reasonable that the big kids get served first.