Mt.Gox Co. Ltd registered to be compliant MSB with FinCEN

[vokain]

I'm just wondering how the WSJ got wind of this before anyone else.

http://online.wsj.com/article/SB10001424127887323873904578574000957464468.html

WASHINGTON—The world's largest bitcoin trading exchange appears to have taken a key step to comply with U.S. anti-money-laundering rules and potentially avoid additional run-ins with authorities.

A company listed as Mt. Gox this week registered as a money services business with the Treasury Department's Financial Crimes Enforcement Network, according to FinCen's website. Tokyo-based Mt. Gox, which says it handles about 80% of all trading in the virtual currency, couldn't immediately be reached for comment.

FinCen in March started applying traditional money-laundering rules to "virtual currencies" amid growing concern that new forms of digital cash are being used for illicit activities. Those rules mandate that exchanges register with FinCen, follow stricter bookkeeping requirements and report transactions of more than $10,000.

About a month after the edict, the Department of Homeland Security seized an account tied to Mt. Gox, alleging the company and a subsidiary were conducting transactions "as part of an unlicensed money service business."

According to FinCen's website, the agency received Mt. Gox's registration on Thursday. The online form listed a street in Dover, Del., as the company's address.

MSB Registration Status Information

Date: 06/28/2013

MSB Registration Number: 31000029348132
Registration Type: Initial Registration
Legal Name: MtGox Inc
DBA Name:
Street Address: 615 S Dupont Hwy
City: Dover
State: DELAWARE
Zip: 19901

MSB Activities:
Money transmitter, Other

States of MSB Activities:
Alabama, Alaska, American Samoa, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District Of Columbia,
Federated States Of Micronesia, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Marshall Islands, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands,
Ohio, Oklahoma, Oregon, Palau, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee,
Texas, Utah, Vermont, Virgin Islands, US, Virginia, Washington, West Virginia, Wisconsin, Wyoming
All States & Territories & Foreign Flag: All States/Territories

Number of Branches:

Authorized Signature Date: 06/26/2013

Received Date: 06/27/2013

[jeannie]

I guess they have no choice if they want to exist as the major Bitcoin exchange.

[vokain]

Here's the full text:

Bitcoin Exchange Makes Apparent Move to Play by U.S. Money-Laundering Rules
Company Listed as Mt. Gox Registers With Treasury Department
By JEFFREY SPARSHOTT
WASHINGTON—The world's largest bitcoin trading exchange appears to have taken a key step to comply with U.S. anti-money-laundering rules and potentially avoid additional run-ins with authorities.

A company listed as Mt. Gox this week registered as a money services business with the Treasury Department's Financial Crimes Enforcement Network, according to FinCen's website. Tokyo-based Mt. Gox, which says it handles about 80% of all trading in the virtual currency, couldn't immediately be reached for comment.

FinCen in March started applying traditional money-laundering rules to "virtual currencies" amid growing concern that new forms of digital cash are being used for illicit activities. Those rules mandate that exchanges register with FinCen, follow stricter bookkeeping requirements and report transactions of more than $10,000.

About a month after the edict, the Department of Homeland Security seized an account tied to Mt. Gox, alleging the company and a subsidiary were conducting transactions "as part of an unlicensed money service business."

According to FinCen's website, the agency received Mt. Gox's registration on Thursday. The online form listed a street in Dover, Del., as the company's address.

A spokesman for FinCen had no comment on the development. Earlier this month, FinCen's director, Jennifer Shasky Calvery, said that "those offering virtual currencies must comply with…regulatory requirements, and if they do so, they have nothing to fear from Treasury."

Mt. Gox's move may bring the company in line with Treasury's rules, but could also open the exchange to increased regulatory attention.
"It gives them the color of legitimacy," said Mercedes Kelley Tunstall, a partner with the law firm Ballard Spahr LLP, who works on banking compliance issues. "It suggests that they get it, that they need to be careful in these areas. It also means that now they have put themselves on the radar screen and they need to have policies and procedures to watch out for fraudulent activity and illegal activity."

Mt. Gox already had taken measures to beef up its identification procedures for users who deposit or withdraw traditional currencies, a central tenet of anti-money-laundering procedures. In May the company said all user accounts must be verified in order to perform any fiat currency deposits or withdrawals. Verification includes submission of a valid photo ID and proof of residence such as a utility bill or tax return, according to the website.

At the time, Mt. Gox said it had more than doubled its verification support staff.

More recently, Mt. Gox halted U.S. dollar withdrawals. The company said it needed to make systems improvements amid increased trading volume.

The recent regulatory attention paid to bitcoin-related companies has likely caused some banks to become leery of doing business with such companies, attorneys have said.

But becoming registered with FinCen or state agencies that have requirements for money transmitters may not make financial institutions more comfortable working with such firms, Ms. Tunstall said.

"I think that the virtual currency industry still needs to mature before banks will feel comfortable with them," she said.
The rising popularity of virtual currencies, while no more than a drop in the bucket of global liquidity, is being fueled by Internet merchants, as well as user concerns about privacy and jitters about traditional currencies in Europe.

—Andrew R. Johnson contributed to this article.

[ardana123]

well that should stem fears of Gox trying to operate outside of the law a little bit

[usahero]

That is great news. USA is the source of $$$, and without $$$ the market would drop down.. Now with FED $$$, everyone will benefit from this. Good job MtGox.

[worldinacoin]

There are advantages and disadvantages.  The greatest disadvantage is that the treasured anonimity may be gone forever, but the advantage is that Bitcoin gets into the main stream so that more people can know of it and use it as well as "trust" it since it is now FinCEN approved.   You don't have to worry about Mtgox accounts getting banned and problems getting your money.

[brandnewx]

MtGox's willingness to be regulated under strict structuring laws is a clear indication that they are very legit; therefore, they have nothing to fear anything from the US government. I don't see anything wrong with it. MtGox is regulated in Japan. It's not some shady 3rd-world country there. It's Japan. They have real office you can walk to. MtGox people are not anonymous. They have posted photos of themselves working in the office.

MtGox is not the problem that's happening to Bitcoin right now. Heck, today's price slump is probably just a coordinated attack by big holders so that they could get more cheaper coins. That's the tactics they got so many BTCs the first place.

[Tranz]

Will Dwolla come back now?

[Severian]

Heck, today's price slump is probably just a coordinated attack by big holders so that they could get more cheaper coins. That's the tactics they got so many BTCs the first place.

The price drops are a result of regulation. Bitcoin's price was parabolic before regulators and those Bitcoiners that pay attention to them sunk their teeth into Bitcoin.

[zoinky]

Even though many people would like to see Gox leave, I like this.

[brandnewx]

Heck, today's price slump is probably just a coordinated attack by big holders so that they could get more cheaper coins. That's the tactics they got so many BTCs the first place.

The price drops are a result of regulation. Bitcoin's price was parabolic before regulators and those Bitcoiners that pay attention to them sunk their teeth into Bitcoin.

That's just being ignorant. MtGox registered as a MSB with FinCEN. It's all about anti money laundering that the US government wants. Bitcoin trades and prices are not under any regulation, unless MtGox registers as a market maker with SEC and CFTC, and then they would have to follow SEC rules regarding how they should process the exchange orders.

[byronbb]

Someone can just set up a secret dark exchange on tor if being anonymous is so important. The biggest exchange being regulated by FINCEN is not a step backwards in the experiment that is bitcoin.

[Coinseeker]

80% of Bitcoin trade just got regulated.  I love this for more reasons than one.  Here's a   to the libertarians.  Pwned!

[Severian]

That's just being ignorant. MtGox registered as a MSB with FinCEN. It's all about anti money laundering that the US government wants.

Ignorance is thinking that lining up with what "the US government wants" is good for Bitcoin.

Thus far, it's proven bad for Bitcoin.

[ArticMine]

Long term this is very bullish. I suspect that MTGox is in the process of reaching a settlement with the US Federal Government and this registration is part of that process. Now paradoxically in the short term this can be very bearish since it takes out or mitigates the bears' fear of not being able to get their USD out of MTGox, so they will be more motivated to sell on MTGox. One also has to watch the spread between MTGox and Bitstamp here.

[brandnewx]

80% of Bitcoin trade just got regulated.  I love this for more reasons than one.  Here's a   to the libertarians.  Pwned!

Here we go again, do you understand that FinCEN does not and cannot regulate security trading? It's not their job and they don't care. MtGox registers as a money transmitter, not a market money with SEC and CFTC.

This is clearly a step forward, well unless you are one of the bad guys who lives off by laundering black money, that is. If that's the case, Bitcoin is not for you. Go launder your money somewhere else, and keep BTC clean.

[ehoffman]

Someone can just set up a secret dark exchange on tor if being anonymous is so important.

Well, that's the problem...  However anonymous you want to be, there will always be a point along the chain where you want to trade to or from fiat.  And unless you meet from person to person to trade some fiat for BTC, or want to trade some higher amount, then there will always be the government keeping an eye on the fiat.

The only way to stay truly anonymous is to not involve fiat at all...  And, BTC without a fiat price tag attached to it is worthless (in fiat term...).

[Coinseeker]

80% of Bitcoin trade just got regulated.  I love this for more reasons than one.  Here's a   to the libertarians.  Pwned!

Here we go again, do you understand that FinCEN does not and cannot regulate security trading? It's not their job and they don't care. MtGox registers as a money transmitter, not a market money with SEC and CFTC.

This is clearly a step forward, well unless you are one of the bad guys who lives off by laundering black money, that is. If that's the case, Bitcoin is not for you. Go launder your money somewhere else, and keep BTC clean.

I agree it's great news!  Bitcoin needs to come out of the shadows.  Anonymous transactions are only useful for criminals.  This is the beginning of taking Bitcoin away from Libertarian nut jobs and legitimizing it along side fiat.  Coexist...not one or the other.  A great win against zealots.  Bitcoin may have hope after all, although I fear in the minds of the masses, the negative stigmas attached to Bitcoin may be too far ingrained.  Time will tell.

[brandnewx]

That's just being ignorant. MtGox registered as a MSB with FinCEN. It's all about anti money laundering that the US government wants.

Ignorance is thinking that lining up with what "the US government wants" is good for Bitcoin.

Thus far, it's proven bad for Bitcoin.

It's not about lining up with governments. It's about legal framework of how this world works. Do you seriously think you can just open an online fiat exchange and get away without being regulated? You must be dreaming. If you're going to go mainstream, you're going to be regulated. That's the end of it.

I get what you meant though. You probably hate fiats and your dream is probably about a world where Bitcoin is truly independent from fiats, that you could use it to pay for everything from foods to rent and entertainment. That's a long way from here. As long as you deal with fiats, you have to be regulated under fiats rules.

[Coinseeker]

That's just being ignorant. MtGox registered as a MSB with FinCEN. It's all about anti money laundering that the US government wants.

Ignorance is thinking that lining up with what "the US government wants" is good for Bitcoin.

Thus far, it's proven bad for Bitcoin.

It's not about lining up with governments. It's about legal framework of how this world works. Do you seriously think you can just open an online fiat exchange and get away without being regulated? You must be dreaming. If you're going to go mainstream, you're going to be regulated. That's the end of it.

I get what you meant though. You probably hate fiats and your dream is probably about a world where Bitcoin is truly independent from fiats, that you could use it to pay for everything from foods to rent and entertainment. That's a long way from here. As long as you deal with fiats, you have to be regulated under fiats rules.

Warning!  Rational thinking is met with severe hatred around these parts.     It sure is fun to watch the zealots squirm though.