Wednesday, May 15, 2013

Feds Seize Funds of Largest Bitcoin Exchange


The US government has shutdown a key source of dollar funding for MtGox, the largest bitcoin exchange.

Dwolla, a Paypal clone popular among bitcoin users, confirmed that the online payment network had received a seizure warrant from the Department of Homeland Security.

"The Department of Homeland Security and US District Court for the District of Maryland issued a ‘Seizure Warrant’ for the funds associated with Mutum Sigillum’s Dwolla account (a.k.a. Mt. Gox)," a Dwolla spokesperson told BetaBeat. "Dwolla has ceased all account activities... for Mutum Sigillum while Dwolla’s holding partner transferred Mutum Sigillum’s balance, per the warrant."

Dwolla didn't say why the seizure happened. MtGox seems to be even more in the dark.

“Like many who have contacted us, MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox,” the company stated in a post on Facebook.

In other words, they have no idea what’s going on. “However, as of this time we have not been provided with a copy of the court order and/or warrant, and do not know its scope and/or the reasons for its issuance.”

We can only assume that the US believes some sort of crime is being committed.

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