Tuesday, May 14, 2013

BREAKING: Department of Homeland Security Has Seized Funds Associated with Dwolla Account of Bitcoin Dealer Mt. Gox

This is Update 2 on news that the Department of Homeland Security has served a court order to the money exchange service Dwolla, in regard to its dealings with Mt. Gox.

Earlier today, I reported on news that the Department of Homeland Security ordered the money transfer firm from transacting with the Bitcoin dealer Mt. Gox.

More details are now emerging. A representative for Dwolla told Betabeat that, “The Department of Homeland Security and U.S. District Court for the District of Maryland issued a ‘Seizure Warrant’ for the funds associated with Mutum Sigillium’s Dwolla account (a.k.a. Mt. Gox).”

According to WiseGeek.com:
A seizure warrant is a legal document that permits law enforcement officials to seize property. If often accompanies a search warrant. A seizure warrant is granted when it is believed certain property may have been used in a crime or may have been purchased with the proceeds from a crime.
The Dwolla spokesman also told Beatbeat:
In light of the court order, procured by the Department of Homeland Security, Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum while Dwolla’s holding partner transferred Mutum Sigillium’s balance, per the warrant.
Bottom line, if you were in the process of transferring money or receiving money from Mt. Gox, it is likely the United States government has your money.

I expect government harassment of Bitcoin holders to intensify. As I have pointed out many times, a key vulnerability of Bitcoin is at the exchange point between the transfer of  dollars to bitcoins and bitcoins to dollars. It appears that these exchange points will be a target of the USG, making it near impossible for the conversion of dollars to bitcoins and the reverse.

UPDATE: Details of here.


  1. A model for future bitcoin to fiat exchanges can be found in germany at bitcoin.de . The exchange acts as a intermediary to escrow the bitcoins, but the fiat side is exchanged directly between buyer and seller. The exchange does not need to have a bank account.

    Until the government makes it illegal for individuals to exchange money using standard bank transfer methods bitcoins will continue to be exchanged for fiat.

    The government will have as much success shutting down Bitcoin as it has had shutting down bittorrent.

  2. Funny how Officals can break as many laws as they wish, Lie, cheat steal and murder. CNBC published the story with he details how Eric Holder, and other bankers are being accused on racketeering and money laundering.
    The lawsuit filed by Spire Law Group, LLP.
    Within 1 day of the story being published
    CNBC senior vice president Kevin Krim found out his children were Murdered CNBC has since taken the story down- but here is link ..http://www.unexplainable.net/political-conspiracies/cnbc-published-eric-holder-and-bankers-43-trillion-lawsuit-and-kids-get-murdered.php#.UJVThtXtUE0.facebook