Topic: If the US gov wanted to stop funds going into gox... (Read 2558 times)

From reading the warrant and affidavit I understood it as follows - there is another corporation called Mutum Sigillum which seems to have been setup by Mt Gox to receive payments is the US from processors like Dwolla (who probably can't / don't / won't deposit to foreign accounts). When you send money to Mt Gox (for example) through Dwolla it was being sent to Mutum Sigillum's account in the US which then transfers the money to the Mt Gox account in Japan. In this capacity and under US law Mutum Sigillum was acting as a Money Transfer Agent which required them to comply with FinSEC. Unfortunately when Mutum Sigillum opened their bank account they specifically noted that they were not in the business of transfering money for clients. When the DHS realized what was happening they presented the evidence in court - the record of wire transfers between Mutum Sigillum and Mt Gox as well as evidence from an unnamed source who was able to purchase and transfer us funds into Mt Gox through Dwolla - and received a warrant which effectively froze that Mutum Sigillum US bank account. There is nothing to indicate that this had anything to do with Bitcoin specifically just the DHS attempting to enforce money laundering laws.

Although not relevant to the law I'm assuming that a significant amount of money must have been being transferred betweeen Mutum Sigillum and Mt Gox daily for the DHS to do something about it. There is still nothing preventing you (nor I image there will be in the foreseeable future) from going to your local US bank and sending a  $100k USD wire transfer to Mt Gox. Of course the bank has to comply with FinSEC which means you can't make the transfer anonymously and it has to be reported to the government.

This is what Ripple/OpenCoin is trying to do, AFAICT. The fiat/virtual exchange use case is built in, as opposed to BTC where these third party exchanges try to build on top of a closed financial system (and end up being incredibly vulnerable targets for hackers and regulators).

The basic problem which the BTC community needs to resolve is how to set up a clean, legal, trustworthy system of moving fiat into and out of BTC quickly and easily.

Such a system, if existing, would enable the price of BTC against fiat to be truly responsive to the closest we can get to a frictionless free market.

Certainly, the US is a big player and needs to be taken into account, but its powers are not unlimited and as with all bureaucracies - there are huge inefficiencies and delays in governments attempting to exercise power - particularly in any morally suspect manner.

Ideally a number of distributed p2p exchanges would be the best solution - but we are still quite far from seeing that - as the interface between fiat and BTC always needs access to the worlds banking systems.

Perhaps the only option at present is to place one's trust in the only country which can and does stand up to the US - Russia - welcome  BTC-E!

I have no problem with governments and prefer a world with them rather than without - its just that there needs to be a balance of powers to limit the excesses and abuse of powers which governments in history have been prone to.

You guys don't really understand the world. Let me spell it out for you. The US has complete and utter control of the world financial system. It doesn't matter if you are in Japan, Iran,Switzerland or any other country the US can make you grovel.

I suggest you guys read about the oldest bank in Switzerland and how it got taken to court by the US even though it had no US operations.

Or read about how the US pressured Belgium based SWIFT to cut off Iranian banks from the world financial system. Iran has to go to extreme lengths to repatriate its export earnings. For instance Iran now has to convert earnings from natural gas exports to Turkey into physical gold and courier it across the border. In other countries it has to do barter!

So the point is that if the US wants to take down Gox it doesn't need Gox to have any US operations. Japan is America's bitch and it will gladly raid Gox's offices for it.

Not only control, but monitor the movement of.

A government wishes to control its own government-issued currency.  This should not surprise anyone.

tax minimization is more compelling that drugs or gambling

I'm suprised they would go after gox though. Gox has very stringent verification processes and such. You would think the DHS would prefer to have 90% of the transactions accounted for properly. Now where is everybody going to trade?!

The only problem with your theory is that probably all of bitcoin-related things revolve around MtGox. There are no other "real targets".

I dont think bitcoin is in the same category as either of these. P2P torrents did not go down after governments stepped in, because they cannot be blocked easily by government . Drugs also are very addictive and cannot be easily blocked, however they would be used alot more if it wasn't for government regulation. Bitcoin however can be easily blocked by government, by blocking bank transfers to exchanges. Any illegalization would also prevent any legitimate business from transacting in Bitcoin, resulting in no 'mass adoption'.

It's a nice comparison you're making in theory, but in practice it doesn't work.

Aren't the Winklevii talking about backing a new exchange?

And the boner is gone. However, I like how you think. 

The government might actually be giving people a little warning trying to deflate everything before they go in for the kill.  I mean, if your just interested in a single transaction flowing to GOX, then why shut the entire thing down?  Why not work with gox to go after the specific transaction they are after.  This was definitely target at GOX.  Some sort of lashing for the coinbase deal going bad?  Some big time investor calls in a favor at the DOJ?  Let the conspiracy theories flow. 

I just spit my Starbucks into my Adderall bottle while reading this.

Mmmph.  Didn't you forget her destitute aunt, about to be evicted?  [ / curls mustache... ]

The US DOJ would simply file criminal charges...
Against the CEO and principals of MtGox...
Exactly the way it was done against Full Tilt Poker in 2011.

MtGox would be shut down in 5 minutes...
And it would take years to sort it out.

The DOJ spent 3 years investigating FTP...
And have probably been investigating MtGox for a while...
Whether the charges would hold up in court is unimportant...
But they would center on the 1000s of US Customers.

That's why it's important to have small exchanges distributed globally.

Oh I didn't listen to a word she said. I was too busy thinking about having a GF who would be into a roleplay where I was the dirty fiat banker and she was the angst driven teen, runaway from home, living off Bitcoin. Eventually she can't resist the dirty fiat banker, she must submit. Her body betrays her...she likes it. Fast forward 3 months she has 5k in credit card debit and the sex just isn't the same. Wait what?

Weird?  Yes.

That's probably because BitcoinAshley is by no stretch of the imagination a 22 year old female.  Probably a 40ish, male, professional trader who understands that in the country of the blind the one-eyed man is king.

Or, put another way; in an overwhelmingly male, totally geek community - dominated by nothing but inexperienced greed and fueled by Jolt Cola and Modafinil - a female of desirable age will be listened to.

I've got the weirdest boner right now.

If folks think it's going to stop here; it's not. TPTB do NOT want bitcoin to undermine their fiat powers.

If you think that demand for bitcoin will go DOWN because of regulation and government fighting back, now is the time to sell all of your coins and leave. [sarc]You know, just like demand for P2P torrents went DOWN after government stepped in... just like demand for drugs went DOWN after government stepped in... [/sarc] Big, resounding LOL.

Seriously, WTF did you think would happen? Bitcoin and governments would merrily coexist? For people who think regulation and government opposition would lower demand, why did you buy Bitcoins in the first place? It seems pretty stupid to buy into something that's GUARANTEED by its very nature to be hated by EVERY SINGLE GOVERNMENT AND LARGE CORPORATION, while holding the opinion that this very hate will cause it to lose value.
So if [you] are one of these folks, please examine your cognitive dissonance. I'm not necessarily trying to make an argument that you are wrong, I'm arguing that if you do hold that opinion, buying bitcoins in the first place was not congruent with the opinion that regulation/opposition will lower demand and thus price. You are buying an asset guaranteed to be opposed/regulated with the opinion that this opposition/regulation will drive price down.
There are a LOT of people who panic sell at the hint of government regulation-related news, and these people just don't understand the epic contradiction they have embodied. Either fix the error or sell your coins. Get it? Got it? Good.