Mt. Gox is an unlicensed money exchanger dealing in "crypto-currency." - page 6.

EuroTrash

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Quote from: Quantum_Negatum on May 15, 2013, 12:22:01 PM

http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

Are ANY exchanges registered with FinCEN? Mt. Gox might be the first of many targets.

One would wonder why the other longest operating major exchanges (in order of volume) operate outside of the land of the free - like Russia, Slovenia and China.

Sarcasm aside - moving the money through a US Wells Fargo account registered to himself, seriously? So amateur of Mr Karpeles. Hope this serves him a lesson if he still needs one. There's a guy who did the same in Germany (bitcoin-24) and got both his funds frozen and a court case pretty fast.
Correction: the note says "HSI was able to see that the money passed through a Wells Fargo account, number 7657841313, which was created by a single authorized signer: Mark Karpeles". So the account is likely on the company name - he's the only authorized signer.

dasein

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This is good, we want the biggest bitcoin exchanges to have the proper MSB licenses.

esse83

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Seems convenient that mtgox is down atm - no transfering of btc out or selling. Other exchanges are going down.

Kluge

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Quote from: Lethos on May 15, 2013, 11:31:02 AM

How expensive are the US money service licences anyway, surely Mt.Gox could of afforded them, as one of the largest exchanges out there, right?

Don't quote me, but I'm pretty sure if you operate in the US as a whole, you'd need a MSB license from every single state (unless the particular state doesn't regulate it). The logistical, legal, and straight-up cash requirements are probably upward of $5m and probably in excess of $300k annually after all the lawyer and accountant fees... just to do business in the US.

wopwop

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50$ goes into bank account from person A
50$ goes out bank account to person B

= money transmitter = need license

doesn't really matter if something happens with play money in between.

Dalib

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Quote from: mgio on May 15, 2013, 12:51:23 PM

Except the government didn't, and still doesn't consider Bitcoin to be a "currency". It's digital property, and MtGox lets you buy and sell it. MtGox broke no laws here.

I also think, that Bitcoin is a digital commodity, not currency.

Quote from: BitPirate on May 15, 2013, 12:42:45 PM

I wouldn't be surprised if Coinbase were behind this.

it is too much of bad news about MtGox, since Coinbase wants to run this business in the USA ...

esse83

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502 Bad Gateway - I get this on and off from mtgox.com atm.

Nemesis

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Quote from: DeathAndTaxes on May 15, 2013, 12:03:28 PM

Quote from: fitty on May 15, 2013, 11:57:28 AM

It has nothing to do with Bitcoin. He was exchanging SOMETHING for USD. CampBX by all reports is properly licensed. Their Dwolla is working just fine.

Of course it has to do with Bitcoins.

Amazon accepts USD for DVD. They also pay USD for DVDs. Is amazon (and every retail business in the world) a MSB? I mean commerce by very definition is the acceptance of money for goods & services.

However FinCEN provided guidance in March, 2013 indicating that virtual currencies* are subject to MSB regulation:
http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

Thus it isn't that MtGox exchange "something" for real currency but that they exchanged "something which is regulated by FinCEN" for real currency.

Prior to March, 2013 there was no real reason for MtGox to register, post March, 2013 I am not sure how/why (as the worlds largest Bitcoin exchange) they thought they would remain under the radar.

* Only entities which buy/sell/trade/exchange virtual currencies for real currencies fall under MSB regulation. FinCEN does indicate that buying or selling goods & services for virtual currency is not a MSB.

I agree... DHS has a solid case against MtGox.

There is no way around it. If you guys didnt pay attention re-read this :

Quote

The informant simply created accounts with Dwolla and Mt. Gox, bought bitcoins, and then changed them back into dollars. Tracing that money, HSI was able to see that the money passed through a Wells Fargo account, number 7657841313, which was created by a single authorized signer: Mark Karpeles, the president and CEO of Mt. Gox

Also check Paypal Acceptable Use Policy, buying a selling checks are also considered as money service business. This is nothing special, its clear as night and day.

This also help Coinlab to have a solid case against Mt.Gox.

I would withdraw all the cash out b4 the case proceed any further. Bank wiring still works and its gonna be for a little while.

BitChick

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Quote from: Fiyasko on May 15, 2013, 12:57:24 PM

i hope they get a really good lawyer rather than think "bah we know the law, we can do this without hiring a lawyer"

Or hopefully this weekend all of these problems with exchanges will be at the forefront of the conference. We are in desperate need of exchanges that are professional and can handle the large load of new incoming traffic as well as the ability to be compliant with the laws of all nations to truly succeed long term. Seems obvious, but with small companies there are growing pains and Mt. Gox is really a small company trying to act bigger than they are.

Ultraviolet

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That's some shithouse journalism to say the least. The warrant doesn't shut down Gox. It just seizes their US Dwolla account.

Fiyasko

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i hope they get a really good lawyer rather than think "bah we know the law, we can do this without hiring a lawyer"

esse83

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"The Department of Homeland Security (DHS) executed a seizure warrant to shut down the world’s largest bitcoin exchange for operating an unlicensed money transmitting service, according to documents filed in a Maryland court on Tuesday."

http://thehill.com/blogs/hillicon-valley/technology/299921-feds-crack-down-on-bitcoin-exchange

That seems incorrect according to what the warrant actually says - but I guess the next logical step. The tentacles of the US goverment reach around the world. Volumes are near zero @ gox atm.

mgio

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Quote from: esse83 on May 15, 2013, 11:30:05 AM

"Tracing that money, HSI was able to see that the money passed through a Wells Fargo account, number 7657841313, which was created by a single authorized singer: Mark Karpeles, the president and CEO of Mt. Gox. The Dwolla account shows transfers to Dwolla going back to at least December 2011, according to the warrant.

The special agent then explains what appears to be the smoking gun: Karpeles specifically denied he was going to get into the currency exchange business. The warrant reads:"

He probably was too naive to understand his middleman role as a currency exchange. They seem to have a solid case against Mark.

Except the government didn't, and still doesn't consider Bitcoin to be a "currency". It's digital property, and MtGox lets you buy and sell it. MtGox broke no laws here.

BitPirate

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Quote from: Lethos on May 15, 2013, 12:36:18 PM

Quote from: Kazu on May 15, 2013, 11:42:19 AM

Quote from: Lethos on May 15, 2013, 11:31:02 AM

Strange how it's taken this long to discover Mt.Gox wasn't doing things by the books (according to local laws), as I am fully aware they operate out of Japan, However they do apparently have a US company, with connected US accounts.
Which also the US operations were suppose to been taken over by another company by now, which didn't happen, so they in trouble with that as well.

Their stack of cards seems to be falling apart. Ouch.

There has been a decent number of other exchanges doing the same things shutting every year, obviously not lasting very long, yet they only looked at one of the biggest out there now? Talk about odd. How expensive are the US money service licences anyway, surely Mt.Gox could of afforded them, as one of the largest exchanges out there, right?

It isn't about "affording" anything. Its about the regulations that are imposed and the requirements one must meet to get a license which essentially prevent many businesses from operating.

I've studied what is needed in the UK and apparently we are well known for being strict in this area. However since I have no intentions of operating in the USA, I don't know it's requirements or costs.

Mt.Gox when I used it (last year) was annoying with all the verification of your details, so it easily did all of what was necessary for the requirements. So does it really all come down to the fact it wasn't declaring that account was being used to move money around?

Exactly -- it looks to me like they were generally acting in good faith in terms of the regulations. They were quite strict, and just for a minority of payment flows at that. As it's not that easy for a foreign company to open a bank account in the US, it looks like they just did what they could for Dwolla.

I wouldn't be surprised if Coinbase were behind this.

Lethos

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Quote from: Kazu on May 15, 2013, 11:42:19 AM

Quote from: Lethos on May 15, 2013, 11:31:02 AM

Strange how it's taken this long to discover Mt.Gox wasn't doing things by the books (according to local laws), as I am fully aware they operate out of Japan, However they do apparently have a US company, with connected US accounts.
Which also the US operations were suppose to been taken over by another company by now, which didn't happen, so they in trouble with that as well.

Their stack of cards seems to be falling apart. Ouch.

There has been a decent number of other exchanges doing the same things shutting every year, obviously not lasting very long, yet they only looked at one of the biggest out there now? Talk about odd. How expensive are the US money service licences anyway, surely Mt.Gox could of afforded them, as one of the largest exchanges out there, right?

It isn't about "affording" anything. Its about the regulations that are imposed and the requirements one must meet to get a license which essentially prevent many businesses from operating.

I've studied what is needed in the UK and apparently we are well known for being strict in this area. However since I have no intentions of operating in the USA, I don't know it's requirements or costs.

Mt.Gox when I used it (last year) was annoying with all the verification of your details, so it easily did all of what was necessary for the requirements. So does it really all come down to the fact it wasn't declaring that account was being used to move money around?

Quantum_Negatum

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Quote from: dandirk on May 15, 2013, 12:31:48 PM

Quote from: Quantum_Negatum on May 15, 2013, 12:22:01 PM

http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

Are ANY exchanges registered with FinCEN? Mt. Gox might be the first of many targets.

I thought Bitfloor was... look what that got us... lol

You are right. Bitfloor was registered.

I can't find CampBX...

I did find Coinbase and Coinlab.

dandirk

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Quote from: Quantum_Negatum on May 15, 2013, 12:22:01 PM

http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

Are ANY exchanges registered with FinCEN? Mt. Gox might be the first of many targets.

I thought Bitfloor was... look what that got us... lol

Quantum_Negatum

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http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

Are ANY exchanges registered with FinCEN? Mt. Gox might be the first of many targets.

dbanga85

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Quote from: yokosan on May 15, 2013, 12:07:22 PM

Quote from: Quantum_Negatum on May 15, 2013, 11:10:08 AM

The real panic sells haven't even started.

Oh you are soooo right.

Compared to Gox the other exchanges have such small volume. When people flock to sell on the other exchanges single digits will occur.

Just one twitchy finger is all it takes.

Think about that for a moment.

One twitchy finger.

Keep dreaming bro

yokosan

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Quote from: Quantum_Negatum on May 15, 2013, 11:10:08 AM

The real panic sells haven't even started.

Oh you are soooo right.

Compared to Gox the other exchanges have such small volume. When people flock to sell on the other exchanges single digits will occur.

Just one twitchy finger is all it takes.

Think about that for a moment.

One twitchy finger.

Topic: Mt. Gox is an unlicensed money exchanger dealing in "crypto-currency." - page 6. (Read 9339 times)