The Warrant against Dwolla and Bitcoin: The Beginning of the End of Bitcoin - page 3.

silverback

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Quote from: LorenzoMoney on May 15, 2013, 12:22:04 PM

I do believe that the US Government, in particular, the Department of Homeland Security, is frightened of bitcoin and has been looking for anyway possible to destroy it.

Bitcoin is no more of a threat to the US dollar than the Euro or the British pound. It is not legal tender and it cannot be used to pay taxes. The Feds probably give a rat's ass about bitcoin.

superduh

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so is bitcoin a currency or a commodity? if it's a commodity would the same rules apply?

BTC Books

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Quote from: dasein on May 15, 2013, 01:30:39 PM

I agree, you can be clever while BTC is below the rader, but that reasoning is way too cute when you're the biggest exchange and BTC market cap reaches $1 billion.

Yeah. And - in passing - I'll add that Mutum Sigillum translates contextually as "Silent Shield". Clever.

dasein

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Quote from: BTC Books on May 15, 2013, 01:27:39 PM

Quote from: dasein on May 15, 2013, 01:07:58 PM

Everyone calm down and read the warrant (page 2, emphasis added):

"As part of the account opening process, Wells Fargo required Karpeles [GOX owner] and Mutum Sigillum LLC [GOX sub] to complete a "Money Services Business (MSB) Accounts, Identification of an MSB Customer" form. That document was completed on May 20, 2011, and identified Mutum Sigillum LLC as a business not engaged in money services. The application asks several questions; to include, "Do you deal in or exchange currency for your customer?" and "Does your busienss accept funds from customers and send the funds based on customer's instructions (Money Transmitter)?" Karpeles answered these questions "no," indicating that Mutum Sigillum LLC does not deal in or exchange money, and that it does not send funds based on customer instructions."

Gox appears to have misrepresented themselves in the forms they submitted to Wells Fargo, and failed to comply with the basic MSB FinCEN regs that are already on the books. This is not a bitcoin gov takedown, just enforcement of basic MSB regs due to Gox incompetency.

I think Karpeles thought these questions through, and just got too tricky for his own good.

"Do you deal in or exchange currency for your customer?" - No. Gox exchanges money - and only in Japan. Mutum Sigillum just sends money to people.

"Does your busienss accept funds from customers and send the funds based on customer's instructions (Money Transmitter)?" - No. Mutum Sigillum has no customers - nobody pays it anything for its services. It takes Gox money and sends it to people - but those people are not customers, because they pay Mutum Sigillum nothing.

I'd be willing to bet that those are the thoughts that went through Karpeles' head as he was filling out his answers to those questions.

I agree, you can be clever while BTC is below the rader, but that reasoning is way too cute when you're the biggest exchange and BTC market cap reaches $1 billion.

dasein

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Some VC-backed exchange with fancy lawyers will inevitably emerge with the proper MSB licenses.

BTC Books

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Quote from: dasein on May 15, 2013, 01:07:58 PM

Everyone calm down and read the warrant (page 2, emphasis added):

"As part of the account opening process, Wells Fargo required Karpeles [GOX owner] and Mutum Sigillum LLC [GOX sub] to complete a "Money Services Business (MSB) Accounts, Identification of an MSB Customer" form. That document was completed on May 20, 2011, and identified Mutum Sigillum LLC as a business not engaged in money services. The application asks several questions; to include, "Do you deal in or exchange currency for your customer?" and "Does your busienss accept funds from customers and send the funds based on customer's instructions (Money Transmitter)?" Karpeles answered these questions "no," indicating that Mutum Sigillum LLC does not deal in or exchange money, and that it does not send funds based on customer instructions."

Gox appears to have misrepresented themselves in the forms they submitted to Wells Fargo, and failed to comply with the basic MSB FinCEN regs that are already on the books. This is not a bitcoin gov takedown, just enforcement of basic MSB regs due to Gox incompetency.

I think Karpeles thought these questions through, and just got too tricky for his own good.

"Do you deal in or exchange currency for your customer?" - No. Gox exchanges money - and only in Japan. Mutum Sigillum just sends money to people.

"Does your busienss accept funds from customers and send the funds based on customer's instructions (Money Transmitter)?" - No. Mutum Sigillum has no customers - nobody pays it anything for its services. It takes Gox money and sends it to people - but those people are not customers, because they pay Mutum Sigillum nothing.

I'd be willing to bet that those are the thoughts that went through Karpeles' head as he was filling out his answers to those questions.

TLS freedom

newbie

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Beginning of the End of MTGOX!!

Bitcoin is fine and trading has not been adversely effected today, the market doesn't care much I take it.

Bitcoin will survive even if we have to exchange face to face at coffee shops!!

chowderman

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That letter is fake, so fake. There is no letterhead, no district court seals, no homeland security seals, not even seals of the officials signing it. I have spent many a year working in the military and for the government. Official documents have official seals, this is BS. All of it.

This is the standard letter used by US District Courts for Search and Seizure http://www.uscourts.gov/uscourts/FormsAndFees/Forms/AO093.pdf

After processing it is stamped and signed by the district clerk as well, the letter from the OP has none of that, it screams fake.

It would look similar to this http://www.wired.com/images_blogs/threatlevel/2013/12/Carpathia-search-warrant.pdf if it were real in any capacity.

dasein

full member

Activity: 122

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Everyone calm down and read the warrant (page 2, emphasis added):

"As part of the account opening process, Wells Fargo required Karpeles [GOX owner] and Mutum Sigillum LLC [GOX sub] to complete a "Money Services Business (MSB) Accounts, Identification of an MSB Customer" form. That document was completed on May 20, 2011, and identified Mutum Sigillum LLC as a business not engaged in money services. The application asks several questions; to include, "Do you deal in or exchange currency for your customer?" and "Does your busienss accept funds from customers and send the funds based on customer's instructions (Money Transmitter)?" Karpeles answered these questions "no," indicating that Mutum Sigillum LLC does not deal in or exchange money, and that it does not send funds based on customer instructions."

Gox appears to have misrepresented themselves in the forms they submitted to Wells Fargo, and failed to comply with the basic MSB FinCEN regs that are already on the books. This is not a bitcoin gov takedown, just enforcement of basic MSB regs due to Gox incompetency.

Severian

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Quote from: Melbustus on May 15, 2013, 12:49:02 PM

The same arguments were made at the birth of the internet, but technology won the day. Bitcoin is similarly strong, and we'll end up with regulated and non-anonymous exchange points and large services, which is fine. The promise of bitcoin for most people (in the West) is reduction of fees and transactional friction, and a store-of-value; eg, Gold 2.0.

I share your faith in Bitcoin's fundamentals over the power of government. I guess my point is that Bitcoin represents the ultimate threat to the banks the support the government and they'll pull all the stops in order to protect their interests. If they can convince their security droids in their various policing agencies that Bitcoin is a threat, it will get weird and ugly before it gets better.

iCEBREAKER

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Crypto is the separation of Power and State.

Quote from: Tomatocage on May 15, 2013, 12:33:31 PM

Beginning of the Zombie apocalypse Roll Eyes

Should we set our hair on fire and run around in mass hysteria yet?

mmeijeri

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Martijn Meijering

Quote from: noedaRDH on May 15, 2013, 12:48:08 PM

be absolutely clear that you are operating within legal boundaries, or don't set up an exchange at all.

Or operate in cyberspace and the black market.

solidshotnosh

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RodeoX

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The revolution will be monetized!

I thought the title of this implies the beginning of the end of this thread.

Melbustus

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Quote from: Severian on May 15, 2013, 12:42:30 PM

...By the end of the year, I fully expect to see "Bitcoin funds terrorists in [COUNTRY]" stories popping up in the corporate media.

Well, the race is on for "legitimacy" in the public eye. With enough Silicon Valley money and mindshare, such headlines would be widely understood to be silly.

The same arguments were made at the birth of the internet, but technology won the day. Bitcoin is similarly strong, and we'll end up with regulated and non-anonymous exchange points and large services, which is fine. The promise of bitcoin for most people (in the West) is reduction of fees and transactional friction, and a store-of-value; eg, Gold 2.0.

noedaRDH

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Finding Satoshi

Beginning of the end for Gox perhaps, but not Bitcoin. In fact, this will be a good wakeup call for future exchanges: be absolutely clear that you are operating within legal boundaries, or don't set up an exchange at all.

Melbustus

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Thread title overblown. This is a crackdown on unlicensed exchange services. The bitcoin community has been saying for *years* that this would happen.

While there may be a temporary lack of liquidity if Gox can't handle this, it just spurs development of compliant (and presumably more robust) exchanges. As OP states, this wouldn't have happened if Gox had a Money Transmitting license.

It's been obvious for quite some time that bitcoin's exchange infrastructure is weak. That was emphasized last month. This just makes it even more painfully obvious.

The VC money heading into bitcoin businesses is already likely targeting licensed, robust, exchange services. We just have to wade through in the meantime.

Severian

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Quote from: LorenzoMoney on May 15, 2013, 12:22:04 PM

Why is DHS frightened of Bitcoin? Because they, rightfully so, want to protect the American people from terrorist attacks.

DHS exists, first and foremost, to protect the private banking interests that have a monopoly on the issuing of currency and credit via the Federal Reserve. "Terrorism" is always the excuse used by political and money powers when they're defending their turf or looking to expand their control over a population. The largest terrorist organization on the planet, the USG, protecting anyone from terrorism is a lesson in cognitive dissonance. In political matters, always follow the money instead of the promise of being kept safe.

Bitcoin is a threat to the reputation of the Federal Reserve and other central banks such as the ECB. The Fed, via its proxy DHS, can't come down on Bitcoin all at once. If it did, it would show Bitcoin to be the threat it actually is. It will start small like this and then slowly build. By the end of the year, I fully expect to see "Bitcoin funds terrorists in [COUNTRY]" stories popping up in the corporate media.

mmeijeri

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Martijn Meijering

Quote from: dancupid on May 15, 2013, 12:28:34 PM

It's actually the beginning of the end of 'America'.

I don't think so, but I'm afraid things will have to get even worse before they'll get better. I'm persuaded that in the end the power of cryptography will pose society a stark choice between radical liberty or tyranny, as described here. People will pull back from the brink then. But in the near future the instincts of both politicians and society at large will be to seek some sort of middle ground. It will take a long time for them to realise that none exists and to act accordingly.

Tomatocage

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brb keeping up with the Kardashians

Beginning of the Zombie apocalypse Roll Eyes

Topic: The Warrant against Dwolla and Bitcoin: The Beginning of the End of Bitcoin - page 3. (Read 5748 times)