Posted on 05/20/2013 9:48:25 AM PDT by Sopater
The US Department of Homeland Security seized a payment processing account Tuesday belonging to Mt. Gox, the largest international Bitcoin trader, claiming the monetary exchange service falsified financial documents.
The American government has previously made it clear that officials are watching Bitcoin, a decentralized economic currency that international regulators have not yet been able to control. Many of those who favor Bitcoin use Dwolla, an Iowa-based startup that allows customers to transfer their dollars into Bitcoins.
Unfortunately for those consumers, the Department of Homeland Security issued a warrant Tuesday effectively shutting down Dwolla’s ability to process Bitcoin payments, as reported by CNET. Whether because of the DHS’ charge of operating an “unlicensed money transmitting business,” the sudden timing of the allegations, or another reason, Dwolla and Mt. Gox officials have been reluctant to comment.
“In order not to compromise this ongoing investigation being conducted by ICE Homeland Security Investigations Baltimore, we cannot comment beyond the information in warrant, which was filed in the District of Maryland [Tuesday],” said Nicole Navas, a representative for US Immigration and Customs Enforcement.
The warrant claims Mt. Gox CEO Mark Karpeles did not disclose he operated a financial transfer site when he opened a new bank account for the business. Money transmitting services, according to Gawker, are required to register with the Department of Treasury’s Financial Crimes Enforcement Network (FinCen). Mt. Gox, which is involved in roughly 63 per cent of all Bitcoin purchases, has not done so.
Despite the technicalities skeptics are wondering if Bitcoin’s friction with the Treasury department is the cause of this recent scrutiny. Senator Chuck Schumer (D-New York) said the anonymity afforded by the service provided an “online form of money laundering” and campaigned for its downfall.
“Literally, it allows buyers and users to sell illegal drugs online, including heroin, cocaine, and meth, and users do sell by hiding their identity through a program that makes them virtually untraceable,” Schumer said during a 2011 news conference. “It’s a certifiable one-stop shop for illegal drugs that represents the most brazen attempt to peddle drugs online that we have ever seen. It’s more brazen than anything else by light years.”
Most notably, proponents have asserted that Bitcoin would be impermeable in instances where WikiLeaks, for example, saw its funding evaporate as the federal government pressured PayPal to cut off the whistleblower site’s support network. Bitcoin would be more resistant to a crackdown of that nature.
Jerry Brito, a scholar at the libertarian Mercatus Center at George Mason University, told the Washington Post Bitcoin could reduce the cost of financial services by pioneering new business formats.
“Bitcoin has the potential to be a boon to the economy and a boon to merchants,” he said, adding that it could “disrupt traditional payment networks that have not been innovative for a very long time.”
A blind governmental crackdown would only serve to push Bitcoin further underground, Brito argued.
“You can’t put the genie back into the bottle,” he continued. “I hate to say it, but the Bitcoin community needs to start lobbying. It needs to start educating policymakers, lobbyists and influencers about the pros of Bitcoin and the impossibility or the difficulty in getting rid of all the bad uses.”
If govts cannot control it (and manipulate it) then they want it shut down. Good news is that the forces of liberty are far more creative than the grey suits.
Bitcoin sounds like something beyond super stupid!
They’d better go very deep underground.
What the ruling elite (banksters and rulers) cannot control they WILL destroy... after they plunder it, of course.
Look what happened to the “Liberty Dollar” for example.
A lot of us are expecting our entire economy to go underground in the near future - might as well get used to it.
Translation: "We can't collect taxes on it."
No free markets allowed. The Fed cannot tolerate that.
Like holding currency that a government is printing is smart?
Spoken like a true shill.
The banks/paypal/etc. have gotten transmitting money around to a science. If Bitcoin ever did change anything, it would be quickly bought up by BofA or similar, fees might go down for a bit, but then back up again to guarantee ROI to BofA's shareholders.
At least money is worth the paper it’s written on!!!
Obiously, but the real concern here is that Homeland Security seems to be into items other than... homeland security.
“fees might go down for a bit, but then back up again to guarantee ROI to BofA’s shareholders. “
Anyone that pays a fee to a bank is beyond super stupid or living on credit which is even worse!
When I first heard of Bitcoin, my first thought is that I would never trust some digital site to house “virtual money”. No way. Then I realized that my bank account, debit and credit cards are pretty much the same thing. I have no actual money.
Well reasoned.
dalereed ~:” At least money is worth the paper it’s written on!!!”
That is why the government wants to control it
It has value and maintains its’ value ~ better than US currency
"Well reasoned."
EGGSactly Batman...!
When TSHTF paper will be at a premium for use in the smallest room in the house OR that little building outback.
Sopater ~:(from the RT article) Despite the technicalities skeptics are wondering if Bitcoin’s friction with the Treasury department is the cause of this recent scrutiny. Senator Chuck Schumer (D-New York) said the anonymity afforded by the service provided an “online form of money laundering” and campaigned for its downfall. “
Obviously , he didn’t recieve enough election contributions from this anonimous provider.
Better to receive anonomous funds from eBay / PayPal (president Zero’s gumba’s ) electronicly. You know , better to spead the money arround with political friends , and have the govt. prosecute and eliminate the competition.
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