Multiple sites are reporting that Dwolla has been served with legal process by the Department of Homeland Security (specifically Immigration and Customs Enforcement) to freeze transactions with Mt. Gox.
According to Ars Technica
“The Department of Homeland Security and US District Court for the District of Maryland issued a ‘Seizure Warrant’ for the funds associated with Mutum Sigillum’s Dwolla account (a.k.a. Mt. Gox),” a Dwolla spokesperson told NYO’s BetaBeat. “Dwolla has ceased all account activities… for Mutum Sigillum while Dwolla’s holding partner transferred Mutum Sigillum’s balance, per the warrant.”
Homeland Security cuts off Dwolla bitcoin transfers | Politics and Law – CNET News.
A copy of the warrant was posted by Ars Technica:
It appears the accounts were seized because Mt. Gox did not register as a “money transmitter” — the same charge that brought down e-gold. By coincidence, one of Bode & Grenier LLP’s attorneys was the lead prosecutor of the e-gold case. It appears that some U.S.-based Bitcoin exchanges have, in fact, registered as money-transmitters, which would obviate seizure based on the money-transmitter registration requirement. Whether the government attempts to attack Bitcoin with any other legal theories is an open question.
18 U.S.C. Section 1960 provides that “Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.” While state requirements are incorporated into the federal requirement, the minimum registration requirements are in 31 USC Section 5330. This requires registration of the name and location of the business, and each person who owns, controls, directs, or participates in the affairs of the business, the name and address of banks where they have accounts, an estimate of the volume of business, and other information.