Homeland Security Shuts Down Largest Bitcoin Exchange

Image: Homeland Security Shuts Down Largest Bitcoin Exchange

Friday, 17 May 2013 12:39 PM

By Dan Weil

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The Department of Homeland Security (DHS) has made Dwolla, a mobile payments company, stop making payments to Mt. Gox, the largest and best known Bitcoin exchange.

The Bitcoin is a digital currency that doesn't involve a central authority or issuer. The currency surged higher last month before dropping back down.

The DHS and the U.S. District Court of Maryland have commandeered Mt. Gox's Dwolla account, the payments company said, therefore, it can't process any more payments for Mt. Gox.

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‘Financial War’ Could Wipe Out 50% of Your Wealth’

Dwolla, a start-up based in Des Moines, Iowa, raised $16.5 million in funding two weeks ago.

"In light of the court order, procured by the Department of Homeland Security, Dwolla has ceased all account activities associated with for Mutum Sigillum [Mt. Gox]," Dwolla said, according to Softpedia.

According to the seizure warrant, Mt. Gox "is engaged in a money transmitting business but is not registered as required with FinCEN [the Treasury's Financial Crimes Enforcement Network]," and the contents of the account were seized and are subject to forfeiture.

"Whatever the case, it can't be good for Bitcoin," writes Softpedia's Lucian Parfeni. "Mt. Gox only accepts a few ways of paying for Bitcoins, and it doesn't work with any major bank."

Washington Post blogger Timothy Lee says it's no great surprise that the government is going after Bitcoin.

"The lack of intermediaries makes Bitcoin an attractive technology for those who want to evade government scrutiny," he writes. "It was only a matter of time before authorities started to give the technology some unwelcome attention."

Declassified: ‘Financial War’ Could Wipe Out 50% of Your Wealth’

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