For the past few years, Bitcoin exchange Mt. Gox has billed itself as the largest, safest repository for Bitcoin buying and selling. The site has weathered a number of DDoS attacks and survived the launch (and failure) of multiple rival exchanges. Last night, for the first time, it ran afoul of the United States government.
Yesterday, Mt. Gox’s major payment processor, Dwolla, notified customers that it could no longer transfer funds between Mt. Gox’s account (Mutum Sigilum) and Dwolla users’ accounts. Dwolla functions much like Paypal — you transfer funds from a BTC transaction to a Dwolla account and, if you’ve verified a bank account with Dwolla, you can then transfer the funds to and from your bank.
The warrant that DHS used to seize the funds in Mt. Gox’s Dwolla account has just been published, and it points to a significant problem with the service. As Ars Technica details, when Mt. Gox owner Mark Karpeles opened the Mutum Sigilum account with Wells Fargo, he was asked if Mutum Sigilum LLC was a business engaged in monetary services. From the warrant: