Feds seized $2.9M in Bitcoin funds from Mt. Gox, court docs show

bitcoin

The federal government sent a strong signal to Bitcoin traders earlier this year when the U.S. Department of Homeland Security seized an account belonging to Mt. Gox, the most popular exchange for people to buy and sell the crypto-currency. It was unclear at the time just how much currency the government confiscated.

But a new filing in Baltimore federal court (embedded below) shows the feds seized $2,915,507.40 held in an account controlled by Dwolla, a third-party payment platform similar to PayPal. The funds belonged to Mutum Sigillum LLC, a U.S. subsidiary of Tokyo-based Mt. Gox.

It’s unclear what will become of the funds. Neither the US Attorney’s Office in Maryland nor Mt. Gox immediately returned a request for comment.

The feds decided to seize the account because Mt. Gox owner Mark Karpeles had allegedly concealed the fact that he opened the account in order to run a money transfer business. Karpeles has since stated that Mt. Gox is in compliance with federal and state financial regulations.

At the time, the seizure was significant because Dwolla-based payments to Mt. Gox were the easiest way that Americans could buy and sell large quantities of Bitcoin. While Mt. Gox has continued to process American transactions after the seizure, it has been slow to deliver withdrawals and has from time to time suspended them.

The company has blamed the slowdowns on technical measures and implemented new techniques to boost performance. But in recent months, its role as the dominant Bitcoin exchange has come to be challenged by newer competitors like Bitstamp.

Other startups like Coinbase, which is backed by prominent venture capitalist Fred Wilson, have also arrived on the scene, promising to make the crypto-currency experience more consumer friendly.

Even as people continue to debate whether Bitcoin is a fad or here to stay, entrepreneurs are offering new twists on the currency — including a fantastical machine that turns bills in Bitcoin.

The value of Bitcoins, which are also swapped informally in places like New York’s Satoshi Square, has stabilized in recent months at around $110.

Bitcoin Mt Gox Warrant Executed

[protected-iframe id=”7d5a93e49371c806e89cccc57c7c2bf8-14960843-34118173″ info=”http://www.scribd.com/embeds/161492071/content?start_page=1&view_mode=scroll&show_recommendations=true” width=”100%” height=”600″ frameborder=”0″ scrolling=”no”]

loading

Comments have been disabled for this post