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cashinmattress

Bitcoin In Trouble With Dhs

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The U.S. Department of Homeland Security confirmed it has initiated legal action that prompted the Dwolla payment service to stop processing bitcoin transactions.

Nicole Navas, a spokesperson for U.S. Immigration and Customs Enforcement, confirmed the legal action to CNET this afternoon.

Dwolla, a Des Moines, Iowa-based startup, which raised $16.5 million in funding two weeks ago, notified users about the move earlier Tuesday. It blamed the decision on "recent court orders" limiting its ability to send money through Mt. Gox, the largest bitcoin exchange.

"In order not to compromise this ongoing investigation being conducted by ICE Homeland Security Investigations Baltimore, we cannot comment beyond the information in the warrant, which was filed in the District of Maryland earlier today," Navas told CNET.

Mt. Gox did not respond to questions from CNET. It did, however, post a statement to its Google+ account saying:

MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox. We take this information seriously. However, as of this time we have not been provided with a copy of the court order and/or warrant, and do not know its scope and/or the reasons for its issuance. MtGox is investigating and will provide further reports when additional information becomes known.

Chris Coyne, co-founder of OkCupid, posted a screen snapshot of email he said he received from Dwolla this afternoon. It says: "Dwolla will be unable to complete your recent bank transfer [to Mt. Gox] and any future transactions."

Dwolla is not elaborating. Jordan Lampe, a company spokesman, told CNET that "Dwolla advanced the news of the seizure to Mt. Gox in under an hour of its execution. At their request, Dwolla followed up the initial communication to Mt. Gox with a copy of the warrant." Lampe said questions should be directed to Homeland Security or Mt. Gox, and refused to release a copy of the warrant.

Even though ICE's name refers to immigration and customs, the agency's actual mandate is far broader.

ICE's Homeland Security Investigations unit boasts 7,000 special agents in 200 U.S. cities that focus on crimes including drug smuggling, financial crimes, computer crimes, and export enforcement. That has included seizing Internet domain names, targeting sports streaming sites, and arresting a student for jailbreaking game consoles.

Homeland Security declined to elaborate on the warrant or court proceedings.

Obviously this e-currency has brought about the attention of the bankers.

Probably going down the road of making all current 'legal' BTC transactions illegal soon enough.

Bitcoin millionaires to zeros.

Fad.

Edited by cashinmattress

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Governments are absolutely crazy. It seems they will not even allow people to seek an alternative when central banks are engaged in the biggest counterfitting operation in modern history.

Is the mafia boss who smashes your knees because you don't pay his protection money crazy?

Or just protecting his interests?

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This kind of government meddling is exactly why Bitcoin was created.

It will be interesting to see if a ban from the US gov would encourage other countries to embrace Bitcoin just to piss them off.

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This kind of government meddling is exactly why Bitcoin was created.

It will be interesting to see if a ban from the US gov would encourage other countries to embrace Bitcoin just to piss them off.

Well, I only hypothesised about the US gov't banning it, but it's not such a far fetched idea.

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Governments are absolutely crazy. It seems they will not even allow people to seek an alternative when central banks are engaged in the biggest counterfitting operation in modern history.

This is about one firm AFAICS.....not bitcoins in general.....

I dont see how a trader in BTCS can be any more illegal than one dealing in coins...there has to be something else.

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Perhaps because BTC does not require the major exchanges? Or that applying tax requires the end users cypher?

prolly something to do with banking...the clients all pay in currency or they are being paid in currency, meanwhile a BTC changes hands.

could be ringfencing of funds, how the firm collects profits ( BTC or currency) or even.....nothing at all...It seems many US institutions hand out writs with no basis in law at all...according to some sources.

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Is the mafia boss who smashes your knees because you don't pay his protection money crazy?

Or just protecting his interests?

Definitely crazy, it requires just as much work (perhaps even more) to force people to do things for you, than it is to do things people want and for them to voluntarily pay you in return.

Worse still, the government protection racket is so large, and affects so many people, that paying the government protection money is slowly impoverishing everybody, including those running it.

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Definitely crazy, it requires just as much work (perhaps even more) to force people to do things for you, than it is to do things people want and for them to voluntarily pay you in return.

Worse still, the government protection racket is so large, and affects so many people, that paying the government protection money is slowly impoverishing everybody, including those running it.

My point is they know exactly what they are doing. Sure cameron and the other low level goons are out of their depth, but we know they are just figurehead puppets.

You dont set up a global control system that used military, economic and social means to create total domination without knowing exactly what you are doing.

If they want bitcoin gone, it will be gone. It may take time, but these people think on time scales of decades, not weeks.

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This kind of government meddling is exactly why Bitcoin was created.

It will be interesting to see if a ban from the US gov would encourage other countries to embrace Bitcoin just to piss them off.

One of the points about Bitcoin is that it is the opposite of a centrally controlled currnecy, outside the of control of banks or government agencies, and thus an anathema to all governments. It also makes taxation essentially impossible, as it it outside any particular jurisdiction, and is secret and secure.

The weak point is where Bitcoins are translated into ordinary currencies, and vice-versa. This is why the exchanges are being targeted by the Governments, though they might have found some genuine legal technicality upon which to take action. But the very threat of action against exchanges, based on genuine legal reasons or not, is designed and intended to destroy confidence in them, and thus indirectly, Bitcoin.

If a Bitcoin economy grows to the point where people generally accept transactions kept within the Bitcoin realm, without needing to convert to any other currency, then Bitcoin will not be vulnerable. That depends upon Bitcoin getting critical mass and acceptance. Furthermore, unless all methods of exchange are removed globally, it will still be possible, albeit difficult, to exchange between Bitcoin and other currencies.

To cripple Bitcoin there would have to be a Global concerted action agains all major exchanges across all major national jurisdictions, before Bitcoin reaches critical mass as a currency in it's own right and makes the exchanges broadly irrelevant anyway. Bitcoin may already have that critical mass; it's a moot point.

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One of the points about Bitcoin is that it is the opposite of a centrally controlled currnecy, outside the of control of banks or government agencies, and thus an anathema to all governments. It also makes taxation essentially impossible, as it it outside any particular jurisdiction, and is secret and secure.

The weak point is where Bitcoins are translated into ordinary currencies, and vice-versa. This is why the exchanges are being targeted by the Governments, though they might have found some genuine legal technicality upon which to take action. But the very threat of action against exchanges, based on genuine legal reasons or not, is designed and intended to destroy confidence in them, and thus indirectly, Bitcoin.

If a Bitcoin economy grows to the point where people generally accept transactions kept within the Bitcoin realm, without needing to convert to any other currency, then Bitcoin will not be vulnerable. That depends upon Bitcoin getting critical mass and acceptance. Furthermore, unless all methods of exchange are removed globally, it will still be possible, albeit difficult, to exchange between Bitcoin and other currencies.

To cripple Bitcoin there would have to be a Global concerted action agains all major exchanges across all major national jurisdictions, before Bitcoin reaches critical mass as a currency in it's own right and makes the exchanges broadly irrelevant anyway. Bitcoin may already have that critical mass; it's a moot point.

miners would most likely need to exchange for cash....to pay their leccy and hardware bills....and even if they could pay those suppliers in BTC, those suppliers themselves would need to cash in too.

as you say, hitting the exchanges with frivolous claims will make mining a waste of time due to legal fees.

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The problem with BitCoins is they circumvent (or rather simply ignore) the anti-money laundering laws most countries have.

The whole idea of BitCoins is for them to be untraceable and secure... it's like someone invented a currency explicitly for criminals.

I'm not saying the concept is wrong, it's just it is obviously open to MASSIVE abuse.

I expect all governments will looks to track down on the purchasing of BitCoins for this reason... otherwise if a year or so I expect every major drug deal to involve payment in BitCoins. Currently the only thing stopping it is the volatility of the prices, but once the system has been running for a while and has stabilised, that problem should go away.

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The problem with BitCoins is they circumvent (or rather simply ignore) the anti-money laundering laws most countries have.

The whole idea of BitCoins is for them to be untraceable and secure... it's like someone invented a currency explicitly for criminals.

I'm not saying the concept is wrong, it's just it is obviously open to MASSIVE abuse.

I expect all governments will looks to track down on the purchasing of BitCoins for this reason... otherwise if a year or so I expect every major drug deal to involve payment in BitCoins. Currently the only thing stopping it is the volatility of the prices, but once the system has been running for a while and has stabilised, that problem should go away.

I suspect this is wrong.

two reasons....drug dealers want to spend their gains on birds and black windowed BMWs. this required clean money.

Second, BANKS are the first line of defence in moneylaundering....BTC exchanges want debit cards, credit cards or bank transfers.

So, if the money has been laundered, it is before it even hits the BTC exchanges.

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I suspect this is wrong.

two reasons....drug dealers want to spend their gains on birds and black windowed BMWs. this required clean money.

Second, BANKS are the first line of defence in moneylaundering....BTC exchanges want debit cards, credit cards or bank transfers.

So, if the money has been laundered, it is before it even hits the BTC exchanges.

That may be now.

But what happens when you can buy drugs with bitcoins, and the dealers can buy their BMW's with them too? The same logic applies to arms deals or nuclear weapons material/components.

All completely untraceable and anonymous.

At that point all control is lost over such things.

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That may be now.

But what happens when you can buy drugs with bitcoins, and the dealers can buy their BMW's with them too? The same logic applies to arms deals or nuclear weapons material/components.

All completely untraceable and anonymous.

At that point all control is lost over such things.

the point is, this aint ever going to happen if the authorities hamper the exchanges from now on, using the pretence that money laundering is being prevented...if indeed this is what all this kerfuffle is all about.

The BMW dealers need cash to pay their taxes too.

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The problem with BitCoins is they circumvent (or rather simply ignore) the anti-money laundering laws most countries have.

The whole idea of BitCoins is for them to be untraceable and secure... it's like someone invented a currency explicitly for criminals.

I'm not saying the concept is wrong, it's just it is obviously open to MASSIVE abuse.

I expect all governments will looks to track down on the purchasing of BitCoins for this reason... otherwise if a year or so I expect every major drug deal to involve payment in BitCoins. Currently the only thing stopping it is the volatility of the prices, but once the system has been running for a while and has stabilised, that problem should go away.

Actually you're a little of the mark, but you are right that Bitcoin is currently rather handy for money laundering.

Bitcoin circumvents AML only in the same way that cash does. You don't need a third party, like a bank, to do a transfer. One big advantage is you can transfer that cash anywhere in the world, almost instantly, and it can still be used.

However, if you want to convert Bitcoin to cash, then someone has to do this for you. If not an agency, then an individual. At the individual level, that person is committing a crime as it's classic money laundering. This is not special to Bitcoin. At some level that person can be traced too.

It's at the agency level, such as exchanges, that we're seeing governments step in. It has been too easy to launder money through exchanges, including private ones, and (quite rightly) this isn't going to be allowed to continue. Those agencies should have to comply with the law just as Western Union et al do. The newer exchanges are, it's Mt Gox that aren't.

It's a compete myth that Bitcoin is untraceable. In fact, it's the most traceable currency in existence - the very opposite of what criminals would want. Although there are ways to try and wash your money with other transactions, essentially it's all traceable. Every single Satoshi of it. What there isn't is a way to identify an individual except by tracing transactions. Hence why exchanges need to comply with AML as they are the easy route out.

The truth is, as we saw with HSBC, none of this stops money laundering. What it does do is make it a little more difficult and individuals a little easier to track down, at least if they're not well organised.

Plenty of dodgy deals and laundering already do involve bitcoins. It certainly isn't volatility that has held it back!

With regard to Mt Gox, this looks like a serious botch on their part. Once Fincen issued their guidance, it's inconceivable that Mt Gox didn't realise they needed to sort this out. The question is whether Fincen jumped the gun or not. Pointing to the 2011 bank account sign up and saying they didn't state there were a money exchange/transmitter is rubbish. Bitcoin certainly wasn't considered a currency at that time. However, once Fincen took an interest (March) then Mt Gox should have been in discussions with them.

They may have chosen not to do this because it may have meant shutting US operations for a while, something they may have considered too costly. In which case, that's been a very costly decision. Additionally, Coinlab were supposed to take over their US operations specifically to deal with this issue, and that's resulted in a big legal spat.

We'll only know the real story in a few months. For now, however, this means that Bitcoin is considered a currency and that exchanges operating with US accounts will be regulated. Not the currency, just the companies. That's a good thing IMHO, at the moment anyway.

The markets are all screwed today - Mt Gox barely up and all markets operating on tiny volumes. Expect some major spikes and dips. Mt Gox will probably go up as people buy BTC to get out, while other markets may follow suit due to arbitrage. Then there could be a big sell as people try to get back into USD, and a drop. LTC has taken a big hit as Mt Gox was the big LTC hope (this is personally very annoying, but I've walked out with an LTC->BTC profit for the time being).

Who knows!

Edited by miggy

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Governments are absolutely crazy. It seems they will not even allow people to seek an alternative when central banks are engaged in the biggest counterfitting operation in modern history.

Yeah, but they're the guys with the most guns and nukes.

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The problem with BitCoins is they circumvent (or rather simply ignore) the anti-money laundering laws most countries have.

The whole idea of BitCoins is for them to be untraceable and secure... it's like someone invented a currency explicitly for criminals.

I'm not saying the concept is wrong, it's just it is obviously open to MASSIVE abuse.

I expect all governments will looks to track down on the purchasing of BitCoins for this reason... otherwise if a year or so I expect every major drug deal to involve payment in BitCoins. Currently the only thing stopping it is the volatility of the prices, but once the system has been running for a while and has stabilised, that problem should go away.

Criminals use fiat money too. Bitcoin has some features that sometimes make it more useful to criminals than fiat money; but then, Bitcoin has features that make it more useful to non-criminals too.

Justifying banning of Bitcoin 'because it is used by criminals' would not hold water legally or logically.

Also, no law is necessarily being broken by creating Bitcoins, and no-one ultimately controls Bitcoins.

So, the nice thing about Bitcoins is that they are not created, nor controlled, by criminals. Unlike fiat money.

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Good video about this here:

Some other points:

- You don't need to exchange to other currencies, unless other trading partners (including involuntary ones like the state) demand some/all of a payment in national currency.

- The more popular Bitcoin gets, the more it will harm countries to make it hard/illegal to use. Imagine banning the Internet, to save the high street shops - it would cripple the UK economy relative to others.

- There are many ways to trade Bitcoins, including direct transfers (via escrow/wire and/or by hand). While Bitcoins have value, this will always be a useful option.

- The USA isn't the world. China's state TV has already run a positive documentary (see videos in below post) and I would imagine many other countries would like to avoid using USD for transactions. Using gold is one option, but moving it about is expensive and time consuming.

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the point is, this aint ever going to happen if the authorities hamper the exchanges from now on, using the pretence that money laundering is being prevented...if indeed this is what all this kerfuffle is all about.

The BMW dealers need cash to pay their taxes too.

'Private' sellers don't though.

It does seem to be about laundering rules, but from what I have heard, it is overreach by the state (unsurprisingly). It has been suggested that it is a retrospective law, that MtGox haven't even broken. I'm know legal expert though.

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Actually you're a little of the mark, but you are right that Bitcoin is currently rather handy for money laundering.

Bitcoin circumvents AML only in the same way that cash does. You don't need a third party, like a bank, to do a transfer. One big advantage is you can transfer that cash anywhere in the world, almost instantly, and it can still be used.

However, if you want to convert Bitcoin to cash, then someone has to do this for you. If not an agency, then an individual. At the individual level, that person is committing a crime as it's classic money laundering. This is not special to Bitcoin. At some level that person can be traced too.

It's at the agency level, such as exchanges, that we're seeing governments step in. It has been too easy to launder money through exchanges, including private ones, and (quite rightly) this isn't going to be allowed to continue. Those agencies should have to comply with the law just as Western Union et al do. The newer exchanges are, it's Mt Gox that aren't.

It's a compete myth that Bitcoin is untraceable. In fact, it's the most traceable currency in existence - the very opposite of what criminals would want. Although there are ways to try and wash your money with other transactions, essentially it's all traceable. Every single Satoshi of it. What there isn't is a way to identify an individual except by tracing transactions. Hence why exchanges need to comply with AML as they are the easy route out.

The truth is, as we saw with HSBC, none of this stops money laundering. What it does do is make it a little more difficult and individuals a little easier to track down, at least if they're not well organised.

Plenty of dodgy deals and laundering already do involve bitcoins. It certainly isn't volatility that has held it back!

With regard to Mt Gox, this looks like a serious botch on their part. Once Fincen issued their guidance, it's inconceivable that Mt Gox didn't realise they needed to sort this out. The question is whether Fincen jumped the gun or not. Pointing to the 2011 bank account sign up and saying they didn't state there were a money exchange/transmitter is rubbish. Bitcoin certainly wasn't considered a currency at that time. However, once Fincen took an interest (March) then Mt Gox should have been in discussions with them.

They may have chosen not to do this because it may have meant shutting US operations for a while, something they may have considered too costly. In which case, that's been a very costly decision. Additionally, Coinlab were supposed to take over their US operations specifically to deal with this issue, and that's resulted in a big legal spat.

We'll only know the real story in a few months. For now, however, this means that Bitcoin is considered a currency and that exchanges operating with US accounts will be regulated. Not the currency, just the companies. That's a good thing IMHO, at the moment anyway.

The markets are all screwed today - Mt Gox barely up and all markets operating on tiny volumes. Expect some major spikes and dips. Mt Gox will probably go up as people buy BTC to get out, while other markets may follow suit due to arbitrage. Then there could be a big sell as people try to get back into USD, and a drop. LTC has taken a big hit as Mt Gox was the big LTC hope (this is personally very annoying, but I've walked out with an LTC->BTC profit for the time being).

Who knows!

This is only a half truth. Sure, if you do nothing to cover your tracks, Bitcoin is traceable. However, if you 'wash' your Bitcoins, then it is very hard to trace them - 100s/1000s of other accounts will have had transactions from them, all/many of which will be hard to map back to an individual. Even if these other accounts were traced back to individuals, what is their crime? Attempting to remain anonymous? It seems that anonymity is a crime these days.

Ofc, the state is so interesting in so-called money laundering, because of tax evasion. Attempting to prevent the state from stealing your stuff is a crime in their eyes. It 'costs' them directly, if they don't get their 'protection' money.

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  • 239 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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