The Department of Homeland Security has apparently shut down a key mobile payments account associated with Mt. Gox, the largest Bitcoin exchange.
Chris Coyne, co-founder of online dating service OKCupid, tweeted out an e-mail he received from Dwolla this afternoon. The e-mail states that neither Coyne, nor presumably any other Dwolla user, will be able to transfer funds to Mt. Gox.
Dwolla confirmed the change to the New York Observer, which first reported the story. Dwolla received a seizure warrant from a federal court.
"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."
It isn't yet clear why this seizure happened, and Dwolla isn't saying anything beyond confirming the court order. Mt. Gox didn't immediately respond to an inquiry from Ars about the seizure. A user on Bitcoin StackExchange published this short reply received from an inquiry to Mt. Gox about the shut-down: "Thank you for the e-mail. We can see that the Dwolla transactions are not getting processed right now. We will contact Dwolla and post an announcement regarding this. Your patience is appreciated till then."
A DHS spokeswoman declined to comment on the case, "in order not to compromise this ongoing investigation being conducted by ICE Homeland Security Investigations (HSI) Baltimore."
Using a payment service like Dwolla is one of the easiest ways for US residents to buy Bitcoins. More popular payments services can't be used to buy on the Mt. Gox exchange—PayPal, for instance, can't be used to perform currency exchanges. Mt. Gox is the largest Bitcoin exchange, handling about 63 percent of all Bitcoin purchases.
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