After US Homeland Security announced to seize funds of Mt. Gox account, the world’s leading Bitcoin exchange, the value of bitcoin dropped more than 10 percent overnight. However, the prices retained its position to its early week level instantly.
On Tuesday, the Federal government issued a court order against Bitcoin related activities when it stopped the money transfers between Mt. Gox and Dwolla, a service that assists people in buying and selling Bitcoins at Mt. Gox.
The court affidavit revealed a federal agent stating that Mt. Gox owner Mark Karpeles deliberately lied when opening a bank account in 2011. He particularly bolded on quotes that mentioned Mark answering “no”, on being asked if he would be involved in a currency business and money transfers.
As per the 18 USC § 1960 Prohibition of Unlicensed Money Transmitting Business law, Mark Karpeles failed to comply with the money transmitting business registration requirements under section 5330 of title 31, United States Code, or regulations prescribed under such section. Breaking the law hence resulted into Feds perform a necessary seize of Mt. Gox account and keep it.
Yet this is more of a bad news to Mt. Gox and Mark Karpeles, rather than Bitcoins itself. But it is sure that the loss of Mt. Gox will surely affect Dwolla’s payment mechanism, and is hope to further poise the recent Bitcoins investment deals.
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