U.S. Seizes Bitcoin Exchange Accounts

[dlevere]

U.S. seizes operator accounts of major Japanese Bitcoin exchange

By Agence France-Presse
Friday, May 17, 2013 15:40 EDT

US authorities seized the accounts of a Bitcoin digital currency exchange operator, claiming it was functioning as an “unlicensed money service business,” court documents showed Friday.

A warrant revealed by the Department of Homeland Security showed a judge signed the seizure order Tuesday for the accounts of Mutum Sigillum LCC, a subsidiary of Japan-based Mt. Gox, the world’s biggest Bitcoin exchange.

The warrant said the account based on the electronic payments platform Dwolla and held at Veridian Credit Union “was used to move money” as “part of an unlicensed money service” in violation of US law.

The US law enforcement action creates doubts about the future of Bitcoin, a mysterious digital currency which saw a flurry of interest this year which some called a bubble.

Bitcoins were launched in 2009 in the wake of the global financial crisis by an anonymous programmer who wanted to create a currency independent of any central bank or financial institution.

A form of “e-money,” Bitcoin is made of strings of dazzlingly complex code, written in such a way that it becomes increasingly difficult to generate new Bitcoins, with the number in circulation designed to eventually top out at 21 million.

Originally worth less than a cent, the value peaked during the Cyprus financial crisis at $266. On Friday the price listed on the Blockchain website was $118.

A Homeland Security official said that the agency could not comment on the matter “in order not to compromise this ongoing investigation.”

Some officials fear the virtual currency can be used by criminals or terrorists, or could be vulnerable to hackers.

[bungholio]

On the paranoid side: http://www.naturalnews.com/039865_bi...ike_Adams.html

[Pyriel]

Bitcoins were launched in 2009 in the wake of the global financial crisis by an anonymous programmer who wanted to create a currency independent of any central bank or financial institution.

It's been a while since I looked through the original white-paper, but I'm pretty sure the guy who created it saw it filling a niche for micro-transactions without extortionate fees. Send your friend 3,000 miles a way $5, and it costs you $5 and a penny, or a fraction of a penny. People picking up his proof-of-concept, and seeing at as an opportunity to get rich, and create a non-governmental form of currency is likely a big part of why he up and disappeared.

[dlevere]

That's a good point, Pyriel. I didn't know that he had disappeared, though.

[Pyriel]

He released everything under a pseudonym, and apparently abandoned the community within about a year of releasing his proof-of-concept client. I don't think anybody actually knows the reasons why he left, but it was around the time that exchanges were being set up, and the ridiculous arms-race began amongst the "miners". It at least seems reasonable to guess that things were trending away from his vision more than he cared to tolerate.

That guy on Natural News didn't predict much. Anyone watching it was just waiting for the bubble to burst, with the exception of the true-believers who thought their Bitcoins would be worth a million apiece by next year, and they could start lighting cigars with museum quality Picasso's. The only questions were when, how high it would climb, and how far it would crash. But it's an almost completely irrational market, so it's nigh impossible to do more than throw darts at a calendar and a list of numbers. I mean, it got to $266 mainly on the strength of believers and speculators buying into the notion that the controversy in Cyprus and other parts of the EU would cause Europeans to shift their savings into Bitcoin. There were articles written by shill accounts at Forbes that attributed the rise to those things in oblique ways, without pointing out that it wasn't actually happening. The Bitcoiners (sort of) wrote songs about it, for fuck's sake.