Quote from: repentance on May 16, 2013, 11:23:38 AM

Quote from: TheFootMan on May 15, 2013, 06:54:17 PM

A more fair way to go about things, which should be done by sensible humans would be to say: Hey, you've got a business running, are you aware of the new requirements for licensing ? You have 6 months to comply with the licensing requirements and get a license, or you will have to close up shop.

Actually you do have 6 months from when you start operating as a money transmitter to register as such with FinCEN. The particular piece of legislation they're alleged to not have complied with doesn't just pertain to FinCEN registration, though, it also applies to the requirement to register as a MSB in individual states - which means that further investigation could find more violations.

It's going to be hard for Mark to argue he had no idea that MtGox was acting as a money transmitter when there are posts on here made by Mark last year talking about MtGox's intention to register as such in the US and how it would be a state by state process as the exact requirements varied from one state to another.

When Dwolla sends funds from a customer account to MtGox at the customer's request, it's without question acting as a money transmitter. It's absurd to then claim that MtGox is not transmitting money when it transfers customer funds to the customer's Dwolla account at the customer's request.

It will be interesting to see whether MtGox is now exposed to other financial services regulations violations. If it was operating as a money transmitter within the US, then what obligations did it have to file reports on suspicious transactions, threshold transactions, etc with FinCEN?

PayPal tried to argue for years that they weren't a money service business and they lost despite having the enormous financial resources of eBay at their disposal.

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Are all banks registered as money transmitters? It seems to me that a money transmitter should be transmitting money between _different_ people.

MtGox does this. It transmits the BTC buyer's money to the seller (as PayPal does) - MtGox itself is not a party to the transaction.

It's worth remembering that there could actually be more user funds in the seized Wells Fargo account than in the seized Dwolla account. MtGox has tended to limit the amount being transferred to Dwolla at any one time just in case Dwolla itself froze their account or reversed transactions. Presumably, the funds which were "queued" awaiting transfer to Dwolla are in the seized Wells Fargo account.

It's a pity the media's probably not going to be able to snoop and find out the amounts which have been seized.

Really well said and thanks for the information.

This is going to be a potential thorn in the side of MtGox, but it should not be the end. But hopefully what it does is get their customers going to other exchanges (to aid in decentralizing our decentralized technology!) and cause other entrepreneurs to open up more exchanges.

What we shouldn't lose sight of here is that if we play by the rules (aka regulations) we should be fine. If they wanted to attack BTC openly, that ship has mostly sailed. I liken this to other areas where the government tried to overly enforce regulations (post internet) and was just unable to keep up with the expansion of the field in question. I'm not saying they won't be able to regulate, as I think they will. But in a sense, what has just happened is like the DDOS attacks - they only made us stronger. Other exchanges now have to get everything in order. We are truly growing quickly and will experience growing pains, all the while becoming stronger.

Remember, we are a Black Swan and anti-fragile technology (per my sig). This doesn't mean we will succeed, but we have Universe on our side.