Quote from: Bitco on May 26, 2013, 10:25:04 AM

Quote from: MSantori on May 25, 2013, 03:22:52 PM

The US authorities seized the funds in Mutum Sigilum's Dwolla account because Mutum Sigilum was operating an unregistered money transmitter business. The registration requirements seek to prevent money laundering, but there was no evdience (at least that I'm aware of) that Mutum Sigilum was actually laundering money.

Mutum Sigilum was allegedly operating an unregistered money transmitting business, but there isn't much evidence of that either. The informant in the case only sent money back to himself. And even if Mutum Sigillum was operating a money transmitting business, it isn't clear that they are subject to the reporting requirements of section 5313 (which triggers the registration requirement) because such reports would be filed by Veridian and Wells Fargo.

The legal issues in this case are a lot more complex than you imply. If Mutum Sigillum was operating an unlicensed money transmitting business, then arguably Dwolla is too, since Dwolla is having Veridian transmit money for Dwolla's customers. You might also want to read:

http://k.lenz.name/LB/?p=9369

You are right to say that the legal issues here are complex.

That said, I've read your point made before, and, respectfully, it ignores the legal standard for federal agency action. The DOT and FinCEN are empowered to interpret and apply the laws enacted by the legislature. The federal courts grant them tremendous deference in that respect. An individual seeking to challenge that interpretation or application may do so, but when it comes down to courtroom brass-tacks, that person doesn't get to rely upon their hypertechnical, ivory-tower legal analysis of the meaning of the statute. To successfully challenge an agency decision, for example, the challenger must demonstrate not that the regulation is "wrong", or that it does not technically fit into the powers granted to the agency; such a standard would be easy to meet in many cases. No, the challenger must demonstrate that the agency decision was "arbitrary or capricious," or in some cases, the agency determination will be upheld if it is "rational and credible". The standards here are a fuzzy and often overlapping, but they almost always favor the agency.

Thus, the DOT's interpretation of BSA are going to be granted quite a bit of deference. This won't ultimately matter when it comes to Mutum Sigilum's defense, but it is what matters in the long haul, when the DOT finally gets around to promulgating BTC regulations.

So, were the federal agencies acting "correctly" in taking down Mutum Sigilum? I'm not sure that it matters. Will the charges stick? Well, it isn't even clear what the charges will be just yet. I am sure of one thing, though: it's going to be fun to read the briefs!

Edit: ninja'd!