Barely Legally

Confessions of a Moot Court Bailiff

Federal Agents Seize Mt. Gox's Bank Account

Bitcoin, that digital currency only several orders of magnitude less useful than Xbox Live Points, has been the subject of some really fun news pieces recently. There was the e-sports league surreptitiously running a mining operation with its users’ computers. There was the exchange which shut its doors and ran off with $260,000+ of its customers’ “money”. A speculative bubble around Bitcoin popped last month, collapsing nearly $200 in under a week. At least you know Bitcoin is always worth a funny story.

So the largest Bitcoin exchange (that thing which converts Bitcoins into money) is a Magic: The Gathering card trading site (yes, really) called Mt. Gox, which has trafficked in Bitcoin for the last few years. They just had (one of?) their bank account(s?) seized by Homeland Security. Ars has a good writeup of why this has happened, including detailed quotes from the key portion of the warrant.

tl;dr: Mt. Gox forgot to register as a currency exchange, which is a federal felony.

As part of the Money Laundering Suppression Act of 1994, all Money Transmitting Businesses must register with the Department of the Treasury. Neither Mt. Gox nor its US subsidiary Mutum Sigullum, LLC. are registered as such. Whoops. The Bitcoin subreddit is directing their displeasure toward Mt. Gox, whose navigation of regulatory matters is admittedly pretty displeasure-worthy. It’s okay, guys! An efficient market would never allow such egregious incompetence to handle two-thirds of all Bitcoin exchanges. (Yes, Virginia, etc.)

So wait, the coming crypto-currency wars? The stateless society? Post-capitalism anarcho-digital-libertarian utopia? All sidetracked because someone didn’t do their homework? What, don’t any lawyers take bitcoins? Hm.

How about Magic cards?