

Feds seize money from top Bitcoin Exchange Mt. Gox - JeremyKolb
http://arstechnica.com/tech-policy/2013/05/feds-seize-money-from-top-bitcoin-exchange-mt-gox/

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il
This was inevitable. People can wax rhapsodic about the decentralized nature
of Bitcoin, but once the feds freeze a few million dollars of a major
exchange's assets, as they have done with every single anonymous digital
currency since the beginning of time (e-gold,1mdc,Liberty Dollar) and launch a
criminal investigation, the currency will be severely destabilized.

Within the next year I expect to see a cottage industry emerge where the true
believers cash out frozen bitcoin accounts for pennies on the dollar.

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300bps
Well the important thing to keep in mind is that there are several ways to
fund or de-fund a Mt Gox account. One method entails going to a local kiosk
and submitting cash.

Sure, the feds can shut down all of them eventually but how many innocent
people are they taking out with this Sledgehammer-Shotgun approach? This is
reminiscent of their heavy-handed takedown of Megaupload which caused
legitimate individuals and business to lose access to their legitimate date.

~~~
il
How would the funding method make a difference? Any money you send, cash or
otherwise, is going to end up the in the same Mt Gox account frozen by the
feds, with no way to get the money out. Again, see e-gold.

~~~
dmazin
Dwolla isn't a bank, it's a payments processor.

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JeremyKolb
This article was posted last night and I don't see any significant price
change on Bitcoins from it. This might be the first instance of government
getting really interested in digital currency, it will be interesting to see
how traders react.

~~~
il
The exact same thing happened with e-gold a decade ago. Expect an unsealed
indictment with federal conspiracy and RICO charges to follow shortly.

