Financial privacy free of government intrusion and interference is dead.
In what seems to be the government’s latest attack on private
transactions between individuals, the Department of Homeland Security
has shut down funds transfers operated by mobile processing platform
Dwolla, which is responsible for managing transfers for the BitCoin
digital currency exchange.
Details are still sparse, but a spokesperson for U.S. Immigration and Customs Enforcement (ICE) confirms that an investigation is in progress and Dwolla is no longer able to accept currency transfers for its customers.
The U.S. Department of Homeland Security confirmed it has
initiated legal action that prompted the Dwolla payment service to stop
processing bitcoin transactions.
Nicole Navas, a spokesperson for U.S. Immigration and Customs Enforcement, confirmed the legal action to CNET this afternoon.
Dwolla, a Des Moines, Iowa-based startup, which raised $16.5
million in funding two weeks ago, notified users about the move earlier
Tuesday. It blamed the decision on “recent court orders” limiting its
ability to send money through Mt. Gox, the largest bitcoin exchange.
“In order not to compromise this ongoing investigation being
conducted by ICE Homeland Security Investigations Baltimore, we cannot
comment beyond the information in the warrant, which was filed in the
District of Maryland earlier today,” Navas told CNET.
Dwolla has refused to elaborate, saying through its support
account on Twitter only that “we received a court order” and inquirers
should follow up with the affected parties.
…
Homeland Security declined to elaborate on the warrant or court proceedings.
The court order has yet to be made available for public scrutiny, but sources close to the Bitcoin Ecosystem have
suggested that this may be the first of many coming government
investigations into the cryptographic digital currency which makes it
possible for money transfers to be made without intrusion, verification
or a paper trail:
There are certainly more questions than answers at this stage. We
are prompted to wonder whether this is this the first of a series of
governmental assaults on the exchanges? That’s what they’d target if
they want to put the kibosh on bitcoin. Or, is this a case where DHS is
investigating some individual or organization who may have used
bitcoins, via Dwolla, for some potentially nefarious or terroristic
reasons?
Members of the PandoDaily team have spoken to sources close to
the bitcoin ecosystem and have been hearing that it’s likely the former.
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