Feds Seize Cash from Major Bitcoin Exchange’s Dwolla Account

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The U.S. Government has taken a significant action against the web’s top Bitcoin exchange by seizing funds from its mobile payment services account as part of a criminal investigation.

As Bitcoin develops into a currency to be reckoned with, increasing numbers of netizens are seriously considering this pseudo-anonymous payment option.

However, just as more and more torrent sites begin to utilize Bitcoin as a viable donation platform, a new and worrying move by U.S. authorities has come to light.

According to a report confirmed by Betanews, the Department of Homeland Security has targeted a Dwolla account operated by Mt. Gox, the largest Bitcoin exchange.

“MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox. We take this information seriously,” the exchange said in a statement.

“However, as of this time we have not been provided with a copy of the court order and/or warrant, and do not know its scope and/or the reasons for its issuance. MtGox is investigating and will provide further reports when additional information becomes known.”

A spokesman for Dwolla confirmed the existence of a court order and said a ‘Seizure Warrant’ had been issued for the funds held in the account.

“In light of the court order, procured by the Department of Homeland Security, Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum [MtGox] while Dwolla’s holding partner transferred Mutum Sigillium’s balance, per the warrant.”

The Dwolla platform was one of the key ways for users to purchase Bitcoins so the developments of the last 24 hours will be seen as a blow to the fledgling currency.

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