DHS shuts down Mt Gox's Dwolla account, issues "seizure warrant"

[osan]

Wow... this is not trivial.

 

[amonasro]

They don't have to crack anything. Just correlate open datasets. Its an accounting forensics problem not a cryptographic one.

I'd also like to know how they plan to do this, given that transactions are often split into multiple receiving addresses, many of which are created for that single transaction. They might be able to correlate a few transactions to identities, but the trail would run dry pretty quickly. Those that use Dwolla account for a small percentage of US users, giving them only a tiny piece of the puzzle. Even so, none of my personal addresses were ever associated with my Dwolla account.

This freeze of Gox's US Dwolla account more likely has to do with internet gambling, or busting some online criminal. I don't like putting on the conspiracy hat without more evidence.

Personally, I made a Dwolla deposit to Gox hours before that email went out, and just about had a coronary. They ended up funding my account anyway to my great relief.

 

[kpitcher]

Forensic accounting is only good if you have a good chunk of the info. The blockchain is only part of the story. As bitcoin is worldwide and is not centralized, unless every coin is purchased with a bank draft or is used with a physical shipping address that is in a database it's not going to reveal much.

If anyone is paranoid enough there are many bitcoin laundries. The most common is to send it to any exchange that uses common pools and then withdraw to a different address. This breaks the chain. Blockchain.info even has a taint detection between addresses. That's the most common but there are many other ways. True it's not by default but if someone wants to have even more anonymous coins it is doable. Realistically I could bounce coins through a variety of laundries around the world from an existing address to a brand new, never before used or associated, address without any real hassle.

 

[idiom]

People who use bitcoins want to be anonymous...

The entire idea behind bitcoin is that it is a way to transfer money untraceable.
Bitcoins are used for tax evasion, money laundering, funding terrorism, or drug trafficking.
Which is why a bunch of us think it is going to be shut down by the feds, and why we won't touch it with a 10 foot pole..

People who want to be anonymous use cash.

Bitcoins could be a really handy digital currency, on the basis that they are not anonymous.

Truly anonymous digital currency would be worthless. How do you prove its not counterfeit or the only copy?

 

[jj-]

I was expecting this news to lower the price of bitcoins. But it's been a few days, and now it's higher!

 

[kpitcher]

I was expecting this news to lower the price of bitcoins. But it's been a few days, and now it's higher!

I'm surprised also. I saw it in lots of press and made it on NPR's marketwatch on Friday (A show worth listening to just for the huge balls on the reporter for grilling Rumsfeld about his new book. It was spectacular)

 

[Crystallas]

I was expecting this news to lower the price of bitcoins. But it's been a few days, and now it's higher!

The media tried to spin, spin, spin(well, any bitcoin hater did), and it didn't stick. Bitcoin users, for the most part, are well informed and saw right through it.

Plus, a lot of people lost a bit of credibility by claiming DHS went after MtGox, when in fact, it was just a middle-man in Iowa that had a transfer service that used Dwolla's services as the registered bank.

 

[amy31416]

Thanks to the mod who fixed the title!