The Department of Homeland Security appears to have shut down the ability to use Dwolla, a mobile payment service, to withdraw and deposit money into Mt. Gox, a Bitcoin trading platform. A Dwolla representative confirmed the move to Betabeat.
A representative for Dwolla told Betabeat that the company is “not party” to this matter and encourages those with questions to reach out to Mt. Gox or the DHS.
“The Department of Homeland Security and U.S. District Court for the District of Maryland issued a ‘Seizure Warrant’ for the funds associated with Mutum Sigillium’s Dwolla account (a.k.a. Mt. Gox),” he said. “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 while Dwolla’s holding partner transferred Mutum Sigillium’s balance, per the warrant.”
Dwolla is a popular method of moving funds between USD and Bitcoin largely because they “claimed zero chance of chargebacks and appeared to be a small business run by decent people who weren’t necessarily Bitcoin-friendly but at least didn’t seem to be Bitcoin hostile.”
However it seems that Dwolla is going the way of PayPal and has now begun suspending accounts do to ‘suspicious activity’, especially the accounts of user who it suspects are acting as a virtual currency exchange, forbidden in it user agreement. And it seems this move may be due to regulatory pressure.
According to Fast Company, Iowa has begun accepting some tax payments via Dwolla. The cigarette stamp tax, which generates around $100 million for Iowa, will be the first tax that Iowans will be able to pay via Dwolla. However the Governor, Terry Brandstand, says he’d consider expanding Dwolla payments to other fees and taxes in the future as well.
In the last month the on-line payments company has added two new service, guest checkout and payment via twitter.
Last month Dwolla solved the “chicken and the egg” problem by introducing a guest check out option.
Dwolla’s Jordan Lampe explains “One of the big pain points [for Dwolla] was that to make a payment online, you had to have a Dwolla account, and you had to have money in that account,… So what we’re doing with this is saying, ‘let’s cut ourselves out of the equation.’”
Dwolla is an online and mobile payment system, similar to PayPal, however, Dwolla’s fee’s are much lower at $0.25 per transaction over $10, and transactions under $10 free of charge. Like PayPal, Dwolla is based on the US dollar. Un-like PayPal, you can use it to purchase bitcoins at exchanges such as Mt.Gox.
Dwolla has just announced their new mass payment system, appropriately titled MassPay.