The problem here is that Mt. Gox is operating as an unlicensed money transmitter.
With their recent guidance, FinCEN decided that virtual currency exchangers are money transmitters.
“An administrator or exchanger that (1)accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN’s regulations.”
Mt. Gox is not a US company; however, it does a lot of business in the States and is not registered with FinCEN.
An informant working with a Homeland Security agent signed up for both Mt. Gox and Dwolla accounts. After making a few transactions, he was able to determine that his funds had gone through a Wells Fargo bank account owned by Mt. Gox and opened by the exchanges’ CEO Mark Karpeles. The account was opened by Mark in May 2011 who at the time signed a Wells Fargo form declaring that his business was not a Money Services business or a Money Transmitter. Of course this was almost 2 years prior to FinCEN’s guidance on the issue.
The Warrant states that Mt. Gox is in violation of 18 U.S.C. section 1960. The punishment for this can include fines and up to 5 years in prison.
Ars Technica obtained a copy of the warrant which can be read here.
