In May, Dwolla, the Des Moines, Iowa, payments innovator, was hit with a court order that said there was probable cause to believe Bitcoin virtual currency exchange and Dwolla client Mt.Gox was operating as an unlicensed money transmitting business.
Now tech publication Gigaom has dug up the paperwork showing that the Department of Homeland Security around that time also seized a $2.9 million Dwolla account held by Mt.Gox subsidiary Mutum Sigillum.
That account was maintained at Veridian Credit Union, a $2.4 billion institution in Waterloo, Iowa. Veridian has deep roots with Dwolla. In 2010 the person-to-person payments specialist got startup money by way of a million-dollar investment from two CUSOs: The Members Group and The Veridian Group.
The seizure warrant was issued and executed on May 14, although news of the seizure only now has surfaced.
What will happen to the seized funds is uncertain.
Dwolla has declined to comment on the seizure.
Mt.Gox, which bills itself as the world’s largest Bitcoin exchange, had not responded to a request for comment.
Veridian senior vice president, finance, Monte Berg provided a written comment: “On Tuesday, May 14, 2013, Veridian Credit Union received notice of a seizure warrant regarding funds held in an account on behalf of Dwolla users. Veridian Credit Union maintains custody of the Dwolla customers’ holding account. We have cooperated and will continue to comply with orders as provided in the warrant.”
In March 2012, Dwolla also was hit with a lawsuit filed by Bitcoin exchange TradeHill which disputed Dwolla’s chargeback policies.
At that time, Dwolla also declined comment. This story is elaborated upon in substantial detail in various documents assembled by the Omaha World Herald in 2012. Included are the TradeHill lawsuit and a Dwolla statement,