Call it a moment of dueling realities for Iowa-based paymentsinnovator Dwolla, a company with deep ties to the credit unionindustry through its supportby CUSOs The Members Group and the Veridian Group.

Bad news came on one front, good news on another.

A few days ago, Bloomberg News reported that Dwolla was on a short list of companies NewYork's top banking regulator had subpoenaed in an investigationinto the virtual currency Bitcoin.

In explaining the probe, N.Y. banking regulator Benjamin M.Lawsky wrote in a statement, “If virtual currencies remain avirtual Wild West for narcotraffickers and other criminals, thatwould not only threaten our country's national security, but alsothe very existence of the virtual currency industry as a legitimatebusiness enterprise.”

Lawsky added, “It is in the common interest of both the publicand the virtual currency industry to bring virtual currencies outof the darkness and into the light of day through enhancedtransparency.”

The New York activity is representative of heightenedgovernmental interest in Bitcoin. On Tuesday, Credit UnionTimes reported that a $2.9 million Dwolla account owned by a Bitcoinpioneer and held at $2.4 billion Veridian Credit Union in Waterloo,Iowa, had been seized by the federal government.

Dwolla spokesperson Jordan Lampe said, in a written statement: “Neither Dwolla nor itsfinancial partners process, sell, or package virtual currencyproducts or services. Dwolla is a well-respected softwaresystem that innovates within the existing banking systems to alloweligible users the ability to safely and securely move U.S.dollars.

“Dwolla is known for providing an improved financial environmentfor greater economic growth, accountability and transparency, andhas a rich history of promoting responsible innovation, regulatorycompliance, and best practices which it intends to continue.”

Lampe declined to directly comment on whether or not Dwolla hadin fact been subpoenaed.

In an interview, Lampe did note that Dwolla's present focus ison happier news, namely company founder Ben Milne's appearance onthe prestigious MIT Technology Review annual listing of topinnovators under 35.

Previous honorees include Google co-founders Sergey Brin andLarry Page, in 2002, and also Facebook founder Mark Zuckerberg.

In a press statement, Dwolla and MIT said of Milne, “For his work in designing an improved framework forpayments inside the U.S. financial system, Ben Milne of Dwolla hasbeen honored as an outstanding entrepreneur and will be featured onthe cover of MIT Technology Review's special INNOVATORS issue.”