Court documents from May revealed the Department of HomelandSecurity seized nearly $3 million from a business account at the$2.4 billion Veridian Credit Union in Waterloo, Iowa, over what theDHS said was an unlicensed money transmitting business operated bythe business member's client.

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The business member, person-to-person payment service Dwolla,keeps all its deposits at the credit union, which also hosts itstransactions through the Automated Clearing House system.

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Dwolla client Mutum Sigillum, a subsidiary of Japan-basedBitcoin virtual currency exchange firm Mt.Gox, was determined to beoperating illegally by DHS. According to the seven-page seizurewarrant filed May 14 in Maryland U.S. District Court, Mt.Gox ownerMark Karpeles told Wells Fargo while opening a business accountthat he did not engage in money services.

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Had he replied in the affirmative to required questions askingif his firm accepted funds from customers and sent them based oncustomers' instructions, he would have been required to registerwith the U.S. Treasury's Financial Crimes Enforcement Network.

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Court documents do not state the firm was accused by DHS oflaundering money used in illegal activities or supporting terroristactivities. Instead, because the firm merely attempted transactionsin violation of the registration law, DHS Special Agent Michael T.McFarland told the court the funds were subject to seizure andforfeiture. Mutum Sigillum's funds at Wells Fargo were alsosubjected to a May 9 seizure warrant.

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Monte Berg, Veridian senior vice president, finance, confirmedthe seizure in a statement. 

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