14 DAY TRIAL // There are now more details on the US investigation into Mt. Gox which resulted in the government freezing accounts associated with the BitCoin exchange and its owner, Mark Karpeles.
Dwolla, a payments company, revealed that the government ordered a freeze on any account associated with Mt. Gox, but could not provide any further details.
Now, it seems that the US government, as the Department of Homeland Security is investigating, believes that Mt. Gox is operating illegally as a money exchange and transfer service.
In a sting operation, they determined that funds used to buy Bitcoins or used to pay for Bitcoins pass through one of Karpeles' accounts that isn't supposed to be used for transfers.
This is in violation of the US laws and can be punished with fines and even a five-year sentence.
Bitcoin price took a dive after news of the investigation surfaced, but not a significant one. The inability to use Dwolla to fund Mt. Gox is a problem for liquidity, but Bitcoin transactions aren't affected. Still, Mt. Gox is by far the largest Bitcoin exchange.