Tuesday, August 27, 2013

Virtual Currency and Credit Unions

In the past week, I've seen two stories about Bitcoin and credit unions.

Credit Union Times reported that the Department of Homeland Security seized a $2.9 million Dwolla account held by Mt.Gox subsidiary Mutum Sigillum at Veridian Credit Union of Waterloo, Iowa. At roughly the same time that the account was seized, a court order stated "there was probable cause to believe Bitcoin virtual currency exchange and Dwolla client Mt.Gox was operating as an unlicensed money transmitting business."

A second story by Bloomberg stated that Tradehill Inc., an exchange for virtual currencies such as Bitcoin, is moving customer accounts to Internet Archive Federal Credit Union of New Brunswick, New Jersey. Internet Archive FCU was chartered in 2012 by NCUA as a low-income community credit union.

Bitcoin has attracted the attention of the banking regulators. The Wall Street Journal reported that "representatives from at least seven government agencies are scheduled to meet Monday with the main Bitcoin trade group." In addition, the New York Department of Financial Services has issued subpoenas to approximately two dozen Bitcoin companies seeking information on their business practices.




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