It seems like this is the week for odd financial troubles for Mt. Gox, specifically the events pertaining to a lawsuit between Bitcoin’s biggest exchange vs CoinLab and now a warrant seizing the company’s Dwolla account.

Fortunately, not all is darkness and rainclouds—the Bitcoin hard fork today is going off without a hitch and barely anybody noticed that it’s even happening. A testament to how effective the highly democratized and peer-to-peer infrastructure that makes up the cryptocurrency’s internal function can work.

And finally, BitPay is hiring on Bitcoin core-developer Jeff Garzik so that he can work full-time on keeping Bitcoin innovative.

U.S. Department of Homeland Security issue ‘seizure warrant’ for Mt. Gox’s Dwolla Account

Mid-afternoon yesterday, Dwolla users discovered themselves unable to transfer money to MtGox and were presented with an odd e-mail when they attempted to do so. The e-mails indicated that a recent court order made it impossible to process transfers to Mutum Sigillium (a.k.a Mt. Gox’s account.)

A representative of Dwolla told BetaBeat that the mobile payments company does not act without a warrant from the applicable federal agency. “The Department of Homeland Security and U.S. District Court for the District of Maryland issued a ‘Seizure Warrant’ for the funds associated with Mutum Sigillium’s Dwolla account (a.k.a. Mt. Gox),” he said. “In light of the court order, procured by the Department of Homeland Security, Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum while Dwolla’s holding partner transferred Mutum Sigillium’s balance, per the warrant.”

A copy of the e-mail has been posted to Hacker News:

So far, no other Bitcoin exchange has reported having issues of this sort with Dwolla.

Ars Technica managed to get a copy of the warrant and spoke briefly to DHS representatives; the warrant reveals that the account was sized on account that Mt. Gox might be “transmitting money” without a license. While the DHS has refused to comment on the ongoing investigation, the warrant affadavits that Mark Karpeles originally agreed he would not be in the business of money exchange in the US—according to a document signed with Wells Fargo called the “Money Services Business (MSB) Accounts, Identification of an MSB Customer” form.

Also, according to the affidavit in the warrant, Mt. Gox (nor its subsidiary Mutum Sigillum LLC) are registered with FinCEN.

This has odd echoes with the recent lawsuit between Mt. Gox and CoinLab over U.S. payments processing.

Bitcoin blockchain hard fork happens today as versions migrate

Today, Wednesday, May 15th, is the day that the Bitcoin blockchain—the public record of all transactions over the entire peer-to-peer network—hard forks from a previous version to a new version. The newer version will allow updated protocol for v0.8 to use different sized blocks from v0.7 and will cause older Bitcoin clients to fail to operate in the future. Most people and a vast majority of Bitcoin miners are already upgraded so no ill effects are expected.

All in all, this looks a lot like a ho-hum mechanical change for the BTC protocol; but it’s also a big and impressive step that shows that the community can move with the times readily and keep up with the changing needs of the infrastructure of the currency.

This is necessary to prevent what happened last time when a disagreement happened between different versions of Bitcoin clients and started to cause a less-controlled hard fork. That too was handled extremely well and while it gave insights into what could happen should a similar event happen with the protocol in the future, it also revealed how robust the current infrastructure is; but it raises questions about the governance and scalability of the community.

In all, both that uncontrolled fork and this carefully agreed upon hard fork between versions right now are beginning to show that a highly democratized infrastructure and a currency that works on a peer-to-peer protocol can still work extremely well even without a central authority.

BitPay brings Bitcoin core-developer Jeff Garzik on board

One of the best-known Bitcoin merchant payment-services, BitPay, has recently hired Bitcoin core-developer Jeff Garzik to be part of their team. Garzik worked full-time for Red Hat while he worked on and off on the now-world-famous cryptocurrency’s protocol and clients.

“BitPay recognizes the need for more resources and developments in the core Bitcoin protocol, especially in the areas of scalability and reliability,” says Tony Gallippi, co-founder and CEO of BitPay. “We strongly encourage other Bitcoin companies to do the same, either through crowdfunding efforts or direct contracts, grants, or scholarships.”

Getting a job at BitPay will allow Garzik to work full-time on Bitcoin and that could mean a lot of good things for the development of the core principles related to the currency.

“Bitcoin is growing up, no longer a hobby but now a professional payment network used worldwide,” says Garzik. “BitPay’s contributions to the bitcoin open source software will benefit the entire community. After working on bitcoin open source software for years as a volunteer, I’m excited that BitPay is now sponsoring my work.“

In the market of today, corporations are akin to the patron merchant-lords of Venice who would hire on artists in order so that they could work on magnificent works of art. Nowadays it’s programmers, developers, and R&D that run the world and BitPay is in the midst of the bitcoin revolution so this could be a very good thing.

There’s also little sense of a conflict of interest here (which could be a concern for anyone looking at a business “controlling” a developer) because BitPay is part of the Bitcoin ecology and depends heavily on its proper and healthy operation.

Much applause for BitPay and we hope good things come from Garzik’s newfound employment.