The US government dislikes Bitcoin, and they figure that they can hurt it most effectively by targeting Mt Gox. Whether or not they have a case is almost a moot point. Vague allegations of money laundering will be enough to take a serious bite out of Mt. Gox's business. The feds will accomplish it in the exact same way that they destroyed Megaupload: by seizing their domain.
As part of the case apparently filed against MtGox in Maryland, they will likely soon confiscate the domain (since it is a .com and the US has declared itself the emperor of all .com's). Then, it won't matter whether they actually win the case. Having the domain gone for a long period of time will make a serious dent in their business. It probably won't be the death knell, since Bitcoin users tend to be more sophisticated and used to complications like this, but the filing of this case is probably a sign that Mt Gox will be headed out as the market leader.
it in the exact same way that they destroyed Megaupload
You mean by filing a case against them and then, in the discovery process, locating the emails in which the founders of Mt. Gox openly admit that the whole enterprise is built on deliberate cultivation of commercial copyright infringement, so much so that the operators of Mt. Gox actually pay their users to upload pirated movies?
That sounds far fetched. If the US is going to try to take down Mt. Gox, I think they'll do it a different way than how they went after Mega.
I think the point is that implicating MtGox in a money laundering scheme and showing the possibility of willful negligence on their part will likely be enough to tie them up in a legal process long enough to suffocate the site in terms of finances/operations.
No, it's the same way that they go after any online business. Take away their domain, and the business is dead. Within days, any hope of the domain returning to life is gone and people are onto the next site. Even if the business ultimately wins the case and gets the domain back, the government will have long since achieved its goal of destroying the business. A domain seizure is equivalent to a death sentence for an internet company.
Exactly, people need to take it as example of how resilient a website can be. besides, as someone mentioned before, bitcoin users are slightly more sophisticated than regular users, so there's even better chance of surviving such times.
The thing is that Megaupload didn't do that. They were actually well known for refusing to pay uploaders of copyright infringing content, and despite the DoJ carefully selecting the e-mails they presented in court this was even mentioned in one of them.
One of the e-mails presented as evidence Megaupload paid copyright infringers talked about them relaxing their policy and paying someone with copyrighted content uploaded to their account a commission for downloads because none of those downloads involved the copyrighted content. (Presumably they were using their account for backups or something, I don't know.)
Huh? The indictment had one of their key employees mailing all the rest of the employees with a rundown of all the pirated videos one of their users had uploaded, line item by line item, and the resulting bounty they paid him.
It has them compiling lists of all the bounties they would have paid out along with a summary of what they'd concluded was in each user's account, yes. Except for the one instance I mentioned they don't actually claim to have found actual payments, because the reason Megaupload only went to all that effort was so they could refuse to pay pirates.
I'm not even saying they were particularly ethical; part of the reason they didn't pay out to pirates was because it saved them money, and it's not like the pirates could complain - the terms and conditions were quite clear!
People on the internet always seem to act like Megaupload was such a perfectly legal website that did nothing wrong and was wrongfully pursued by the American capitalist pig-dogs. Cmon, they were implicit on the piracy.
As part of the case apparently filed against MtGox in Maryland, they will likely soon confiscate the domain (since it is a .com and the US has declared itself the emperor of all .com's). Then, it won't matter whether they actually win the case. Having the domain gone for a long period of time will make a serious dent in their business. It probably won't be the death knell, since Bitcoin users tend to be more sophisticated and used to complications like this, but the filing of this case is probably a sign that Mt Gox will be headed out as the market leader.