A news report from The Register this past Monday suggested that Canadian anti-money laundering and financial crimes regulations and disclosures will not apply to bitcoin exchanges in Canada. This was based on letters apparently received by some exchanges from the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC). I have not seen the letters, but today I confirmed this position with a spokesperson for the FinTRAC. This posture presents an exciting opportunity for bitcoin exchanges that the Financial Crimes Enforcement Network (FinCEN) recently confirmed are subject to registration, monitoring, and reporting as money services businesses and money transmitters in the United States. On the financial regulatory side, those exchanges may find a more welcoming environment north of the border. However, remember that future changes to the regulatory structure in Canada are possible.

What is FinTRAC?

FinTRAC is an independent agency of the Canadian government that reports into the federal Minister of Finance. It is Canada’s financial intelligence unit for purposes of the Financial Action Task Force’s 40 Recommendations. FinTRAC’s mandate is to facilitate the detection, deterrence, and prevention of money laundering and terrorist financing activities. FinTRAC was set up and is empowered under the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the PCMLTFA) and the attendant regulations, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (the Regulations).

More…

Yesterday, it emerged that Dwolla, a US payment network, has stopped accepting transfers to and from Mt. Gox, the world’s largest bitcoin exchange, because of a seizure warrant issued by the US Department of Homeland Security. Here’s Chris Coyne‘s tweet with a copy of the message he received from Dwolla. Today, I received a copy of the seizure warrant dated yesterday and signed by US magistrate Susan K. Gauvey in Maryland. A copy of the warrant is here.

The warrant specifically targets the contents of Mutum Sigillum LLC’s (incorporated in Delaware and apparently a Mt. Gox subsidiary or sibling entity) Dwolla account held in the custody of Veridian Credit Union. Mutum Sigillum is alleged by the US to be an unlicensed money transmitting business within the meaning of 18 U.S.C. § 1960(b). For more on this definition, take a look at the warrant itself and at FinCEN’s guidance in respect of money services businesses and money transmitting businesses issued in March (here). The unlicensed nature of the MSB is the basis for the seizure order.

A confidential informant established new accounts with both Mt. Gox and Dwolla, funded his Mt. Gox account with US funds, exchanged currency in his Dwolla account for bitcoins, and then exchanged bitcoins back to dollars, directing Mt. Gox to transfer those dollars to his Dwolla account.

Based on the warrant, it appears that Mutum Sigillum was targeted solely because it is an unlicensed business, not because of any broader claims that (for example) bitcoin itself undermines the greenback. This is consistent with FinCEN’s March guidance. (Patrick Murck, General Counsel to the Bitcoin Foundation, wrote a great piece setting out his view that the guidance is an overreach. Worth reading if you haven’t yet.)

Apparently you can still remit to other exchanges through Dwolla to purchase bitcoins, and you can still remit to Mt. Gox to buy bitcoins (just not through Dwolla).

One of the many things I love about having a specialized, small law practice is my autonomy and flexibility. If I want to implement a business idea for Gaming Counsel, I can research it, think about it, and then do it. Provided that I comport with the law and the strictures of my regulators (e.g., the Law Society of Upper Canada & the State Bar of Nevada), I can go ahead and try new things. That’s a freedom I didn’t have as much of — not to say none of – at a big firm, and I don’t miss being more tied up.

With that in mind, I’ve decided to start accepting certain gaming business in bitcoins, which is intriguing for the firm. I don’t expect it will be a lot of business, but bitcoin is an engrossing concept and currency, and I’d like to at least try to keep up with its development and how my clients might like to do business.

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From OnlinePokerReport.com for the week of March 25th …

3 STORIES TO WATCH THIS WEEK

#1. Full Tilt Poker’s traffic slide just won’t quit. PokerStars has tried bonuses, splashy promotions and even PR stunts to prop up Full Tilt, so it will be interesting to see how PokerStars reacts this week – if they react at all – to FTP’s recent drop into 4th place (by cash game traffic).

#2. PokerStars & NJ: The online poker giant has yet to complete its NJ application. But the PR war between PokerStars and the AGA continues, and looks set to escalate as NJ marches closer to launching real-money online gambling.

#3. NY will almost certainly abandon their brief legislative flirtation with online poker this week when the state’s budget is finally passed.

A week filled with official holidays should ensure that the legislative lull of last week continues through the end of April.

+ THE WEEK THAT WAS

• A Florida bill threatened Internet cafes – and online poker along with them.
• Kentucky announced plans for online lottery sales (around 2015).
• PokerStars introduced a few new Omaha variants.
• bwin-party released 2012 results. And PokerFuse provided some color on the earnings call.
• Bitcoins took a step toward “respectability”.

RECENTLY FROM OPR

Check out my latest article for Casino Enterprise Management - Five Things Full Tilt Poker Got Right.

PICKS

#GoodRead - CalvinAyre.com published what is sure to be one of many pieces prescribing a remedy for what ails Full Tilt.

Neat - LIFE slideshow of unpublished photos taken around Vegas in 1955 (h/t @BrianPempus).

From OnlinePokerReport.com for the week of March 11th …

3 STORIES TO WATCH THIS WEEK

#1. PokerStars and the AGA  threw first punches last week in what could develop into an extended and mutually bruising battle. Are they interested in cooling down, or escalating further? This week should provide some clues. Also: It turns out PokerStars’ NJ application could drag out well into summer.

#2. IL and PA could both take legislative steps toward regulation. PA State Rep Tina Davis “might” introduce her bill mid-week (20% gross tax, no compacts, licenses to existing operators only). As for IL, look for clarification on the next step for online gambling after a planned Senate vote on the combined live/online gambling expansion bill was scuttled late last week. Seems like some IL Dems didn’t like what they saw?

#3. New Jersey was supposed to finish up a first draft of online gambling regulations last week. No word on what shape they’re taking, but with the pace to date I would expect more details – and more launch projections – as we move into the middle of March.

+ THE WEEK THAT WAS

• Iowa online poker died – for this session.
• Reuters reported on a rekindled push for federal regulation. But I didn’t see much new there.
• Speaking of federal, Politico reported the online poker dustup did real harm to relationship between Heller and Reid. Really?
• Minted Poker threw Everleaf right under the bus. But players are still struggling to get funds from the network.
• An iPoker skin added Bitcoin for deposits and withdrawals.

RECENTLY FROM OPR

I offered my quick take on the Illinois gambling bill . And on the timing of the AGA’s petition to bar PokerStars from NJ, which I also discussed on last week’s TwoPlusTwo Pokercast.

PICKS

@Follow - It’s tax time, and U.S. poker players with questions would do well to follow both @QuantPoker and@taxdood.

#GoodRead -  …and to check out their respective blogs: quantitativepoker.com and taxdood.com

Lots went down. SealsWithClubs is in Forbes. Saramar is still on her Mexican cashout adventures, now without the wisdom of her teeth. Srslysirius blew up Zac Hart. Marco left too. Hollywood Dave checks in about a facebook free-chip site. Butterfly labs CEO Josh Zerlan is just making shit up as he goes along. So much to cover in this 2+ hr show:

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

The holiday season always brings a nice in the tournament circuit giving players a chance to recharge their batteries, rebuild their bankroll at the local cash game, and a few even spend that time with their family. But things are ramping up now that 2013 has rolled around with a bunch of new festivals kicking off.

The latest running on the PokerStars Caribbean Adventure begins it’s schedule on the 5th, a couple WSOP Circuit events in Los Angeles and Choctaw, and the marathon festival of the LAPC is on the horizon. Minor tournament series continued to run in Vegas and Atlantic City even during the holidays but now it’s time to strap it up and get to work.

The turn of the year also brings in a new batch of U.S. lawmakers, so the poker world will continue to look towards Washington for some hint that online poker might return to the States. The odds are still long and not exactly the most pressing matter for the country but there will be debate this year.

# Everything you always wanted to know about online betting but were afraid to ask! #

Link Dump

Tweet of the Day – I really really need to learn this game. Perhaps Deebs can teach me at a rate affordable on an unemployed poker hacks salary.

I’m stuck in an Open Face Chinese Poker time vortex.

— Bryan Devonshire (@devopoker) January 4, 2013

Bitcoin: Making Online Gambling Legal in the U.S.? – This article should send Bryan Micon into spasms. Using the magical, mysterious internet currency to circumvent U.S. online gambling laws.

How I almost went to jail as a terrorist – Fun writeup from Dan Goldman about a crazy situation getting ready for the first and only PokerStars cruise when he had a little visit from Homeland Security. (With a h/t to @BryanMicon)

Texas Poker Gaming Act of 2013 Introduced in State Legislature – Another state, another poker bill. Maybe the federal government will start taking notice that it’s something people are thinking about. Also, shouldn’t you be able to play Texas Hold’em in Texas?

Lottery chief opposes online gambling proposals – Meanwhile in Iowa, the head of the their lottery flew all the way to our national seat to tell the federal big boys to oppose all online gambling.

Happy Holidays From PokerNews – Hello there Sarah Grant, Kristy Arnett, and Melanie Weisner. A little holiday video from our friends over at PokerNews.