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The U.S. Department of Homeland Security confirmed it has initiated legal action that prompted the Dwolla payment service to stop processing bitcoin transactions.

Nicole Navas, a representative for U.S. Immigration and Customs Enforcement, confirmed the legal action to CNET this afternoon.

Dwolla, a Des Moines, Iowa-based startup, which raised $16.5 million in funding two weeks ago, notified users about the move earlier Tuesday. It blamed the decision on "recent court orders" limiting its ability to send money through Mt. Gox, the largest bitcoin exchange.

"In order not to compromise this ongoing investigation being conducted by ICE Homeland Security Investigations Baltimore, we cannot comment beyond the information in the warrant, which was filed in the District of Maryland earlier today," Navas told CNET.

Mt. Gox did not respond to questions from CNET. It did, however, post a statement to its Google+ account saying:

MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox. We take this information seriously. However, as of this time we have not been provided with a copy of the court order and/or warrant, and do not know its scope and/or the reasons for its issuance. MtGox is investigating and will provide further reports when additional information becomes known.

Chris Coyne, co-founder of OkCupid, posted a screen snapshot of email he said he received from Dwolla this afternoon. It says: "Dwolla will be unable to complete your recent bank transfer [to Mt. Gox] and any future transactions."

Dwolla is not elaborating. Jordan Lampe, a company spokesman, told CNET that "Dwolla advanced the news of the seizure to Mt. Gox in under an hour of its execution. At their request, Dwolla followed up the initial communication to Mt. Gox with a copy of the warrant." Lampe said questions should be directed to Homeland Security or Mt. Gox, and refused to release a copy of the warrant.

Even though ICE's name refers to immigration and customs, the agency's actual mandate is far broader.

ICE's Homeland Security Investigations unit boasts 7,000 special agents in 200 U.S. cities that focus on crimes including drug smuggling, financial crimes, computer crimes, and export enforcement. That has included seizing Internet domain names, targeting sports streaming sites, and arresting a student for jailbreaking game consoles.

Homeland Security declined to elaborate on the warrant or court proceedings.

Update, May 15 at 9:40 a.m. PT: Here's a copy (PDF) of the seizure warrant obtained by DHS, courtesy of Ars Technica. It was signed by U.S. Magistrate Judge Susan Gauvey and seizes the contents of Mt. Gox's Dwolla account. The underlying crime that's alleged by a DHS agent is operating an "unlicensed money transmitting business." A DHS affidavit accompanying the warrant accuses Mt. Gox of opening a money-transmitting account without registering with the federal government, which makes the funds available for seizure.