Topic: Criminal complaint against Mt. Gox and Mark Karpeles - page 2. (Read 4717 times)

A very interesting post by Prof. Lenz on how Mt. Gox may be a bank under Japanese law, and therefore subject to possible significant criminal penalties:

http://www.reddit.com/r/Bitcoin/comments/1ylnso/has_mtgox_already_reported_to_the_japanese_prime/

The feds can and do go after offshore companies.  The online poker busts are a good example of this.

Situations like this boil down to a matter of preference.  "The community" is not some monolithic entity run by a committee or a democracy in which the majority preference prevails.  People have different philosophies regarding Bitcoin and want different solutions when a crisis happens. 

You can discuss the philosophical issues regarding involving authorities in the problems of Bitcoin services until you're blue in the face but people have the right to act in their own best interest in situations like this and to seek punishment of wrongdoers if that's what they believe will lead to other services being less reckless.  It's not as though not involving the authorities has had a great track record in the past.

What do you call "work"

What outcome would you expect to see if govt intervention 'worked'?

That's really difficult situation. I also don't think it is good to ask help from the Feds. It will work only with U.S. companies.

Expecting the Gov to actually help.......LOL?

and that EXACT same thing would happen again,  once you call the police you can't direct, manage, or otherwise control them when they respond.


govt interference is not the answer folks, not in the short term and not in the long term, self-regulation IS the answer

This isn't usually a problem because most licensed money transmitters have more than enough assets to pay out customer balances even when they have to pay very large civil forfeitures.

There's inherent risk in using services you know to be unlicensed and uninsured, especially if they're small.  People might judge using the exchanges as being "worth the risk" of losing their funds to hacks, the operators running with the funds or regulators seizing the service and all its assets, but users know these risks exist and have little cause for complaint when those events actually happen.

that would suck since it's customer's funds and not even mtgox's that they seized. so they hurt the people for doing nothing wrong

It's possible that money will go to the government in a civil forfeiture and no-one will be able to claim against it.

Yep, not easy collecting your claim. I do wonder how it would work as the Feds do have some of MtGox's assets already (google "Feds Seize Assets From Mt. Gox’s Dwolla Account, Accuse It Of Violating Money Transfer Regulations"). I presume you could make a claim against that, but I would guess that the Feds have #1 priority on that cash and wont give it up easy.

You have no idea what you are talking about. This especially "all of things you say the U.S. courts can do is true but not through small Claims court." If they don't pay up you can request an order to seize property to pay the judgment. Also, you can bring any company you want to a small claims court. If they don't turn up, then they can't dispute your arguments, and you win. The court will issue a judgment in your favor.

What exactly doesn't make sense? If I could explain it any better to you then please let me know.

That was probably the jurisdiction stipulated in the contract between Coinlab and MtGox.

It's unlikely that MtGox has any significant assets in the US any more.  The whole point of the Coinlab/MtGox deal was to put MtGox at arm's length from US transactions.  They already saw long ago that US based assets would make them vulnerable. The company MtGox set up in the US in order to funnel transactions already had its funds on hand seized.

MtGox customers can certainly launch action in the US against MtGox, but it might not be the optimum legal strategy against a company which isn't based in the US and whose bank accounts are held in Japan and Poland.  There is also no guarantee that MtGox would accept the authority of a US court.  They've refused so far to recognise the authority of NZ law in relation to the Bitcoinica funds still held on MtGox.  Litigation is expensive enough and there is no guarantee that a Japanese court would domesticate any orders made in the US.

If you want to take a US-based route, then using US regulators is likely to result in faster action and a quicker result than protracted litigation initiated by users (especially when you consider that MtGox may have to pay out large amounts when litigation already in progress is determined later this year).

You're telling me MtGox has absolutely no assets in the US? I doubt that. A US court can seize anything under their jurisdiction, including a US-based bank account, private jet / company car in the US, whatever. If you've suffered damages then you can sue wherever you want. The only difficulty is collection (and transfer agreements are often in place - e.g. rack up a credit card bill in the USA, then try to run to the UK, and it won't be too difficult for the company to seize your UK assets via a UK court).

Why exactly are Coinlab suing MtGox in the US (Western District of Washington)? Are they smart asses too?

http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.docket.html

EDIT: Yes, coinlab, not coinbase.

Mark's statement said that their "business model" is OK in the eyes of the regulators.  That doesn't mean for a minute that they're not breaking any laws. 

It's absolutely appropriate to bring to the attention of the authorities that MtGox has been increasingly restricting the ability of its users to withdraw their funds and ask those authorities to look into whether the company is knowingly continuing to take more user funds while actually insolvent.  They can be forced to disclose the the authorities information which they're not obligated to tell their users.  Action by the authorities is likely to bring a definitive answer about the solvency of MtGox far more quickly than litigation by users.

I suspect you are right. OTOH, I suspect it is inevitable. Some adult supervision is clearly needed here. Karpeles refuses to deal seriously with the situation.

This type of action is EXACTLY what you guys really don't want.  You are literally asking for trouble.  

I'm telling you: Handle it internally, you don't want to invite the govt via any of their departments or agencies involved more that they already are.  


You're asking for the WRONG kind of help.  

If he gets locked up (criminal) or locked down (sec) either way you get locked out (funds frozen).

In his email interview with the [WS] Journal, Karpeles repeatedly said the company's solvency was confidential but that it had discussed its business model with Japanese authorities "to ensure that we are operating within the law here."

Interesting, where did he claim that?

Funny how people go running to big brother (SEC, etc) to solve a problem. You yourself can personally deal with the issue by suing MtGox directly. The small claims court is not expensive, and MtGox probably wouldn't even show up due to the cost of actually hiring lawyers. If you've lost a significant amount then team up with other grown ups who are suing MtGox in higher courts. Stop whining on forums about it.

 o please.
SEC deals with securities - which is what Trendon Shvares offered.
mtgox offers to "securities". all the legal experts here are not really experts.
besides the point Mark claims to be in contact with Japanese authorities so he's done the part for you