Topic: Funds “frozen” in TyGrr-Bot’s MtGox account. (Read 6157 times)

Do you mean hard cash for bitcoins? If so: this would really be nice to have, and if these things start opening up in all places, we will have a secure world-wide cash-transfer system...

On the other hand, there are considerable resources involved in properly operating such an exchange. You'll need quite some physical security in order to cope with possible robbing attempts operating such an exchange would attract. If it weren't so sad, I would laugh my now (the largest BTC exchange accuses us as being criminals one by one, pushing us into becoming victims of real criminals...)

However, I think the whole bitcoin thing became big because of internet possibilities, and it can still use them to grow further. We just need to avoid creating single points of failure, like MtGox strives to be one. What we need is a common API for exchanges, and ideally a free software to operate one. This way, exchanges can be easily interchanged, and after some time more reliable ones will emerge because through the fiercer competition, no one can afford to pull MtGox-like stunts without quickly losing customers. Another thing that would allow to expand on this approach would be some mechanism by which customers and exchanges can prove that certain transactions have happened. This way, we could put up a secure rating system for exchanges by which new users can constantly follow which exchanges have the highest chance of correctly processing transactions.

Finally, I'd like to write some words to all currently operating and future exchange operators.

We cannot neglect that there are some problems involved with different countries' laws. Some may have chosen a bad jurisdiction to operate the exchange on. But if the exchange runs well and it's just some local law that is creating the risk for you to have to piss on your customers, please consider to move the exchange to another country. If you don't have the opportunities or the balls to operate it yourself in another country, I'm sure someone would pay a good price for a well-running exchange.

Another thing is the US financial crime regulation which is striving to have effects on other countries. One might argue that these effects may still be limited by local laws (after all, it's your local politicians protecting your local people's privacy rights who have to fight this out with the US). But in many cases, it may be better to have two separate legal entities, one with US financial business connections and a pure non-US entity. These should still work together rather seamlessly in order to provide a nice user experience, but this approach limits the data where US authorities may even think about requesting access...

+1000

And trying to comply with every law out there in the world will NEVER work, as trying to comply with some absurd law of a remote country on the other side of the globe, you can actually violate the law of the country in which you sit in  - e.g. the remote country wants freezing accounts and releasing information, on the contrary local law forbids freezing accounts without LOCAL court order and has strict privacy laws. Just a potential example.

I believe it would be the best if MtGox stopped trying to comply with laws worldwide, just stick to a single jurisdiction - where they actually sit their asses and can be arrested. Comply ONLY with Japanese law, Japanese AML and Japanese court orders. And ignore everything else. Close all foreign bank accounts, and keep only account in Japan. Rely on other people/companies selling MtGox codes worldwide.

Then the customer could actually know what to expect, could be quoted specific laws on which specific actions are taken.

Single jurisdiction exchange is the only way to operate sanely. Otherwise there will ALWAYS be some law somewhere in the world on which some exchange freezing/data-release/etc action could be based, and there is always some law you would break, no matter what you do. Stick to Japan, forget US and other bullshit. For US its best not to ever visit it also, because they've crazy laws and crazy law enforcement, and trying to play world policeman.

Think Neteller: http://www.theregister.co.uk/2007/01/17/neteller_founders_arrested/
http://www.justice.gov/usao/nys/pressreleases/January07/netellerarrestspr.pdf

No non-US Bitcoin exchange executive worldwide should ever visit US nor hold US bank accounts. That's the only feasible way to operate.

I think MtGox would be well advised to advertise a maximum freeze time (and to honour it) in order to improve their reputation. This way, using that exchange is still a bit lottery-like, but at least the damage done is somehow limited.

Complying with legal obligations is one thing. Actively searching for opportunities to hand over more confidential customer data to various agencies around the globe is another. I am not aware of any law which would make it necessary for MtGox to hand over data to the DEA by itself. And, if you see how many of their customers MtGox pissed on by now (just look around on the forums...), I'm sure they would immediately post it in order to repair some of their reputation if there was any.

On the other hand, MtGox' new business model of tracing back user identities for accounts which are suspected to use certain marketplaces raises some privacy concerns. If there was an actual crime investigation involved upon which data is requested, MtGox can send this information to the customers whose privacy was violated, and these customers can seek the help of a lawyer to defend themselves. On the other hand, if MtGox loosens their privacy terms in order to play police themselves and just sends data about users using certain marketplaces out (without any crime involved), we experience a shift from constitutional democracies to a more totalitarian model.

Well the only real hope is to get a network of hand to hand exchanges....

Heh, I like that, the LOL award.

No, I'm not joking. That shit really happened lol award well deserved

is mtgox really not returning funds? what happens to that money? although in mtgox defense it doesn't take much to be honest and submit your verification and for go these problems which I'm hoping will happen for me this week although I'm already verified.....

you're joking right lol and the award to the worlds dumbest criminal goes too....

At least Paypal returns frozen funds back after 180 days...

He is just saving his ass from legal us problems, I don't see what's wrong with mark doing that? I do see it wrong for it taking as long as it is to get my withdraw funds available to me when I'm already a verified member soon headed to trusted member if they resolve my issues. Please address this issue on my wire transfer and withdraws pending, thank you. I know you guys had a long vacation with golden week, welcome back but please get to work. Thank you!
dirtydiego
mtgox verified member

It may also be illegal under many countries' laws not to tell a customer that you transmit information about them to a foreign country.

1. Make agreements with as many agencies capable of threatening a person's livelihood.
2. Report any vague evidence you have about your customers to these agencies.
3. Hope for many customers to lose their freedom so they can't access their accounts anymore.
4. Reinvest their money.
5. Profit!

One may or may not like this way of doing business, but at least they could go without transaction fees by now, considering all the people with frozen funds, extremely long money transfer times and proactive engagement in new ventures targeted at creating hassle for more customers.

This is not very accurate. While it is true that international business involves laws of multiple countries, they will by far not all be applicable.

A smart exchange service operator will carefully choose appropriate jurisdictions in order to provide reliable service to the customers.


As different testimonials on this forum show, they have no interest in protecting their customers. Even if they really chose some bad jurisdictions for running a business like this, they could have placed prominent warnings for their customers in order to avoid bad surprises like this one. I understand they make good money from not doing so (every frozen account means more money for them to invest), so it is not surprising (although also not very legitimate-looking) that they chose this route.

The bottom line is that you cannot expect a regular customer to understand the legal implications of running a bitcoin exchange. On the other hand, the exchange operator has to. But a good exchange operator will also do his best to keep his customers informed so they don't run into traps. A bad exchange operator will happily wait for customers to run into situations where there is some excuse for freezing funds.

Don't hold your hopes for Intersango... Haven't you seen the thread where they locked the bitcoins of a dude who told them he wanted to withdraw the BTC to a silk road address?
Yeah, that was stupid of him

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

Hopefully the Bitcoinica/Intersango thing will eventually turn into a new full-fledge spot exchange.

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

This is absolutely ridiculous. Reporting their own customer to the police, just because a customer attempted to make a transfer to a believed third-party?

I am thinking of removing my MtGox account, because honestly Mark - this is just unacceptable behavior.

Even if your own invented internal company policy decided that you do not process transfers to third-party - it is completely enough to inform the customer that we do not process such transfers, and that's it. Calling the police? I am speechless. I thought you are someone who could be trusted, and not someone who reports to police for any slightest mistake. Banks make such mistakes routinely, for example transfers from joint accounts having the data of only one account owner in the transfer info, or old address after change of address, or even the banks address instead of customers address - I've all seen this. People change address, change names, have joint accounts, all these things happen routinely, and nobody calls the police the moment one sees some inconsistency. At worst the transfer gets reversed, and that's it. If you are calling the police for such things, that's my end of relationship with MtGox, sorry.

Anyway, a reporting a non-existent crime to the police is a crime in itself. Not only its wasting police time, but also wrongly accusing an innocent person.

Besides that what is the big deal with transfers to a third party? There are several currency-exchange websites, which all have to comply with AML regulations too, and many of them have no problem with transferring to third-party accounts.

See:

http://currencyfair.com/
http://currencyfair.com/perfectfor

http://transferwise.com/

for example. They both explicitly allow transfers of the exchanged amount to an account of a third-party.

And BTW both of them, as well as ANY other of many online financial websites handling money, like Moneybookers.com Neteller.com or even Paypal, a passport and a bank statement (or two) is sufficient ID.

I never seen any other financial service which refuses bank statements (thus excluding the half of the population which doesn't pay house bills) as AML verification. And I've signed up to a countless amount of financial services. All of them have to be compliant with AML laws, and yet none of them where as ridiculous as MtGox, and have such a customer-is-a-criminal-by-default-prove-you-are-not attitude.

glad you guys got through to them!!!!!     now team MTGOX how about getting to all the money you owe me?please

Very good news from the Mt. Gox AML department.


"Hello,

We apologise, Mark hadn't fowarded that conversation onto us. In that case, what you have already submitted is fine, your account will be approved immediately. For AML2 status, we need hard-copies of the documentation you have already submitted, notarised and apostilled.

We sincerely apologise for the inconvenience."



We are looking into gaining AML2 status so we do not run into these issues again. We will contact them and ask specificity what documents they would like to have notarized and mailed to them.

We would like to thank Mt. Gox for responding quickly to the issues despite having a week long holiday.