Topic: If MtGox can ident the Bitcoins, why not fix it? - page 3. (Read 11621 times)

Let's explore that for a second.  MtGox knows which accounts got double paid and knows the specific Bitcoins it paid with.  Perhaps MtGox doesn't  track internally which specific Bitcoins or fractions come from where, but would be able to look the double paid entries and identify which Bitcoins or fractions were sent.  There should be a case for MtGox claiming exactly which Bitcoins and or fractions were stolen.

Someone might quibble if it was theft if MtGox paid it out - that making it MtGox at fault not the receipent.  I know my withdrawals never saw a double payout.

Some say redlisting is bad for Bitcoin.  Others, in this case myself, say no it isn't.  Bad: religious can tag someone as say PAID FOR AN ABORTION and he and his Bitcoins be damned.  Good: redlisting government seized Bitcoins, redlisting stolen Bitcoins.

Lets look how much was stolen, something like 6.2% of all Bitcoins in circulation which at the moment are worth roughly $458 million dollars.  It's tough to spend that much money.  So they are going to sell cheap. 

Who can buy in January and February?  Most Americans are climbing out of holiday credit card debt and if anything will be selling.  Speculators will buy most.  Who lost in MtGox?  Those who see the banks and wealthy in their own country devaluing their currency.  What happened with the April crash of 2013.  A massive transfer of wealth to speculators and a general devaluation of Bitcoin.  It did come back.  I know it taught me a lesson.  Speculators cause currency to be devalued.  Currency speculating is legal.  Currency speculators just aren't my favorite people.

So, who is going to shout loudest that redlisting is a bad thing.  Those who paid for an abortion?  No.  Speculators? Yes.

I say redlist those coins and devise a way to return the stolen property in Bitcoins to MtGox.

There is no case law here. Thus the only certainty is lots and lots of lawsuits. For Bitcoin the best outcome is if MtGox's records are so bad that they can't identify which bitcoins were stolen but this seems unlikely.

Some courts may go with your argument above. Others may rule bitcoin a digital commodity and order coins be returned to victims. It will likely vary by jurisdiction. As clarity in law is probably not coming anytime soon all we can be sure of is uncertainty in regards to this issue.

Recommended Reading:
How Bitcoin could become its antithesis
Failure to Understand Bitcoin Could Cost Investors Billions
Economic Devastation  

Such idea would damage opinion of bitcoin as currency you can trust, that is easy to exchange and transfer. I doubt it is possible and i hope it isn't. People who lose money at gox took they risk and must pay for it. They still have possibility to get it back by lawsuit so I wouldn't push any one to drastic method like this one.

You make it sound like bitcoin needs to be considered something like  legal tender by only mentioning cash. In reality there are quite a few exceptions to this rule (depending on country of course), D&T mentioned a few.

I'm not that interested in how the law is currently interpreted in some specific jurisdiction right now (no horse in the race either), but I would like to see someone actually argue why bitcoin should not have the same exception as these existing exceptions "to facilitate trade and commerce by favouring security of transactions over the protection of property rights in certain common, but risky, trading situations". Personally I have problems making a good case against that.

+1

That whole post was what I wanted to express but wasn't able to, thank you. It will be interesting to see the actual legal decisions when they start coming up -- I bet we'll get both interpretations initially but my guess is the same: bitcoins may not be formal currency but handling them as unique pieces of property makes little sense.

You have chain if title from the victim to MtGox. With records from MtGox you will also be able to identify the stolen coins that left MtGox. That is a sufficiently strong chain of title for a lawsuit.

Your assumption that the courts will rule that bitcoin should be treated like cash rather then a commodity is in my opinion foolishly optimistic. I have no horse in this race (not a MtGox customer). But at the very least this creates huge legal uncertainties for bitcoin.

There is no chain of title from the depositor to the current owner of a coin.  MtGox being off blockchain and pooled funds makes sure of that. You can trace a particular "coin" back to MtGox, but the trace stops there.  You can't trace back further than that.

The depositors didn't have any "coins" directly and thus have no claim with the actual thief (if one exists).  MtGox had its coins stolen (or embezzled).  The depositors traded Bitcoins for IOUs payable by MtGox.  Much like a bank there is no individual depositor's money.   The bank has a liability to the depositor.  If a bank is robbed it is the bank's money that is being stolen.  Now in the US we have deposit insurance but even if we didn't the bank couldn't just say "sorry that was your particular $100 bill stolen is last weeks robbery).  The banks funds were stolen and the liability the bank owes the depositor still exists.  Now in this case when MtGox lost their coins, they lost the ability to repay those IOUs.  In the size of the theft was smaller MtGox couldn't just say "sorry that was your coins stolen" the liability (IOU) would remain and depositors could seek damages against MtGox.  I know we went a long way round but while MtGox may have a claim against any coins that can be traced back to MtGox, no depositor would.

Still the application of demo dat rule is not a forgone conclusion when it comes to bitcoins.  It doesn't apply to legal tender and it also doesn't apply to bearer instruments (i.e. casino chip), or negotiable instruments (i.e. a check).  It is at least plausible a judge would rule that bitcoins are more like those exceptions than real property.  Until we see a court case we won't know for sure.  I am not a judge so what I think matters little but a bitcoin has more in common with a casino chip (a bearer instrument) then it does with a car (which is a unique specific piece of real property).

Note: to be clear I am not saying I have the answer just pointing out the law is pretty slow to react to technological changes.  This and countless other questions will eventually be decided but the timescale is measured in decades.

Sadly the court system will.

No, it wouldn't be... but, if noting the discrepancy on the ledger that didn't add up, he did nothing to plug the hole for almost 1000 days until the discrepancy had risen to around 770,000btc while he was actually around, THAT would be criminal negligence.

=squeak=

I didn't say a crime wasn't committed. I clearly said a guy going on vacation while the crime was committed is not a crime in itself. It's a breach of fiduciary duty if he knew about it and went any way, if you understand what that means you will realize it is a civil liability and not a criminal liability.

If the guy is working with the thieves in some capacity that is another story. Do you have evidence of this?

The Iraq treasury heist by Saddam's son amounted to 1 billion but 2/3rds was recovered.   The dollar value of the missing MtGox btc is greater than what's outstanding from that treasury heist and more than the next largest heist in recorded history.

Not a crime?  It will be difficult to convince many of that.   And if he is found not guilty of any criminal wrongdoing, some will say the New York banks pulled strings to have that verdict so as to undermine confidence in Bitcoin.

If he didn't steal them or otherwise do something illegal then for him it wouldn't be criminal anything. Breach of fiduciary duty, certainly. But that's a civil liability.

If he knew of ongoing btc disappearances before the holidays then left for a vacation only to return to find the number of missing btc had quickly risen to 770btc in his absence, would that be criminal negligence?

reminds me of a song

the days of wine and roses, laugh and run away, like a child at play...

he should keep in mind he isn't as pretty as Amanda Knox and as a result the federal grand jury might not find favorably.  might make jail less difficult tho.

They just bought a three letter domain name (and those tend to go for six figures) with depositor funds.  I guarantee you he isn't going by coach.  It isn't like it is his or the company's money he is spending.

I hope he's flying coach to NYC for the federal indictment.

I'm gathering you're excluding Lehman brothers, Madoff, etc?

~$428,000,000 dollars.  Makes it the second largest heist in recorded history aside from the value of art looted by Nazis.

http://listverse.com/2009/12/01/10-largest-robberies-in-history/

Well, to be fair that kind of loss is devastating and would definitely change anyone's perspective, at least in the heat of the moment.