Topic: isn't mtgox breaking normal commercial trading laws? (Read 673 times)
I suspect they may be breaking several laws recently by freezing withdrawals. I would not be surprised to see Mark Karpeles marched out of the office in the next few days in handcuffs. This won't be good for bitcoin acutely, so I hope they get their act together soon. Holding onto other people's assets while making no attempt to return them when requested, given Mt. Gox's representations as an exchange, is likely to be bad news.
Does it matter if they were? It doesn't take a rocket surgeon to realize avoiding an exchange which consistently provides poor service and poor communication is a good idea!
whatever we all think about mtgox and what/how its happened it seems to me their current position must now be breaking one or more normal trading laws in Japan.
1. trading while insolvent - they may not be of course but need to release some sort of third party auditors report that all is ok.
2. misleading statements - the people who have their money trapped inside mtgox are being told the major cause of the problem is inherent in bitcoin (ie the problems are not of mtgoxs making). Clearly from the industry reaction the problem is the way they have run their business that allowed a long known bitcoin issue become a commercial issue
3. general exchange/business rules - most people taking money where all of it less some fee is to go to another party must have that money in some sort of trust ( escrow?) fund. In New Zealand we have this for real estate agents and many others. It means if something goes wrong the money is still there to be refunded. And there would be a time limit eg 30 days if xyz happened to do so. Mtgox seems to be keeping peoples funds indefinitely.
4. becoming a bank without a banks licence - the japanese regulators must surely be asking if it has been doing any gearing up of its funds (called by other posters fractional reserves)
what say you?
1. trading while insolvent - they may not be of course but need to release some sort of third party auditors report that all is ok.
2. misleading statements - the people who have their money trapped inside mtgox are being told the major cause of the problem is inherent in bitcoin (ie the problems are not of mtgoxs making). Clearly from the industry reaction the problem is the way they have run their business that allowed a long known bitcoin issue become a commercial issue
3. general exchange/business rules - most people taking money where all of it less some fee is to go to another party must have that money in some sort of trust ( escrow?) fund. In New Zealand we have this for real estate agents and many others. It means if something goes wrong the money is still there to be refunded. And there would be a time limit eg 30 days if xyz happened to do so. Mtgox seems to be keeping peoples funds indefinitely.
4. becoming a bank without a banks licence - the japanese regulators must surely be asking if it has been doing any gearing up of its funds (called by other posters fractional reserves)
what say you?
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