Mt Gox thinks it's the Fed. Freezes acc based on "tainted" coins. (unlocked now) - page 5.

MagicalTux

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Quote from: flower1024 on March 24, 2012, 06:30:37 PM

+1

does this mean that you lock an account as soon as his address has touched a fraudluent address?
at any depth?

does this mean that my coins are returned to the real owner? all? how much of them?.

i am fine that you dont decide this yourself and that you follow the law. but i'd suggest you state your position on your site. including the way you determine a "to-be-locked"-addresses and what happens to the coins itself.

thanks for your answer

We do not lock an account because of tainted coins, however we may require an ID. We may lock an account only if we have evidence the account owner is actually behind the theft, or if law enforcement have reached that conclusion and gets a court to order us to lock the account.

The coins may be returned to the real owner only if we actually caught and locked an account. If you are not the thief and act without knowledge that the coins you have are stolen, then you are "not wrong" (the place where you got the coins from is, and we may ask you where you transferred those coins from so the law enforcement can continue their investigation).
So far we have only been able to lock coins once (in 3 cases), and only a part. We cannot decide to return the coins to the original owner, a court has to decide this for us.

I'll see so we publish whatever we can publish on this next week.

flower1024

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Quote from: MagicalTux on March 24, 2012, 06:20:39 PM

Quote from: flower1024 on March 24, 2012, 10:15:10 AM

please define term "tainted coin" exactly!
i would love to have a way to check any deposit beforehand.

"Tainted" means we have received a request for investigation from the Japanese law enforcement (either the CyberPolice, or an international investigation backed by a court). In some cases we may cooperate with other law enforcement around the world on a case by case basis. As of today there is only one active case, and in the past 12 months, we have marked some bitcoins on only 3 occasions.

+1

does this mean that you lock an account as soon as his address has touched a fraudluent address?
at any depth?

does this mean that my coins are returned to the real owner? all? how much of them?.

i am fine that you dont decide this yourself and that you follow the law. but i'd suggest you state your position on your site. including the way you determine a "to-be-locked"-addresses and what happens to the coins itself.

thanks for your answer

MagicalTux

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Quote from: flower1024 on March 24, 2012, 10:15:10 AM

please define term "tainted coin" exactly!
i would love to have a way to check any deposit beforehand.

"Tainted" means we have received a request for investigation from the Japanese law enforcement (either the CyberPolice, or an international investigation backed by a court). In some cases we may cooperate with other law enforcement around the world on a case by case basis. As of today there is only one active case, and in the past 12 months, we have marked some bitcoins on only 3 occasions.

Anyway, laws in most countries means that any exchange operating legally is required to act upon knowledge of stolen properties, and prevent to the best of their ability resell of such (failure to do so causes the exchange to be considered accomplice and can cause the people running it to face various charges depending on the context). That doesn't mean that just anyone can come and see us asking to get bitcoins marked. We need some proof and law enforcement to be involved.

Because a Bitcoin exchange deals with both the Bitcoin world and the current financial (legacy?) world, we have to comply with rules from both sides. This means we are fated to be hated by both bankers around the world for supporting something that aims at replacing them, and bitcoin supporters for complying with outdated regulations. Our goal is to find the right balance between both worlds and create a kind of bridge to allow for easier adoption of bitcoin (if it was totally impossible to exchange bitcoin against fiat, we'd have some issues finding Bitcoin users).

chmod755

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Quote from: 556j on March 24, 2012, 12:12:59 PM

The same day I deposited BTC into gox that got my account locked, I deposited the same amount from the same wallet from the same payments/customers to my unverified bitcoinica account. That deposit went through with no problems.

Maybe bitcoinica didn't use the same coins Huh

btw.: Have fun getting zhoutonged!

Quote from: N12 on March 24, 2012, 10:24:40 AM

Everybody should know by now what MtGox’s policy is on this. If you are not okay with verifying your account if such a thing happens, you should simply use another exchange.

+1 - but I think people are ignoring the ToS like EULAs....

556j

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Here's another interesting fact I forgot to bring up that shows what a joke this whole situation is.

The same day I deposited BTC into gox that got my account locked, I deposited the same amount from the same wallet from the same payments/customers to my unverified bitcoinica account. That deposit went through with no problems.

jwzguy

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Quote from: N12 on March 24, 2012, 10:24:40 AM

Guys, I don’t understand all the fuss about this.

Everybody should know by now what MtGox’s policy is on this. If you are not okay with verifying your account if such a thing happens, you should simply use another exchange.

You know, free market and all. Noone is forcing you to use MtGox.

That's the point of this thread. Everyone does -not- know this. But your conclusion is absolutely correct.

Polvos

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I hope every customer in the Bitcoin forums see that you have a hidden dark list and that you are using it to seize coins at your will.

- Where can we check that tainted list? --> no answer
- How many % tainted coins makes your account useless? --> no answer
- Where can we download an easy software to check our addresses in order to grant use your exchanger in a secure way --> no answer
- What can a user do if finds some tainted coins in his wallet? --> no answer

You are only spreading fear and moving away new users from you and from our currency.

N12

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Guys, I don’t understand all the fuss about this.

Everybody should know by now what MtGox’s policy is on this. If you are not okay with verifying your account if such a thing happens, you should simply use another exchange.

You know, free market and all. Noone is forcing you to use MtGox.

DeathAndTaxes

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Gerald Davis

Quote from: flower1024 on March 24, 2012, 10:15:10 AM

Quote from: MagicalTux on March 24, 2012, 10:10:56 AM

Quote from: chmod755 on March 24, 2012, 10:01:43 AM

Dear Mt.Gox,

why do you allow unverified people to trade money for BTC, if you're trying to help the cops with "tainted" coins? I think there are a lot of "tainted" coins....

There are not many tainted coins. Except during big events such as the Linode hack, we rarely see any tainted coin hit us at all.

please define term "tainted coin" exactly!
i would love to have a way to check any deposit beforehand.

It is a secret list. You will find out when your account is frozen.

What could possibly go wrong with unelected third parties using secret internal list to seize the property of others without oversight or accountability?

flower1024

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Quote from: MagicalTux on March 24, 2012, 10:10:56 AM

Quote from: chmod755 on March 24, 2012, 10:01:43 AM

Dear Mt.Gox,

why do you allow unverified people to trade money for BTC, if you're trying to help the cops with "tainted" coins? I think there are a lot of "tainted" coins....

There are not many tainted coins. Except during big events such as the Linode hack, we rarely see any tainted coin hit us at all.

please define term "tainted coin" exactly!
i would love to have a way to check any deposit beforehand.

MagicalTux

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Activity: 608

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Quote from: chmod755 on March 24, 2012, 10:01:43 AM

Dear Mt.Gox,

why do you allow unverified people to trade money for BTC, if you're trying to help the cops with "tainted" coins? I think there are a lot of "tainted" coins....

There are not many tainted coins. Except during big events such as the Linode hack, we rarely see any tainted coin hit us at all.

chmod755

legendary

Activity: 1554

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Dear Mt.Gox,

why do you allow unverified people to trade money for BTC, if you're trying to help the cops with "tainted" coins? I think there are a lot of "tainted" coins....

rjk

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1ngldh

Quote from: DeathAndTaxes on March 23, 2012, 09:47:29 PM

That is the whole point. We don't know.

If Mt.Gox policy was "we will freeze account and seek account information when facing court order or legislative requirement" we wouldn't even be having this discussion.

there policy is they will freeze accounts which may seem suspicious based on whatever they feel is suspicious and release funds based on whatever they decide is good enough.

The first is called due process, the second is called bullshit.

I cede to you that that policy is BS, and should be changed to how you suggest above.

DeathAndTaxes

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Gerald Davis

Quote from: rjk on March 23, 2012, 07:41:26 PM

Who says the POLICE are not asking for the info? MtGox has repeatedly stated that they will comply with investigations of this sort, and just because they don't come right out and say that the cops are currently asking for the info doesn't mean that it isn't happening. Furthermore, the investigators don't know shit about bitcoin, and it is certain that they would just ask for as much evidence as could be mustered in bulk, instead of doing their own gumshoe work. I expect that this will remain the status quo for quite a while yet.

That is the whole point. We don't know.

If Mt.Gox policy was "we will freeze account and seek account information when facing court order or legislative requirement" we wouldn't even be having this discussion.

there policy is they will freeze accounts which may seem suspicious based on whatever they feel is suspicious and release funds based on whatever they decide is good enough.

The first is called due process, the second is called bullshit.

Say I sold you a video card and you paid me then I said wait these coins are tainted I need to freeze them based on my internal policy of coins looking suspicious and stuff. I then demand you provide me say photocpies of your ID, your mothers maiden name, your SSN, full address, phone numbers and everything else I need to commit identity fraud. When you say no well I guess I need to keep those funds frozen. They Police might want them. Sorry.

You would be getting me a scammer tag overnight. However Mt.Gox does the same thing and people fall in line and say "they have to". Really?

finway

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Just get verified, dude, no big deal.

rjk

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1ngldh

Quote from: DeathAndTaxes on March 23, 2012, 06:42:17 PM

SignMessage doesn't prove anything.

It does when you sign a message with an uncompromised key from an INPUT that goes to an output that is considered compromised. Take for example MtGox's famous 500K wallet - if the key were stolen, they could prove ownership by signing a message using an uncompromsed key that was previously used to add funds to the big fat wallet.

Now if the addresses were used for customer deposits, this might not be reliable, as anyone could have had a direct input transaction. But if the wallet were used only internally, or if there were other database records that correlated with huge deposits as well as the keys, then I would consider this method reliable. For instance, an archived backup of a database with records of a large internal transaction that went directly to a compromised key.

Quote from: DeathAndTaxes on March 23, 2012, 06:42:17 PM

Still that is the job of POLICE. If the POLICE investigated determined the claim was valid and demanded Mt.Gox provide ID of any depositing stolen coins that would be different. Nothing indicates that is the case.

Who says the POLICE are not asking for the info? MtGox has repeatedly stated that they will comply with investigations of this sort, and just because they don't come right out and say that the cops are currently asking for the info doesn't mean that it isn't happening. Furthermore, the investigators don't know shit about bitcoin, and it is certain that they would just ask for as much evidence as could be mustered in bulk, instead of doing their own gumshoe work. I expect that this will remain the status quo for quite a while yet.

Explodicle

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Quote from: jwzguy on March 23, 2012, 04:08:43 PM

Good job ignoring the very important point that your local laws for physical goods and even wire fraud have not ever been shown to apply to bitcoin.

Not to take sides, but I don't think this particular point is relevant. Courts handle bizarre concepts all the time.

It's not hard to imagine becoming the first test case and losing one's livelihood over it. Would you be willing to pay off any court-ordered fines in the unlikely event of their prosecution?

DeathAndTaxes

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Gerald Davis

Quote from: rjk on March 23, 2012, 05:51:10 PM

Wow. You seem to think that a forum is the one and only means of communicating the information, and that that makes it automatically invalid?
The ability to prove that they are his with a signmessage doesn't occur to you, nor the fact that the transaction log is cryptographically irreversible?

SignMessage doesn't prove anything.

Hint: the thief can SignMessage now also.

Still that is the job of POLICE. If the POLICE investigated determined the claim was valid and demanded Mt.Gox provide ID of any depositing stolen coins that would be different. Nothing indicates that is the case.

Clipse

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Quote from: Phinnaeus Gage on March 23, 2012, 06:04:28 PM

Quote from: DeathAndTaxes on March 23, 2012, 04:02:34 PM

Nefario please drop the strawman.

Nobody is saying Mt.Gox is vioalting their own terms and conditions. They wrote their own fraking terms and conditions so I would hope they don't violate them ... and if they do they can just change them. Nobody is also saying Mt.Gox should willfully break the law.

So please please please for the love of Satoshi stop using those two strawmen.

However between willfully breaking the law <-----------------------------------> asinine response to anoymous claims online

there has to be a place where common sense prevails.

Nothing under the law requires this level of scrutiny based on internet forum claims. Some anonymous person on the internet said that another anonymous person took some digital keys which belong to him. The coins were then transfered through dozens (actually now hundreds) of accounts and someone with a token amount of coins and likely an even smaller token amount of "tainted coins" to provide personal information because "the law" (as if some generical universal law exists) requires it.

BULL FRAKING CRAP!

Banks don't even do that kind of due diligence on small cash deposits. It is complete and utter nonsense. Just because Mt.Gox put it in their terms and conditions doesn't make it right. AML has nothing to do with stolen funds especially not unproven funds back up by nothing more than an internet post (BTW I think Zou is telling the truth but it has no relevence under the law).

Still your nonsensical and onesided defense of the indefensible has saved me the trouble of ever using your exchange.

Not taking sides, but many times in my life I've had large bills with ink on them like the one pictured below that offers proof that at one time that bill was illegally obtained. I've even had such billes given to me by bank tellers.

Thats crazy, Im in South Africa and they our banks wont even accept notes with small tears in it. Probably why our Banks didnt go belly up with the recent financial crisis Wink

Phinnaeus Gage

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Bitcoin: An Idea Worth Spending

Quote from: DeathAndTaxes on March 23, 2012, 04:02:34 PM

Nefario please drop the strawman.

Nobody is saying Mt.Gox is vioalting their own terms and conditions. They wrote their own fraking terms and conditions so I would hope they don't violate them ... and if they do they can just change them. Nobody is also saying Mt.Gox should willfully break the law.

So please please please for the love of Satoshi stop using those two strawmen.

However between willfully breaking the law <-----------------------------------> asinine response to anoymous claims online

there has to be a place where common sense prevails.

Nothing under the law requires this level of scrutiny based on internet forum claims. Some anonymous person on the internet said that another anonymous person took some digital keys which belong to him. The coins were then transfered through dozens (actually now hundreds) of accounts and someone with a token amount of coins and likely an even smaller token amount of "tainted coins" to provide personal information because "the law" (as if some generical universal law exists) requires it.

BULL FRAKING CRAP!

Banks don't even do that kind of due diligence on small cash deposits. It is complete and utter nonsense. Just because Mt.Gox put it in their terms and conditions doesn't make it right. AML has nothing to do with stolen funds especially not unproven funds back up by nothing more than an internet post (BTW I think Zou is telling the truth but it has no relevence under the law).

Still your nonsensical and onesided defense of the indefensible has saved me the trouble of ever using your exchange.

Not taking sides, but many times in my life I've had large bills with ink on them like the one pictured below that offers proof that at one time that bill was illegally obtained. I've even had such billes given to me by bank tellers.

Topic: Mt Gox thinks it's the Fed. Freezes acc based on "tainted" coins. (unlocked now) - page 5. (Read 17935 times)