Topic: Mt Gox thinks it's the Fed. Freezes acc based on "tainted" coins. (unlocked now) - page 6. (Read 17925 times)

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?

Why not? A clear and precise link from the beginning of where the issue started, to wherever they are now is pretty hard  impossible to argue with, I'd say.


OT, why is it taking so damn long for Bitcoin to get its day in court?

+1

Imagine walking into a pawn shop; you have a watch to sell, and so you place it on the counter.  The pawn shop owner then confiscates the watch and says, "I don't know, you seem a little fishy to me."  He then asks you for a driver's license and telephone number and tells you that before he can consider letting you pawn the watch, he needs to conduct an investigation to make sure that you aren't a criminal.

At this point, of course, you naturally ask for your watch back as you don't like the glare of scrutiny coming from the pawn shop owner.  The pawn shop owner tells you, "I'm sorry, I can't give the watch back to you either.  After all, you might be a criminal.  Either provide the necessary identification or I retain the right to keep your watch."  By this point, you're trying to argue reasonably with the pawn show owner -- surely he doesn't do this with EVERY customer, does he?  It's your watch and this son of a bitch is telling you that it might not be, or, even if it is, that perhaps you didn't acquire it legally. 

And what evidence does he have to support his claims?  Nothing, zip, nada -- only a personal judgment that the possibility of fraud exists, and that the existence of the possibility alone is enough justification to confiscate your watch.

I'm with him.

WRONG. In certain countries they're asking for a notarized form of identification - one user was saying that the cost was $50. However, even if it was free, as pointed out by the OP of this thread, it's not their right to demand it. The AML TOS you're referring to was not the issue here, because the OP was not in violation, as the OP already stated and I already repeated.

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.

The ethical problem is that they allow the deposits and transactions to occur, THEN lock the account. This "suspicious activity" is, as was already pointed out, completely undefined. As applied it appears that all bitcoin transactions can also be called "suspicious activity."

Please, continue to argue your head off - you're just making your exchange look bad. You've avoided all the real problems we've pointed out with your arguments, and you clearly think extortion is fine. Great! At least people can see it before they deposit money or BTC with you.

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.

Here's a link to the Theft Act, and here's an excerpt:


Even if Bitcoin is classified as "goods", I don't see anything in the Theft Act that says AML procedures make any difference.

Yes, to get to this more ideal situation, we will have to survive this intermediate period, in which we will have some dependence on exchanges.

This is the first time I've been seriously worried about Bitcoin's future. I still can't believe exchanges could be so short-sighted as to behave in this manner.

Agreed. Unfortunately, there is little chance of this happening.

Exactly. Bitcoins aren't physical goods. They aren't even digital goods (data). They are more like points in a game, existing only in the minds of the participants. The rules of this game say that whoever can provide a valid, signed transaction controls the bitcoins. Within the rules of the bitcoin system, there is no such thing as stolen bitcoins. If you have the private key, however it may have been obtained, you are a legitimate (co-)owner. This is not to say that no crime has occurred, but that crime--unauthorized access to the computer holding the private key--is independent of the bitcoin system.

The real problem is that the "decentralized" bitcoin system can essentially be held hostage to the demands of a single organization (MtGox) involved in over 80% of all bitcoin transactions. We need more diversity. Given a reasonable amount of competition, no exchange could afford to pull stunts like this. More to the point, we need to rely less on exchanging BTC and USD and instead develop a proper market involving only non-monetary goods and BTC. Currency exchange should be on the fringe, not front and center.

Assuming there's legal precedent to treat bitcoin the same as physical goods which can be stolen (which there isn't as of yet), you still have NO PROOF that those bitcoins were stolen.

Likewise, the person transferring into your accounts cannot provide proof they don't have stolen coins. People may have plenty of completely legitimate reasons for not wanting to give you all kinds of personal ID, though.

This guy was NOT VIOLATING AML REGULATIONS, and his money is being held hostage. He has not done anything "suspicious" - he's merely been using bitcoin as it was meant to be used, as digital cash.

Bottom line - users have to trust the exchanges not to pull this kind of shenanigans - and if you agree with Mt.Gox's shady behaviour here, you can't be trusted either. Which is very disappointing - because we need alternatives to MtGox when they start with this incredibly misguided nonsense.

I think they are probably targeting people from certain places and making them verify right after the deposit. Knowing there's a decent chance they won't bother thus forfeiting the account. I wouldn't be surprised if they had algorithms in place to do this all automatically. Then yes verifying accounts does turn into a profit. My case is a good example of it.

Today they replied to my second support ticket and demands that they release my funds:



As expected an "upload your docs or go fuck yourself" Of course "suspicious activity" is left undefined and completely up to them. They also ignore all inquires about what percent of the coins were "tainted."

I also love the mt gox support reply in this thread linking to why they require verification, yet I was completely within their guidelines for unverified accounts according to the link they posted here. https://bitcointalksearch.org/topic/m.716220


I want to thank the community for the support in this thread. Even though gox has a lawyered response for everything you guys see though it and for what it really is. I appreciate it.

Nefario - as pointed out by the above poster, your legal claims sound pretty outlandish. But I am disappointed you do not see the larger issues with adopting this policy.

1) The person contacting you can never prove their claim is true.
2) The person who transferred money into your system is likely unaware - and proving otherwise is impossible for you. How would an innocent person who received a bitcoin transfer into one of their addresses (something they have NO control over) even know this had happened? Users have NO INFORMATION about which coins you guys are deciding to outlaw.
3) The entire concept of "tainted coins" can destroy the value of bitcoin. Exchanges continuing down this path are reprehensible.

Please supply a reference to the law to which you refer.

All countries have the same law? Who would have thought it.

And what do you mean by "an address that happens to be in your system"?

Bullshit. You are only hurting innocent people.

Look, I don't have programming skills. I don't have too much money. I don't live in a high end tecnological country. But I do love freedom and have determination.

So I can assure both of you that the same day the tainted coins list is published I will be starting a bounty searching for someone to develope a mining software whose only purpose will be melting the block reward with the huge fees from a fake transaction with a mix of good and tainted coins.

The shitty future you are going to have tainting is:

- Donation addresses shotgun-spreaded with tainted coins.
- P2pool miners receiving some tainted coins as transaction fees and getting their GOX-intersango accounts seized.
- Deepbit exceeding the 50% of mining network.
- Mistery miner 0Tx-blocking.
- Mixinglaundry services.
- Coinmelting companies with the new developed "meltmining" software.

Your required by law to freeze accounts based on someone saying something on a forum.

In that case MtGox stole 800,000 coins from me.  I will get you the addresses in a few minutes.  Please freeze any account which have funds coming from one of "my" stolen addresses.

Thank you for your assistance.

What do you mean by one of your addresses? that someone would transfer their stolen stash to addresses you give when creating an intersango account?

If that's the condition I doubt it will ever happen. It's pretty safe to assume that someone wouldn't transfer stolen coins to an address of an exchange, to which they have no private keys. Especially someone with the capability to perform the Linode attack.

Otherwise, if it's sent through a hoop it's safe to assume he was innocent or guilty and very stupid. If in doubt, what do you do?

You can also have people intentionally tainting random addresses. There are no private active addresses, as you surely know. Any address with any number of transactions is in the blockchain.

Because of these reasons there is no such thing as obviously stolen coins. The best you have is "likely stolen coins."

I really don't care if you check anything. Your company has become all what we fight against when some of us adopted Bitcoins. As a 80% exchanging transaction controller you have turned into a slow-big-fat-ass target for governments and hackers.

What do you expect will happen when your company officially announce that not all coins have the same value?

You, my sir, are attacking and potentially a risk to the best freedom currency I know.
And that is why I wish your extinction.

Is this seriously the first time you geniuses thought about this problem? And you think it's ok to lock people's accounts without notification and then hold their money hostage until they comply with your every whim, even though NOTHING you're doing can ever be used to prove someone stole coins?

I have a lot of faith in the fundamentals of bitcoin, but it's certainly possible that irresponsible actions and tyrannical bullying from an exchange with too much market-share could indeed kill it. I was hoping you guys were smarter than that, seeing as how you supposedly have a large bitcoin investment yourself. But it looks like I was wrong.

How about coming with the money and giving it back to his owner? especially as you've already been selling his coins.

That's actually stealing.