Topic: MtGox Extortion (Read 5478 times)

From the sound of it, scammers should have no problem providing other people's identity documents since they can obtain such documents simply be extorting them from anyone whose money they manage to get hold of by means of any pretext that they can later relate to "need to know" rules?

The documents exchanges are obtaining might for some exchanges be worth far more than any potential commissions they could make on actual trades, and this makes it sound somewhat unlikely that people who complain about exchanges holding lots of their money for such extortion purposes are sammers since if they were scammers the large sums involved would have already made it well worth their while to have already run precisely such an extortion scgeme themselves thus to have ready for use lots and lots of people's identity forms, which they would presumably be well prepared to spend whenever someone else tries the same scam on them over a large sum of money.

Whole thing kind of smells.

Is there at least some standard system that is used in imaging one's identity that watermarks it as being only a copy and specfically is a copy submitted into the safekeeping of a specific blackmailer/extortionist/KYC-excuse-purporter?

-MarkM-

I haven't seen MagicalTux explain why they require more ID (if true) than Dwolla itself for "verification" purposes.

Yes, it does. The funny thing is that they said they Dwolla is the company that made them require this new policy. I told them that with Dwolla, I just had to submit a utility bill (and no photo ID) and then MtGox changed their reason. They said since they do international business, they need more information.

"Sorry, but we already gave it to the customer like you told us to. And they already withdrew the dwolla to some random bank account."

At which point MtGox can then contact Dwolla and say "OK, that $100 I sent you?  I'd like it back in my account, since you now just charged it back to me.  This way we're not billed twice for the refund."

That still has the problem of not being connected to the original transaction, which can be reversed at any time.

What does Dwolla say to do when asked how to refund money back to someone unable to identify them to the standards Dwolla themselves imposed?  Certainly they should be able to answer this question, in writing I'd hope as well.

If Dwolla really has a policy this dumb, then what Mark should do is send the money straight to Dwolla (e.g. send them a wire or a check, for the aggregate sum of all funds in this situation, not to a Dwolla customer account, but to Dwolla themselves where they have sole control over the funds) and then tell the customer "We sent the money back to Dwolla on (date) via (method) because we cannot accept you as a depositing customer without satisfactory identity.  Here is a reference number to prove we sent it back.  We don't have your money anymore.  Ask them for it."  This would be 100% reasonable in my view as well as likely many others.

They'd also be forced to stop using Dwolla, killing the golden goose. You see the problem, here.

There is literally no way MtGox can issue Dwolla refunds without either eating the loss themselves, screwing the customer, or suing Dwolla into insolvency. And because of how incompetent the "we're not bankers" Dwolla team is, chances are that they'll never get around to allowing refunds.

If Dwolla ever held you to such a chargeback, you would have an instant public spectacle with their shareholders and client base.

Let me clarify a few points:

• There is no way to refund Dwolla transfers. We could send a transfer back for the same amount, but then if your bank were to cancel your deposit, you'd end with your initial deposit back on top of getting the same amount back from us. There is nothing protecting us against this kind of cases.

MtGox is exercising both a legal right and a legal duty.  Nor is their any evidence that MtGox has appropriated the OP's funds for their own use.

Tort?  You bet.  Just google "tort of conversion".

http://en.wikipedia.org/wiki/Conversion_(law)

Conversion, being a wrongful act, cannot spring from the exercise of a legal right.

Sorry friend, but consumer protection laws do not include extortion clauses. You entered into an agreement with them, and if you read the fine print, that agreement included language that they can and will take whatever actions, and make whatever changes, they feel necessary to run/improve/stay legal with their business.

The chances of your State Attorney General doing anything other than filing your complaint in the round file are exactly zero. It's a company based in Japan, doing business through the internet exchanged hypothetical tokens of value that have no corporeal existence. They are offering at least as secure a protection scheme for your documents as your state driver's license agency, probably safer, they have a stronger vested interest in protecting your data than either your state or federal taxing authorities, and have less than a fraction of a percent of the exposure that your bank, your doctor and dentist, stock broker, credit card company, landlord, school, mortgage lender, selective service bureau, post office automobile dealership where you purchased a car or any police department that has stopped you for a moving violation; yet every one of those entities saw, and probably photocopied your identification documents. And most of them are keeping them in electronic form, on servers that are about as secure as Paris Hilton's virtue.

Send them your id. Add a specific statement that you will hold them liable for any data loss of breach of the security of your information, and demand that they destroy all traces of that document when you stop doing business with them.

Let me clarify a few points:

• We cannot prevent people from sending us funds via Dwolla. Once funds are here, they are here.
• We have announced the AML requirements for everyone as soon as we were informed by Dwolla that we would have to comply with US laws on Dwolla customers and put as much time as we could before actually enabling these
• There is no way to refund Dwolla transfers. We could send a transfer back for the same amount, but then if your bank were to cancel your deposit, you'd end with your initial deposit back on top of getting the same amount back from us. There is nothing protecting us against this kind of cases.

.
Anyway since Dwolla implemented requirement to provide an ID sooner than we did for all our customers, chances are only people who are comfortable providing an ID were still using Dwolla at this point. Anyway we have to comply with US laws on this and require identification for anyone moving money in or out via Dwolla.

....Transactions may be frozen until the identity check has been considered satisfactory by Mt. Gox as required by applicable money laundering laws....

There is no crime being committed by MtGox and nor are they committing any tort.

None of this applies to you because they are requiring you to comply with the law.  There is no crime being committed by MtGox and nor are they committing any tort.  Asking you to identify yourself in accordance with AML/KYC requirements is not coercion or extortion.  Nonetheless, I really hope that you do make a complaint to the A-G and file a civil action.  You'll give the lawyers some free entertainment and likely end up with your financial accounts being investigated for possible tax evasion.