Suing Exchanges for Forks - page 2. | Bitcointalksearch.org

HeRetiK

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Quote from: squatter on February 08, 2018, 01:21:57 AM

Quote from: ulhaq on February 07, 2018, 07:38:16 PM

Since the exchanges are acting as custodial agents, they are holding bitcoin on behalf of the user, just like a brokerage does not "own" the stock but holds it on behalf of the customer. Whether or not the exchange plans on spending that bitcoin, if they do not give it to the customer they are stealing from the customer. Since coins from bitcoin forks are associated with the private keys held by the exchange, the exchange cannot argue that they did not "claim" them by taking no action, because they do own them, whether they wanted to or not.

But does holding BTC in their custody entitle you to their private keys? We don't own/control the private keys in an exchange's wallet. They are definitely obligated to release BTC we deposited into their custody. Past that, I don't know.

I think that's the key point here. The exchanges agreed to hold custody of your BTC and your BTC only. Any forks that may occur are a different matter, especially since anyone can fork BTC; and integrating alt coin wallets, especially hardforked coins is a non-trivial effort.

Worst case an exchange could argue that they charge a 100% fee on handling hardforks. Even traditional brokerages sometimes withhold parts of dividends in the form of a fee to cover their administrative overhead and the only thing that you can do as a customer is to switch to a different brokerage with better conditions.

Same holds true for cryptocurrency exchanges. If you are unhappy with their forking policy, just switch to a different exchange. If you fail to find an exchange that has a favorable forking policy, just withdraw the BTC back to your own custody. Unlike traditional assets the latter is at least an option with cryptocurrencies.

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Quote from: ulhaq on February 07, 2018, 07:38:16 PM

Some exchanges have not, and have no plans, to give access to coins from bitcoin forks. Many of them are already worth a substantial amount of money, and likely will increase in value. Is there a legal basis for suing exchanges to get access to such coins?

Since the exchanges are acting as custodial agents, they are holding bitcoin on behalf of the user, just like a brokerage does not "own" the stock but holds it on behalf of the customer. Whether or not the exchange plans on spending that bitcoin, if they do not give it to the customer they are stealing from the customer. Since coins from bitcoin forks are associated with the private keys held by the exchange, the exchange cannot argue that they did not "claim" them by taking no action, because they do own them, whether they wanted to or not.

I could imagine people pooling together to sue exchanges if this argument is viable.

First of all, you are comparing an unregulated enterprise with another enterprise that is operating in a regulated atmosphere. For the fact that exchange sites performs the similar functions as that of a brokerage firm does not mean they are the same or they should be forced to comply with the same rule especially as it applies to regulations and performing a specific function.

Again, a lot of exchanges would issue a statement on their support for a particular fork or otherwise and would advise users to act on such. If your exchange site is not supporting your preferred fork, you have the option of moving to another exchange. I know Yobit is one that support even nonexistent forks. Another option is to keep in your own wallet then claim at your pleasure.

Whether you can sue or not, is not negotiable but whether the judgement will be entered in your favor is another thing entirely that would be decided by the learned judges.

squatter

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Quote from: ulhaq on February 07, 2018, 07:38:16 PM

Some exchanges have not, and have no plans, to give access to coins from bitcoin forks. Many of them are already worth a substantial amount of money, and likely will increase in value. Is there a legal basis for suing exchanges to get access to such coins?

Maybe, but there is no established legal basis. It'll be interesting to see what happens when a case like this actually goes to court. There's definitely no precedent. I mean, think about it logically: I could fork Bitcoin tomorrow. If no one adopts my fork, could you argue that exchanges are obligated to pay my fork's tokens to BTC depositors? There could be millions of forks like this. So we need clarity from the courts regarding what -- if any -- obligation exchanges have to pay out fork coins.

Quote from: ulhaq on February 07, 2018, 07:38:16 PM

Since the exchanges are acting as custodial agents, they are holding bitcoin on behalf of the user, just like a brokerage does not "own" the stock but holds it on behalf of the customer. Whether or not the exchange plans on spending that bitcoin, if they do not give it to the customer they are stealing from the customer. Since coins from bitcoin forks are associated with the private keys held by the exchange, the exchange cannot argue that they did not "claim" them by taking no action, because they do own them, whether they wanted to or not.

But does holding BTC in their custody entitle you to their private keys? We don't own/control the private keys in an exchange's wallet. They are definitely obligated to release BTC we deposited into their custody. Past that, I don't know.

ulhaq

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Some exchanges have not, and have no plans, to give access to coins from bitcoin forks. Many of them are already worth a substantial amount of money, and likely will increase in value. Is there a legal basis for suing exchanges to get access to such coins?

Since the exchanges are acting as custodial agents, they are holding bitcoin on behalf of the user, just like a brokerage does not "own" the stock but holds it on behalf of the customer. Whether or not the exchange plans on spending that bitcoin, if they do not give it to the customer they are stealing from the customer. Since coins from bitcoin forks are associated with the private keys held by the exchange, the exchange cannot argue that they did not "claim" them by taking no action, because they do own them, whether they wanted to or not.

I could imagine people pooling together to sue exchanges if this argument is viable.

Topic: Suing Exchanges for Forks - page 2. (Read 309 times)