Topic: why does mt gox care about one user - page 2. (Read 5233 times)

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I think its only fair to make amends for the fraudulent activity.

Sure some people are pissed that they cant get their cheap bitcoins, but those sell orders werent legitimate.

In previous hackings (all minor), Mt. Gox has refused to cover the losses of its users.
These losses have been small and no one would pursue legal actions over them. In this instance, Mt. Gox appears to be covering the loss of its user.
It seems very sketchy for Mt. Gox to make variable ex-post decisions about its contractual terms with users.

As Unk points out, cases where there are no explicit contracts are assumed to have implicit contracts which follow standard business practice.

Definitely would suggest consulting a lawyer if you suffered substantial financial losses in the 'rollback'.

You're the OP, are you now trolling your own thread?  

I do agree with you in the sense that MtGox has recently posted about their efforts to become fully legal in many countries.

If it is only 20, then I'm sure they will just cover the loss themselves.

when a hacker steals my 20 bitcoins I want the entire market frozen and every order to be reversed until I am satisfied

if so, that explains why they should find a way to reimburse their customer whose funds were stolen. it doesn't mean they should roll back trades an impersonator of that customer made with others.

i suspect they'll go through with the rollback as they've threatened, but again, to imagine they're doing this out of a duty to their customers would be completely wrongheaded. they're presumably doing it to cover themselves because it seems to them to be the easiest way out of a mess they negligently created. that's very different from 'responsibility' or 'professionalism', and it helps only (1) them and (2) their one customer from whom funds were stolen.

Its simply really. MTGOX should roll it back because they are responsible for the security breach

no matter how many times people repeat that, it's just untrue. mt. gox might wish to exist in an unregulated anarchist utopia, but it's subject at least to the laws of japan and very likely to other laws that apply under treaty obligations. at the very minimum, customers of mt. gox have contractual rights against it, and contractual rights very definitely exist even in the absence of express contractual terms; usually gaps in contracts are filled in with implied terms based on trade usage and practice.

you're right that one option a dissatisfied customer has is to leave. but if the customer is not just dissatisfied but wronged, another option is to sue. i'm not an expert on japanese contract law, but if the exchange existed in the united kingdom or the united states (two legal systems with which i have experience, even though not a lawyer), a legal claim by someone whose profits were disgorged as part of a 'rollback' would, in a situation like this, very likely be weighty. at a minimum, it would not easily be dismissed as frivolous or obviously wrongful.

again, in case it's not clear, a 'rollback' here would be identical to the following situation:  someone steals 500,000 btc and transfers it into mt. gox. they sell at low prices, and someone buys a number of bitcoins at $4. subsequently, the exchange rate rises to $13. mt. gox decides, however, that the trades are illegitimate, reverses them, and keeps the spread for itself. or, it turns over the money voluntarily to the authorities, or to the party it believes was the 'rightful' owner of the 500,000, in its own legal or ethical judgement.

in all those cases, what mt. gox would have done is very literally 'theft', and users would almost certainly have legal claims against it. i cannot distinguish that case from this one, substantively. surely mt. gox's position is no better merely because it, or one of its customers, was the party that was stolen from. its response is equally wrongful and self-serving in this case as in the ones above; it just happens to be allocating its portion of the illicitly recovered 'profit' from other people's trades back to one of its chosen customers.

A possibly legal (or illegal) response?
You (we) are dealing with an unregulated exchange, and most of the members know about that status, so talking about a legal response is a bit odd, IMO.
MtGox can do whatever they want, and their customers can ether stay (like I am) or leave.

i agree that that's the right kind of question to be asking, but all that happened here (reportedly) is that funds were stolen and then dumped. breaking trades isn't an appropriate (or possibly even legal) response either to theft or to dumping. it's a fine response to a glitch in the actual mechanism of exchange (if, for example, every order placed for 2.50 bitcoins was treated by the system incorrectly as if it was for 250 bitcoins).

suppose someone stole 500,000 bitcoins outside of mt. gox and then made these trades. suppose mt. gox then said to everyone who happened to buy at $4, 'sorry, we're not going to honour that trade. we'll give you your $400 back instead of the 100 btc you bought'. nobody would accept that, correct?
then what difference does it make that the theft happened to occur inside a mt. gox account rather than just before being transferred to mt. gox?

as this analogy suggests, there's a very good argument that what mt. gox is doing is entirely unjustified and amounts to anti-contractual theft from its own paying customers. it's one thing if it wanted to make up the loss; it's another to deny customers the benefit of a trade merely because they, as broker, permitted a theft to occur.

With so much money you can probably control the market. If it's true that the 400k transaction is the money that MtGox moved in a secure place, it's probable that it's nearly all the BTC money of MtGox, so 230k is more than half. What can you do with more than half the BTC of a pool? You can make the market "stable" and gain from its micro-movements, stopping the macro-movements. So the "stableness" of the last week could have been enginereed with this money.

#2 makes a great discussion. Can you think of any reason to have so many coins at MtGox other than setting up to intentionally crash the market?

I don't see the distinction between this and a glitch. This is behavior that was not supposed to happen. I was a very complicated glitch the used some actual people on the way, but a glitch none the less.

If you want anyone to click you should not use address shorteners.

a typo made by a user? no

a glitch in the mechanics of the exchange? yes

this wasn't a problem in the mechanics of the exchange. it was theft, followed by the thief doing something naughty in an exchange. the exchange functioned perfectly; mt. gox failed only as a fiduciary or broker.

mt. gox is doing something here that's primarily self-motivated, and i feel like they ought to be called on that. a rollback is for them, not for anyone else, except perhaps their customer from whom funds were stolen.


if someone wanted to cash out entirely from bitcoin and placed an order to sell everything, and that person owned several hundred thousand coins, that's exactly what would happen. presumably that possibility is what motivated people to put in long-term buy orders at $0.01 per bitcoin.

1) Some buyers report that they were. I'm not sure if I believe them since I could not, but indeed, it seems that the whole system locked up with such an unusual request.

2) I don't think the account was as big as it seems. I think a lot of panic sellers and bots joined the selling frenzy as they hit stop-loss amounts. But there was the 260K+ bitcoins at the end for .01, that must have been from the hacked account. Still a lot. It is very curious.

3) No, quit being silly

The owner sold his/her Bitcoin for $0.01 a peace. Obviously it wasn't a legitimate transaction.

I started out supporting the rollback and almost changed my mind; Want to try to help me answer any of these?

...why should mtgox revert everything...

1) Buyers were not able to place new bids during the meltdown, so it was unfair to all of those people. The whole thing could be called a computer glitch, and in those cases sometimes "real exchanges" do roll-back trades.

2) The big account smells very fishy. Why would anyone have such a huge amount of coins in an online account. You obviously cannot sell them all at once, unless you are setting up to intentionally crash the market, correct?

3) (Not an accusation, just a question) Maybe MtGox is really run by enemies of BTC?

What do you think?