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US Court Freezes Assets of Mt. Gox CEO

Unknown Lamer posted about 7 months ago | from the should-have-stuck-to-magic-cards dept.

Bitcoin 132

jfruh writes "Mt. Gox has managed to enter court-protected bankruptcy in the United States, but Gregory Greene, who lost $25,000 in the bitcoin company's collapse, has convinced a court in Chicago to freeze the assets of Mt. Gox CEO Mark Karpeles and two companies associated with him. 'Money is moving around as we speak, bitcoins are moving around accounts associated with Mt. Gox,' said Greene's lawyer. 'Something is not right so we urgently need to get to the bottom of this quickly.'" The Mt Gox stole the missing bitcoins theory.

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Interesting parallel (5, Interesting)

Anonymous Coward | about 7 months ago | (#46465309)

In Japan, MtGox is not liable because bitcoins aren't money (i.e. nothing real was lost).

Re:Interesting parallel (2, Informative)

Anonymous Coward | about 7 months ago | (#46465375)

But in America, if it has value, it can be seized.

Re:Interesting parallel (2, Insightful)

lgw (121541) | about 7 months ago | (#46465585)

It's funny when the financial press mistakes MtGOX (Magic the Gathering Online Exchange, lest we forget) for "Mt. Gox", like it was a mountain or something.

It's pathetic when TFS makes the same mistake. C'mon, there are two bitcoin stories a day, we could at least get that right in TFS!

Re:Interesting parallel (0)

Anonymous Coward | about 7 months ago | (#46465659)

Mt. Gox literally refers to themselves as "Mount Gox" now. So it is fine to refer to them as such.

Re:Interesting parallel (4, Informative)

PRMan (959735) | about 7 months ago | (#46465685)

And their logo is a chart in the shape of mountains. They have adopted Mt. Gox as their official name long ago.

Re:Interesting parallel (1)

lgw (121541) | about 7 months ago | (#46465747)

Slashdot is supposed to be the place where we discuss the tech and ignore the marketing spin. While we maybe don't reach that bar often enough, we can at least make the effort, no? Especially in story submissions.

Re:Interesting parallel (4, Insightful)

arth1 (260657) | about 7 months ago | (#46466129)

Slashdot is supposed to be the place where we discuss the tech and ignore the marketing spin. While we maybe don't reach that bar often enough, we can at least make the effort, no? Especially in story submissions.

Don't you mean " Chips & Dips is supposed to be..."?

Re:Interesting parallel (0)

Anonymous Coward | about 7 months ago | (#46466359)

People have claimed that MtGox never actually was used for trading Magic cards. In any case, making fun of the name is also "spin" as the original owners have nothing to do with the current BitCoin site.

Eh... (0)

Anonymous Coward | about 7 months ago | (#46466513)

Slashdot is supposed to be the place where we discuss the tech and ignore the marketing spin

We're discussing bitcoins. There is no tech - it's all marketing spin. /. stopped being geeky a good decade or more ago. Now it's just a bunch of neckbeard libertarians who play lawyers on the Internet, and bored chair-warmers who long for when geek didn't mean businessman with an IDE (my role right now is the latter).

Re:Interesting parallel (0)

Anonymous Coward | about 7 months ago | (#46467763)

You are not discussing the tech either with your silly and ignorant rant which totally ignores that "Mt.Gox" was their Name for quite some while like - as some other poster pointed out - Slashdot hat a different name before as well.

Cry a river or maybe just shut up. Or start tech discussions. But at least admit that you were wrong and should have kept your mouth shut in the beginning.

Re:Interesting parallel (2)

Applehu Akbar (2968043) | about 7 months ago | (#46467653)

Having once lived in Japan, i've been kicking myself for not having climbed Mt. Gox before those tourists trampled all over it.

Re:Interesting parallel (4, Informative)

Bob9113 (14996) | about 7 months ago | (#46465965)

It's funny when the financial press mistakes MtGOX (Magic the Gathering Online Exchange, lest we forget) for "Mt. Gox", like it was a mountain or something.

It's funny when pretentious Slashdot posters trot out some half-understood fact to sound important. Mt. Gox has gone by "Mt. Gox" for quite some time on mtgox.com, on Wikipedia, and on Bitcoin Charts -- as well as in common use in Bitcoin forums.

Re:Interesting parallel (1)

lgw (121541) | about 7 months ago | (#46467725)

The evidence is in: giving this exchange the credibility due to a Magic card trading site was the correct move.

Re:Interesting parallel (1)

Cruciform (42896) | about 7 months ago | (#46466961)

As you can see from the Wikipedia article it was only used for MtG for a short time, then the domain name was repurposed.
It's been Mt. Gox for a few years.

Re:Interesting parallel (0)

Anonymous Coward | about 7 months ago | (#46467217)

I know, right? Do they teach NOTHING about Magic the Gathering in financial journalism school?

Re:Interesting parallel (4, Funny)

ackthpt (218170) | about 7 months ago | (#46466033)

But in America, if it has value, it can be seized.

If it has value it can be embezzled.

hahaha... (0)

mmell (832646) | about 7 months ago | (#46466405)

Have fun seizing cryptocoin - it's actively designed to resist that, y'know.

Re:hahaha... (1)

Shakrai (717556) | about 7 months ago | (#46466911)

Have fun serving an indefinite sentence in Federal prison for contempt of court if you're ordered to turn over your bitcoin and decline to do so.

Re:hahaha... (1)

mmell (832646) | about 7 months ago | (#46467125)

What cryptocoin?

Re:hahaha... (1)

Shakrai (717556) | about 7 months ago | (#46467241)

Bitcoins are just an asset, like any other, and if you think the US Attorney's Office can't build an asset paper trail you're in for a rude surprise.

Re:hahaha... (1)

mmell (832646) | about 7 months ago | (#46467381)

Sure. You got me (maybe. Maybe the bitcoins were in memory and were absolutely destroyed when the police seized my computers, I dunno).

About those (maybe existing, maybe not existing) bitcoins - how many have been seized to date? I mean, Silkroad was sure using the hell out of Bitcoin. Was all that money recovered?

Maybe I've got it wrong. Maybe troves of bitcoin have been seized worldwide. Could somebody site an example? To date, I haven't heard of any sizeable seizures of bitcoin.

Re:hahaha... (1)

mmell (832646) | about 7 months ago | (#46467417)

Poorly worded. The FBI did seize a ton of bitcoin.

Does it have a monetary value to the FBI? If so, bitcoin is fundamentally flawed.

Re:hahaha... (1)

Shakrai (717556) | about 7 months ago | (#46467663)

You may want to familiarize yourself with the concept of rubber hose cryptography [lmgtfy.com] .

Granted, the United States Federal Government won't literally beat you with a hose, but they will take away your freedom until you comply with the lawful orders of the courts. The Government will go over your finances with a fine toothed comb, accounting for any and all assets you currently or previously owned, including bitcoin. If you obtained any of those assets via fraud you're going to be on the hook for repayment, plus criminal and civil penalties on top of the fraudulent earnings.

Want to play the "I lost them" card? You can try, but you're still going to be on the hook for the full amount Uncle Sam thinks you owe your victims, plus the aforementioned penalties, and you're not wiping any of that away with a bankruptcy. It will follow you until the day you die.

Bitcoin doesn't spend at the prison commissary, nor am I aware of any reputable criminal defense attorneys that accept payment in bitcoin.

Re:Interesting parallel (0)

Anonymous Coward | about 7 months ago | (#46466441)

But in America, if it has value, it can be seized.

To a very small group of people it has value, to most it's like having your gold blocks in Minecraft seized.

Re:Interesting parallel (5, Interesting)

Lendrick (314723) | about 7 months ago | (#46465437)

It would be a delicious irony if people were able to recover some of their lost value due to government regulations.

Re:Interesting parallel (-1)

Anonymous Coward | about 7 months ago | (#46465555)

Only in your B&W world.

Re:Interesting parallel (3, Interesting)

JcMorin (930466) | about 7 months ago | (#46465711)

The government did seize twice 5 millions in cash from Mt. Gox banks account. Giving back this money would be a good start.

Re:Interesting parallel (2)

Shoten (260439) | about 7 months ago | (#46466435)

It would be a delicious irony if people were able to recover some of their lost value due to government regulations.

You mean like what would have happened if they were regulated like a real bank?

Just a few months ago, when there was talk of regulating exchanges like these, there was an uproar. I didn't think that the reasons for regulatory oversight would have made themselves apparent so quickly, to be honest. Just the fact that nobody can be sure whether Mt. Gox got ripped off or ripped people off is one reason alone.

I totally get that there are benefits to a truly untraceable, anonymous currency. But to those who oppose regulation for the simple fact that it's the government getting involved, I would advise taking a look at what happened to the banking industry back in the 1920s and early 1930s before making claims that it's all bad.

Re:Interesting parallel (1)

TWX (665546) | about 7 months ago | (#46466669)

I totally get that there are benefits to a truly untraceable, anonymous currency. But to those who oppose regulation for the simple fact that it's the government getting involved, I would advise taking a look at what happened to the banking industry back in the 1920s and early 1930s before making claims that it's all bad.

Yep. Rules and regulations are usually a byproduct of previous experience. Wildcat banks [wikipedia.org] often issued their own scrip, supposedly based on currency on-deposit, but often that currency was either other wildcat banks' scrip, or was so incredibly over-leveraged that they had really almost nothing on deposit to support their outstanding currency.

These banks could either go under due to bank runs or could just close up shop overnight, leaving the local employees stuck holding the bag while the owners ran off with what real money actually was on deposit. If other banks had this bank's scrip, that scrip was now valueless and that other bank was likely to have its own problems.

Re:Interesting parallel (1)

Cajun Hell (725246) | about 7 months ago | (#46467551)

It would be a delicious irony if people were able to recover some of their lost value due to government regulations.

The most delicious irony would be if his funds were frozen, and then he used "unfreezable" funds to hire a lawyer to argue in court to get his fiat funds unfrozen. Part of the point (I admit, there's a lot more to it than that) of asset freezing is to prevent justice so that suspects have a harder time defending themselves from abusive use of power. Bitcoin is one of the proposed solutions. But of course that means that Bitcoins thieves can't necessarily be fought the way you fight other types of thieves. What an interesting problem to have.

Re:Interesting parallel (-1, Offtopic)

Anonymous Coward | about 7 months ago | (#46465449)

Makes me wonder why people in say, EVE, aren't held liable or arrested for sweeping in and taking over an entire faction and claiming everything as their own.

Everyone knew the deal and should have been told to deal with it.
Then again, everyone wants Cryptocurrencies to become the next stage in the evolution of currency, so I can't really complain to much. But that sort of stuff won't be common for at least another decade plus as more (if more) currencies stabilize enough to create a stable economy. Single currencies are worthless if they can't be weighed against others. And even though Bitcoins can be traded with physical currencies, they are still capable of shitting it at the mere mention of a few twitter posts with enough followers and everyone panics and sells. (and stupidly, some morons buy it at this point in efforts to save it, which NEVER happens, it only prevents the inevitable and results in lost money)

Still a very interesting mystery, will be good to find out what happened.
Something doesn't seem right somewhere. Despite misunderstandings, bitcoin is highly traceable. Just not to people. (mostly)

Re:Interesting parallel (1)

petermgreen (876956) | about 7 months ago | (#46468173)

Makes me wonder why people in say, EVE, aren't held liable or arrested for sweeping in and taking over an entire faction and claiming everything as their own.

Eve online is a game, participents in the game knew or should have known that anything in the game is subject to the rules of the game and the whims of the games owners. They also knew or should have known that they were forbidden from exchanging those in-game "assets" for anything outside the game.

MT gox traders on the other hand have put their money and bitcoins in trust with the exchange so they can trade them with each other more easilly. The exchange has broken that trust either by stealing the bitcoins themselves or by incompetently allowing large scale heists.

Re:Interesting parallel (1, Insightful)

ron_ivi (607351) | about 7 months ago | (#46465469)

In Japan, MtGox is not liable because bitcoins aren't money (i.e. nothing real was lost).

Couldn't one say the same about most any fiat currency (backed by nothing but the whims of some private company (the Federal Reserve Bank) - not unlike how WoW gold is backed by nothing but the whims of Bilzzard)? And also the same about any currency with lenders that get to do fractional reserve banking (they essentially get to make money on whims by loaning out more than they have)?

Seems Bitcoins aren't that different than Zimbabwe Dollars.

Re:Interesting parallel (2)

Sockatume (732728) | about 7 months ago | (#46465515)

Japanese law begs to differ; it does distinguish between currency (however they define it) and other tokens.

Re:Interesting parallel (1)

Aighearach (97333) | about 7 months ago | (#46465993)

The good news their is that since anything of value has value in the US, this can still mostly be dealt with in the US courts. For Japanese people who were living and working in Japan, and transferring money to/from other Japanese, they'll be in the cold. But I expect US and European customers to get back at least 10% after arrests are made.

Re:Interesting parallel (1)

Anonymous Coward | about 7 months ago | (#46465753)

In Japan, MtGox is not liable because bitcoins aren't money (i.e. nothing real was lost).

Couldn't one say the same about most any fiat currency (backed by nothing but the whims of some private company (the Federal Reserve Bank) - not unlike how WoW gold is backed by nothing but the whims of Bilzzard)? And also the same about any currency with lenders that get to do fractional reserve banking (they essentially get to make money on whims by loaning out more than they have)?

Seems Bitcoins aren't that different than Zimbabwe Dollars.

You could say it.

But you would be completely wrong.

Re:Interesting parallel (1)

squiggleslash (241428) | about 7 months ago | (#46466059)

In Japan, MtGox is not liable because bitcoins aren't money

Couldn't one say the same about most any fiat currency

No. One couldn't. You see, a fiat currency, that is, a currency by fiat, is money by law. In fact, "currency by fiat" and "money by law" consist of a sequence "X by Y" where X is represented by synonyms of the same concept ("money", "currency") and Y is represented by synonyms of the same concept ("fiat", "law")

Re:Interesting parallel (3, Informative)

BasilBrush (643681) | about 7 months ago | (#46466393)

No. Each country has an official currency that the government use for accounting, to tax, and to pay. In the USA that is the US dollar. These official currencies are unique and irreplaceable for that reason. The government could choose to change to another currency, but you as an individual or company can't.

When you are taxed, you can't do it with bitcoin. You will be taxed on the official currency equivalent, and will have to pay in actual US dollars.

You libertarians are too hooked on the gold standard. The major fiat currencies are more stable. Take a look at a chart of the value of gold.

Re:Interesting parallel (0)

Anonymous Coward | about 7 months ago | (#46466897)

You libertarians are too hooked on the gold standard. The major fiat currencies are more stable. Take a look at a chart of the value of gold.

Not that I care either way, but your example of looking at the "value of gold" as a demonstration that fiat currencies are more stable is entirely stupid.

One ounce of gold bought 35 US dollars in 1971. Today, it buys what - 1400 US dollars? If we inflation-adjust at the historical average 3% rate, 35 US dollars in 1971 should be about equivalent to 125 US dollars today - not 1400. From that perspective, you would have been better off buying all the gold you could possibly buy in 1971 after the US left the gold standard, as your investment would have appreciated by 8.9% annually. Gold has even outperformed the DJIA index, which has only appreciated 7.2% annually since 1971.

The Wikipedia article seems to suggest good reasons for why Nixon abandoned the gold standard, but fiat currency stability was most assuredly not one of them.

Re:Interesting parallel (2)

Sockatume (732728) | about 7 months ago | (#46465477)

Japan doesn't think Bitcoin is a currency and subsequently has no idea how to deal with MtGox's liabilities, but they most certainly have not obviated them.

Re:Interesting parallel (2)

JDG1980 (2438906) | about 7 months ago | (#46465559)

Japan doesn't think Bitcoin is a currency and subsequently has no idea how to deal with MtGox's liabilities, but they most certainly have not obviated them.

How does Japan deal with other insolvent companies that owe liabilities in-kind rather than in raw cash? How would they deal, for instance, with an insolvent grain elevator where the customers' grain went missing? Why not just apply the same principle here?

Re:Interesting parallel (0)

Anonymous Coward | about 7 months ago | (#46466105)

The courts, not the police, deal with bankruptcy. And bankruptcy law has well established rules. Secured creditors get their cut and if there's anything left, it goes to unsecured creditors, and if there's anything left... well, they wouldn't be declaring bankruptcy, now would they? If you had bitcoins or dollars or yen or other deposits at Mt Fux, you're an unsecured creditor.

Re:Interesting parallel (4, Interesting)

pla (258480) | about 7 months ago | (#46465487)

In Japan, MtGox is not liable because bitcoins aren't money (i.e. nothing real was lost).

MtGox tracked account balances in both BTC and USD. Bitcoins may have no legal value, but wouldn't Gox remain on the hook for the dollar-denominated balances in their care?

Re:Interesting parallel (1)

Impy the Impiuos Imp (442658) | about 7 months ago | (#46466109)

Wouldn't they be a commodity though? Traded like any other thing?

Originally, money i.e. pieces of precious metal people wanted, was that, too.

It's all in the accounting (1)

sjbe (173966) | about 7 months ago | (#46466143)

Bitcoins may have no legal value, but wouldn't Gox remain on the hook for the dollar-denominated balances in their care?

Not necessarily. Depends on the nature of the custodial agreement and how the accounting was handled. Local laws play a role too. Remember that we we aren't talking about a regulated bank here so the usual rules regarding currency and banking don't necessarily apply.

And the bitcoins have a legal value, they just aren't considered currency by Japan. Big difference. They're still an asset, just legally speaking they are a different kind of asset. It's a distinction that in the end probably doesn't matter all that much.

Re:Interesting parallel (3, Insightful)

JDG1980 (2438906) | about 7 months ago | (#46465543)

In Japan, MtGox is not liable because bitcoins aren't money (i.e. nothing real was lost).

Whether or not bitcoins are "money" should be irrelevant. What matters is that they are a thing of value. How do we know they are a thing of value? Because someone is willing to pay for them. Therefore they are an asset, just as (say) a collection of classic cars or rare Atari 2600 games would be an asset. None of them are official currency, but they are things of value, and that value can be defined with a reasonable amount of precision by looking at what people are paying for these items on various markets.

Re:Interesting parallel (1)

SydShamino (547793) | about 7 months ago | (#46465605)

WoW gold also has value, can be sold (someone is willing to pay for it), etc. However Blizzard could stop renewing subscriptions and then shut off the servers, and people with gold balances would have no legal recourse, even in the U.S. where assets are more loosely defined the way you think they should be. The same would be true, for example, for Magic: The Gathering online cards and currency, which could be easily shut off in bankruptcy without legal resource to card or currency holders.

In Japan, law related to assets is a little more strict, and digital currency not backed by a world government simply doesn't count under any circumstances, whether you agreed to its value via EULA or not.

Re:Interesting parallel (1)

bluehenbear (621193) | about 7 months ago | (#46465669)

Bitcoin may not be a currency, but it is certainly could be considered property. See this article: http://www.nakedcapitalism.com... [nakedcapitalism.com]

good move (3, Interesting)

globaljustin (574257) | about 7 months ago | (#46465337)

MtGox has had this coming. They need to provide answers.

I don't see this as anything other than routing criminal proceedings.

Re:good move (3, Informative)

Registered Coward v2 (447531) | about 7 months ago | (#46465471)

MtGox has had this coming. They need to provide answers.

I don't see this as anything other than routing criminal proceedings.

Actually, it's a civil suit so the judge froze assets to prevent them from disappearing while the suit sorts itself out. It doesn't cover all the entities since some are in bankruptcy proceedings; once discovery starts it will be interesting to see what is revealed.

Re:good move (3, Interesting)

PRMan (959735) | about 7 months ago | (#46465705)

Karpeles has 200,000 BTC in an address that he has proven he has control over in the past. There's nothing to wonder about. He stole the coins (at least 200,000 of them).

Re:good move (2)

Comrade Ogilvy (1719488) | about 7 months ago | (#46466471)

Or perhaps he "lucked out" and his account with Mt. Gox came out whole with a clean transfer to the outside, while everyone else's bitcoin "disappeared" with the sinking ship. It has the whiff of fraud, even if we do not know without more details.

Re:good move (3, Informative)

JDG1980 (2438906) | about 7 months ago | (#46466933)

Or perhaps he "lucked out" and his account with Mt. Gox came out whole with a clean transfer to the outside, while everyone else's bitcoin "disappeared" with the sinking ship.

Under bankruptcy law, this would be known as "fraudulent conveyance". Courts don't look upon this kindly.

Re:good move (0)

Anonymous Coward | about 7 months ago | (#46467669)

Or the person who took them "donated" 200K back to the scapegoat.

Makes it a pretty "clear" scapegoat, eh? Who would even ever question the fact that he's to blame?

routine (1)

globaljustin (574257) | about 7 months ago | (#46466151)

heh...usually typos don't matter but in this case...

I don't see this as anything other than **routing** criminal proceedings.

routine...I meant to type "routine" not "routing"

afaik none of the MtGOX ppl are accused of any kind of crime & in general all currencies are used for "routing criminal" stuff...so you can't arrest BTC people just b/c its used in illegal transactions

Re:routine (1)

bberens (965711) | about 7 months ago | (#46466415)

No, but you can arrest bankers at HSBC for assisting in money laundering for drug cartels... oh wait.

What is this supposed to accomplish? (0)

Anonymous Coward | about 7 months ago | (#46465371)

You can't freeze bitcoin wallets, very easily.

Re:What is this supposed to accomplish? (0)

Anonymous Coward | about 7 months ago | (#46465729)

If someone keeps backups, a frozen bitcoin wallet isn't going to help the LEOs much. The coins can be easily moved to another wallet at any time... and wallets can be bought and sold anonymously, providing a true 100% money laundering capability.

Parallels! (5, Funny)

Thanshin (1188877) | about 7 months ago | (#46465377)

So they printed fake money, convinced people it was real, got the people's money, said they lost it, but actually were stealing it, and now they are saying they don't have money while moving money to private accounts?

If they had a flag they'd be a government.

Re:Parallels! (-1)

Anonymous Coward | about 7 months ago | (#46465391)

Why do you hate the United States?

why does it always have to be about YOU?! (0)

Anonymous Coward | about 7 months ago | (#46465909)

Maybe he was thinking of Zimbabwe. Maybe he was thinking of Greece. Maybe he was thinking of Spain.

So what's the current exchange rate for bitcoins to Beanie Babies?

Re:Parallels! (4, Funny)

Sockatume (732728) | about 7 months ago | (#46465525)

And if they were a government they'd have collapsed and taken down their entire economy. The proof of the pudding is in the eating.

Re:Parallels! (1)

Flammon (4726) | about 7 months ago | (#46466023)

Oh, it's coming. http://www.usdebtclock.org/ [usdebtclock.org]

Re:Parallels! (0)

Anonymous Coward | about 7 months ago | (#46466385)

Nothing is coming. We have a fiat based currency. More money is on the way!

Re:Parallels! (0)

Anonymous Coward | about 7 months ago | (#46467585)

The absolute amount is rather irrelevant what is more important is the level of debt vs GDP. Funny enough, that ratio is improving on the website you linked (the economy is growing faster than the debt).

Re:Parallels! (1)

UnknownSoldier (67820) | about 7 months ago | (#46466373)

Wait, were you talking about the American government [google.com] again?

I don't think for a second that Karpelès stol (0, Interesting)

Anonymous Coward | about 7 months ago | (#46465417)

He has shown honesty and good morals before (alongside his imperfect entrepreneurship). I think it's either about a grave accident (such as losing private keys) or a US govt. instance having pulled string in Japan, having seized their assets. Karpelès said (confirmed) already days ago in response to an internal discussion that "the US govt. doesn't want us to talk about it", which makes me believe it's indeed about seized assets, and that it's connected to the misguided suspicion that they had something to do with Silk Road.

Re:I don't think for a second that Karpelès s (4, Insightful)

JDG1980 (2438906) | about 7 months ago | (#46465593)

Wake up. Karpeles is a con artist and a sociopath. He'll say anything to string along the suckers for a bit longer. Not a word coming out of his mouth (or from his Twitter feed or whatever) can be believed.

The U.S. government loves to trumpet its drug/laundering asset seizures. Look at Silk Road. This thing was not done in a corner. Nor was the house arrest of Charlie Shrem for alleged Bitcoin-related money laundering covered up in any way.

The only way the government would demand everything stay on the q.t. would be if there was still an ongoing investigation. But if that was the case, then the messy public shutdown of Mt. Gox would have already ruined that. If the government was surveilling Mt. Gox customers and wanted Karpeles to keep his mouth shut, they would have told him to carry on business as usual so no one would be alerted, and Mt. Gox would still be running.

Re:I don't think for a second that Karpelès s (0)

Anonymous Coward | about 7 months ago | (#46465615)

You're writing this with no apparent background insight at all into Mark's previous acts of kindness in f.e. bailing users out from other lost exchanges. Why?

Re:I don't think for a second that Karpelès s (1)

Aighearach (97333) | about 7 months ago | (#46466095)

You've still never seen The Godfather?! O M F G

He does favors so people will owe him something. For example, the bitcoins of theirs he just stole. How can he steal all their bitcoins if some smaller exchange sours them cryptocurrency? No, he can pay it for them, out of the goodness of his heart, and his love for the crypto neighborhood.

Re:I don't think for a second that Karpelès s (1)

Comrade Ogilvy (1719488) | about 7 months ago | (#46466325)

There has been a suspicious whiff coming from Mt. Gox for about a year. That suggests (but does not prove) that Mt. Gox was aware they were leaking bitcoin. There most likely was a point in time when Mt. Gox still held substantial bitcoin, yet they kept the problem mum, rather than shutter their doors and figure out how to partially compensate their account holders. Even nice guys can be sorely tempted to back their little white lies with bigger lies and their big lies with things that might be fraud, when the ship is sinking.

His thinking is transparent (1)

Martin S. (98249) | about 7 months ago | (#46466187)

"the US govt. doesn't want us to talk about it",

Translates to : Blame the government and all the libertarian patsies will rush to our defence.

Re:I don't think for a second that Karpelès s (1)

glasshole (3569269) | about 7 months ago | (#46468175)

Why isn't this modded Funny, it must be sarcasm.

Government Competition (0, Funny)

Anonymous Coward | about 7 months ago | (#46465433)

The government just doesn't want any competition. They like their monopoly in stealing your money.

Oh So NOW you want regulation eh? (4, Interesting)

bobbied (2522392) | about 7 months ago | (#46465493)

So, let me get this straight. You want the government to order that the CEO of Mt Gox not have access to his assets? Yea, good luck with that.

If he was the one who took all the BitCoin from their depositors, what's to keep him from trading them? Nothing, really. Remember that BitCoin is unregulated by design.

Give it a rest, you lost your money and nobody can prove where it went. Oh the joys of an unregulated currency.

Re:Oh So NOW you want regulation eh? (4, Insightful)

Sockatume (732728) | about 7 months ago | (#46465535)

Err, pretty much the only thing the Bitcoin network does is "prove where [bitcoins] went". Outside the network is another matter. The issue isn't unregulated Bitcoin; the issue is unregulated Bitcoin exchanges.

Re:Oh So NOW you want regulation eh? (1, Interesting)

DarkOx (621550) | about 7 months ago | (#46465701)

Give it a rest, you lost your money and nobody can prove where it went. Oh the joys of an unregulated currency.

Give it a rest, you gave your money to Madoff. He lost it and nobody can prove where it went. Oh the joys of a regulated currency.

Good news though you also got to caught up a bunch of money in Taxation to support the SEC that didn't save you...

Re:Oh So NOW you want regulation eh? (1)

bobbied (2522392) | about 7 months ago | (#46467197)

Madoff wasn't running a "regulated" business either, his was a Ponzi scheme too. The difference here is that the SEC ended it, once they found out what it was.

Re:Oh So NOW you want regulation eh? (1)

PRMan (959735) | about 7 months ago | (#46465725)

And anybody that left large sums of money on an exchange where they weren't paying out in dollars for 6 months should have known better.

Re:Oh So NOW you want regulation eh? (1)

Aighearach (97333) | about 7 months ago | (#46466111)

You don't good luck for a court order. You just need the order.

Re:Oh So NOW you want regulation eh? (0)

Anonymous Coward | about 7 months ago | (#46466195)

Because this is meatspace, with a judge...
Another poster has mentioned:

Pretty much the only thing the Bitcoin network does is "prove where [bitcoins] went"

If the judge can prove that "I said don't do this, and you did it anyways", he uses his authority to have the police forcibly arrest you and put you in jail for contempt of court. The judge can further use his authority to track down the stolen money (via police force), and place it just about wherever he damn well pleases (like just keeping it as a fine).

You can be very clever and have "a vast array of shell companies, hidden gold in secret vaults, an army of false social security numbers, and an anonymous currency account" right up until you are in front of a judge who orders you, upon threat of life imprisonment, to do away with it.

Re:Oh So NOW you want regulation eh? (0)

Anonymous Coward | about 7 months ago | (#46466247)

No, I don't want the government to do a single thing to the CEO of MTGOX. I want everyone to learn a harsh lesson about the realities of an "online wallet": it's *someone else's money*. Keep your bitcoins under your own control, dumbasses.

Re:Oh So NOW you want regulation eh? (0)

Anonymous Coward | about 7 months ago | (#46466793)

So, let me get this straight. You want the government to order that the CEO of Mt Gox not have access to his assets? Yea, good luck with that.

If he was the one who took all the BitCoin from their depositors, what's to keep him from trading them? Nothing, really. Remember that BitCoin is unregulated by design.

Give it a rest, you lost your money and nobody can prove where it went. Oh the joys of an unregulated currency.

Who are you talking to? Do you believe Gregory Greene is going to read your post? Or are you talking to the Slashdot borg mind again?

BitCoin doesn't have to be a currency to be an asset. "US Court Freeze Assets of Mt. Gox CEO" would include everything of value both currency and non currency. WTF does "unregulated by design" even mean? Cash is "unregulated by design", because there's no regulation built into a piece of paper, but to say money is unregulated would be stupid. BitCoins are assets and assets are regulated, especially when owned by someone filing for bankruptcy. BitCoin will never be a loop hole that gets you around the law. If you think it is, you should ask a lawyer about money laundering before you get caught.

pastebin (-1)

Anonymous Coward | about 7 months ago | (#46465499)

All the news is coming from hackers that are posting on pastebin, So go get the source.

A test of the principles (4, Interesting)

Rinisari (521266) | about 7 months ago | (#46465523)

So this is actually a test of the one of the attractive principles of Bitcoin: no one can separate you from your money, assuming that you control your private keys. Karpeles isn't a complete idiot, so I'm certain the keys to what balance he himself maintains are safely stored somewhere only he knows (brain wallet?). So, assuming that he has substantial holdings in bitcoin, then what good does the asset freeze do? He is free to spend bitcoin, unless the asset freeze also prevents businesses from accepting money of any kind from him.

Same holds for the two companies, but they are much more likely to have a larger USD balance that is actually affected by the freeze.

Re:A test of the principles (3, Insightful)

JDG1980 (2438906) | about 7 months ago | (#46465643)

So, assuming that he has substantial holdings in bitcoin, then what good does the asset freeze do? He is free to spend bitcoin, unless the asset freeze also prevents businesses from accepting money of any kind from him.

If he violates the court order, it would be treated the same way as if he violated any other court order: he could be held in contempt and sent to jail.

Re:A test of the principles (0)

Anonymous Coward | about 7 months ago | (#46466401)

Mod parent up. The court has the power to imprison you. Physically. With a police force.

All of the illicit bitcoins in the world don't do you a lick of good in jail with no computer access.

Re:A test of the principles (0)

Anonymous Coward | about 7 months ago | (#46467861)

And any transaction is broadcast to the entire world. Try to trade, and fifteen minutes later the feds will be knocking on his door.

ROFL (2)

benjfowler (239527) | about 7 months ago | (#46465647)

I see that Mr Karpeles would tell anybody who would listen, just how clever he was, and how he is a member of MENSA.

Yet he presided over this utter, complete fuckup.

So who's clever now??

Re:ROFL (1)

Anonymous Coward | about 7 months ago | (#46466223)

He's the same sort of clever that the banker smart guys used to cause the 2008 crash, for which precisely ZERO of them ended up in jail.

We live in a scam culture. Fraud is the only way to do business today. The honesty in the system has been driven out, since dishonesty earned too much of the money. In other words, the bad money drove out the good.

There's only one option, then, for the common man: OPT OUT. Opt out before these entrenched fraud systems take you for every last dime (or bitdime) you have.

banking system in php. lol (1)

Anonymous Coward | about 7 months ago | (#46465981)

Karpeles is a php developer.

He probably wrote the entire exchange in php and mysql.

Re:banking system in php. lol (0)

Anonymous Coward | about 7 months ago | (#46466923)

Wow, another clueless Republican. We know your kind hates open source, but why try to disrupt this site with your political rants? You people try to make everything about politics. Also, the way you people use the term "open sores" is just disgusting and is an insult to everyone that contributes to open source software. None of the problems with these scammers had anything to do with PHP or MySQL.

If only (1)

TsuruchiBrian (2731979) | about 7 months ago | (#46466085)

If only his assets were all in bitcoins, then the US government wouldn't be able to freeze them.

What makes bitcoins so special? (1)

westlake (615356) | about 7 months ago | (#46466245)

If only his assets were all in bitcoins, then the US government wouldn't be able to freeze them.

What makes bitcoins different from any other asset, real or intangible, that can be converted into cash?

Re:What makes bitcoins so special? (1)

TsuruchiBrian (2731979) | about 7 months ago | (#46466593)

Bitcoins are not different from every other asset that can be converted to cash (for this case). Bitcoins are different than money in a bank account in terms of the ability of a government with regulatory power over a bank to freeze a persons assets.

The government can't call up a bank somewhere and pressure them into taking away your bitcoins. Like cash in your physical possession, if the government wants it, they have to come and get it from you (or hack into your computer).

When did bitcoin become money? (2)

mmell (832646) | about 7 months ago | (#46466521)

One of the powers traditionally reserved to governments is the ability to mint and coin legal tender - lucre, coin of the realm, payola, greenbacks, cash . . . money.

I've been able to write checks throughout my adult life. Bitcoin (no matter the technical underpinnings) is more like issuing drafts (checks) - their value is not defined by any reasonable currency; the reverse however is true (bitcoin has an arbitrary or not-so-arbitrary value in currency, but the value of the US Dollar/British Pound/Euro/etc. is not defined as having value relative to bitcoin).

Is anybody here still naive enough to confuse my (personal crypto) check for cash? I assert that the check in my hand is worth $100.00 - who'll give me $95.00 for it? I promise it's good . . .

Re:When did bitcoin become money? (1)

codebonobo (2762819) | about 7 months ago | (#46467297)

the reverse however is true (bitcoin has an arbitrary or not-so-arbitrary value in currency, but the value of the US Dollar/British Pound/Euro/etc. is not defined as having value relative to bitcoin).

Is anybody here still naive enough to confuse my (personal crypto) check for cash? I assert that the check in my hand is worth $100.00 - who'll give me $95.00 for it? I promise it's good . . .

USD Fiat has no legal enforcement as currency outside of the US either. Exchanges, Companies, Governments or Individuals can choose to accept them or not. They place a value on them dynamically by what they perceive they are valued at in reference to their currency.

This is exactly the same with Bitcoin.

Additionally, many judges and governments have indeed declared Bitcoin a currency. One example : http://www.courthousenews.com/... [courthousenews.com]

Government to the rescue again... (0)

Anonymous Coward | about 7 months ago | (#46467185)

Good thing you have a court of law to appeal to. Too bad they only take payment in "worthless fiat currency" eh?

Really? (0)

Anonymous Coward | about 7 months ago | (#46467223)

MTGOX is a Japanese.

Karpeles is French living in Japan.

beta bull (0)

Anonymous Coward | about 7 months ago | (#46468561)

beta this beta that . beta bullshit than the crap b4. its all the same sh1t. climate and NSA are still front and center. obumabullahit still exists. want to change something? let's change that!

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