US Court Freezes Assets of Mt. Gox CEO

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US Court Freezes Assets of Mt. Gox CEO

Posted by Unknown on Wednesday March 12, 2014 @04:48AM from the should-have-stuck-to-magic-cards dept.

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 by Anonymous Coward · 2014-03-12 04:50 · Score: 5, Interesting

In Japan, MtGox is not liable because bitcoins aren't money (i.e. nothing real was lost).
1. Re:Interesting parallel by Anonymous Coward · 2014-03-12 04:56 · Score: 2, Informative
  
  But in America, if it has value, it can be seized.
2. Re:Interesting parallel by Lendrick · 2014-03-12 05:00 · Score: 5, Interesting
  
  It would be a delicious irony if people were able to recover some of their lost value due to government regulations.
3. Re:Interesting parallel by Sockatume · 2014-03-12 05:03 · Score: 2
  
  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.
  
  --
  No kidding!!! What do you say at this point?
4. Re:Interesting parallel by pla · 2014-03-12 05:05 · Score: 4, Interesting
  
  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?
5. Re:Interesting parallel by Sockatume · 2014-03-12 05:07 · Score: 2
  
  Japanese law begs to differ; it does distinguish between currency (however they define it) and other tokens.
  
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  No kidding!!! What do you say at this point?
6. Re:Interesting parallel by JDG1980 · 2014-03-12 05:10 · Score: 3, Insightful
  
  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.
7. Re:Interesting parallel by JDG1980 · 2014-03-12 05:12 · Score: 2
  
  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?
8. Re:Interesting parallel by lgw · 2014-03-12 05:16 · Score: 2, Insightful
  
  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!
  
  --
  Socialism: a lie told by totalitarians and believed by fools.
9. Re:Interesting parallel by PRMan · 2014-03-12 05:27 · Score: 4, Informative
  
  And their logo is a chart in the shape of mountains. They have adopted Mt. Gox as their official name long ago.
  
  --
  Peter predicted that you would "deliberately forget" creation 2000 years ago...
10. Re:Interesting parallel by JcMorin · 2014-03-12 05:28 · Score: 3, Interesting
  
  The government did seize twice 5 millions in cash from Mt. Gox banks account. Giving back this money would be a good start.
11. Re:Interesting parallel by Bob9113 · 2014-03-12 05:44 · Score: 4, Informative
  
  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.
  
  --
  Stop-Prism.org: Opt Out of Surveillance
12. Re:Interesting parallel by ackthpt · 2014-03-12 05:47 · Score: 4, Funny
  
  But in America, if it has value, it can be seized.
  If it has value it can be embezzled.
  
  --
  
  A feeling of having made the same mistake before: Deja Foobar
13. Re:Interesting parallel by arth1 · 2014-03-12 05:53 · Score: 4, Insightful
  
  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..."?
14. Re:Interesting parallel by BasilBrush · 2014-03-12 06:17 · Score: 3, Informative
  
  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.
15. Re:Interesting parallel by Shoten · 2014-03-12 06:20 · Score: 2
  
  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.
  
  --
  
  For your security, this post has been encrypted with ROT-13, twice.
16. Re:Interesting parallel by Applehu+Akbar · 2014-03-12 07:57 · Score: 2
  
  Having once lived in Japan, i've been kicking myself for not having climbed Mt. Gox before those tourists trampled all over it.
good move by globaljustin · 2014-03-12 04:52 · Score: 3, Interesting

MtGox has had this coming. They need to provide answers.
I don't see this as anything other than routing criminal proceedings.

--
Thank you Dave Raggett
1. Re:good move by Registered+Coward+v2 · 2014-03-12 05:03 · Score: 3, Informative
  
  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.
  
  --
  I'm a consultant - I convert gibberish into cash-flow.
2. Re:good move by PRMan · 2014-03-12 05:28 · Score: 3, Interesting
  
  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).
  
  --
  Peter predicted that you would "deliberately forget" creation 2000 years ago...
3. Re:good move by Comrade+Ogilvy · 2014-03-12 06:22 · Score: 2
  
  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.
4. Re:good move by JDG1980 · 2014-03-12 06:59 · Score: 3, Informative
  
  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.
Parallels! by Thanshin · 2014-03-12 04:56 · Score: 5, Funny

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.
1. Re:Parallels! by Sockatume · 2014-03-12 05:08 · Score: 4, Funny
  
  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.
  
  --
  No kidding!!! What do you say at this point?
Oh So NOW you want regulation eh? by bobbied · 2014-03-12 05:05 · Score: 4, Interesting

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.

--
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
1. Re:Oh So NOW you want regulation eh? by Sockatume · 2014-03-12 05:10 · Score: 4, Insightful
  
  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.
  
  --
  No kidding!!! What do you say at this point?
A test of the principles by Rinisari · 2014-03-12 05:08 · Score: 4, Interesting

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.

--
Colin Dean Go a year without DRM
1. Re:A test of the principles by JDG1980 · 2014-03-12 05:22 · Score: 3, Insightful
  
  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:I don't think for a second that Karpelès s by JDG1980 · 2014-03-12 05:16 · Score: 4, Insightful

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.
ROFL by benjfowler · 2014-03-12 05:22 · Score: 2

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??
When did bitcoin become money? by mmell · 2014-03-12 06:26 · Score: 2

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 . . .