US Court Freezes Assets of Mt. Gox CEO

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.

Comments

Interesting parallel

[Anonymous Coward]

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

Re:Interesting parallel

[Lendrick]

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

Re:Interesting parallel

[pla]

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

[JDG1980]

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

[PRMan]

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

[JcMorin]

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

[Bob9113]

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

[ackthpt]

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

If it has value it can be embezzled.

Re:Interesting parallel

[arth1]

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

[BasilBrush]

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.

good move

[globaljustin]

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

[Registered Coward v2]

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

[PRMan]

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

[JDG1980]

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!

[Thanshin]

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!

[Sockatume]

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.

Oh So NOW you want regulation eh?

[bobbied]

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?

[Sockatume]

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.

A test of the principles

[Rinisari]

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

[JDG1980]

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

[JDG1980]

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.