Bitcoin Forum

This is very interesting. He claims he bought 250,000 bitcoins for .01 each, and he is not a hacker.
Someone sold 500,000 bitcoins at once, from one account that may have been hacked.

Problems are arising with mt gox story.

Mt Gox wants to rollback, but of course Kevin is against it.
Mt gox claims someone hacked into account A, then sold off coins, then tried to buy them back. Apparently Kevin beat them to it.

But Mt Gox claims different. ?? ???

Hold on to your butts.  ;D

Shouldnt the price rise as he buys more BTC?

He bought them at the lowest point,. and he had $3000 to invest already in mt gox. If the sells outweight the buys, he get's to buy as many as he likes until they are all bought up.

Someone sold 550k coins.

Kevin Day had a very old bid of a unknown (But very high amount) of coins at 0.01

about 250k of the coins being sold cleared the bid book.

Then 261k went to Kevin Day (or whoever is the "lucky" guy)

The guy that sold 550k coins, threw a buy order back, bought at 10 USD, and withdrew those coins (1000 USD in BTC was stolen, thus 100 BTC).

MtGox will roll back the fraudulent transaction, because it is fraudulent.


So, no, Kevin Day is not millionaire. But he will have some story to tell his grandchildren one day.



So, neither of them are lying.

And Kevin Day must return the stuff, or he is liable of receiving several million USD of stolen goods, that will throw him squarely into felony in several countries, and I am sure is better to be millionaire for a day and then poor, than to be a arrested millionaire for several years that will have to pay a millionaire fine. (and thus will be poor again anyway)

Damn I hope he got out with them before the market closed..

does it matter?
even if "Kevin" sues he has no chance.

we already knew that there was mass selling and the price fell to 0.01. I fail to see the news.
news would be if there was a large BTC withdrawal.
given that "Kevin" is against the rollback, I assume he did not withdraw anything.

Of course they are being rolled back. Every exchange has and will continue to break trades like this..they all have rules about 'clearly erroneous' trades.

NYSE, Nasdaq - all of them have broken trades and will do so again. This is super standard, but I guess people not used to trading other assets on exchanges would not understand this.

HAHA, a FELONY!

LOL...

Oh god my heart is aflutter with joy at how fun this forum has been today.

Priceless. I love you all.

cool story bro.


screenshots or it didn't happen?

I was a strong rollback supporter, but with a question.
Why does MtGox really want to rollback? What does MtGox actually gain from helping the one big fat cat?
Less chance of one serious lawsuit?
Can some help answer/speculate?

Awesome.  What this place has been in dire need of for the last day or so is more conspiracy theory threads.

Kevin sounds more or less reasonable.  He wishes he could keep the coins, but I think he knows he shouldn't, and can't.

My opinion of Bruce has dipped even lower than it was yesterday when he started spamming all of the threads.  His latest spam was very poorly worded, largely to get people to watch the show.  Screaming $5 million when talking about a $2500 purchase is the type of slimy self promotion that makes my skin crawl.

But the show is interesting.  I hate to say it, but he could someday become a good interviewer.

Certainly is entertaining :)

The fact people can't put 2+2 together continues to amaze me, likely will forever.  Sigh.

MtGox has to return the stolen money (since now we know it was sorta their fault... at least, the auditor guy fault).

They can:

a) rollback everything and cover the few withdrawn BTCs by random people.
b) Pull 550k BTC from nowhere to return to the guy.



What of these 2 you think is easier to do?

I would prefer MtGox to honor its contracts and pay the dues for its own errors or hold whoever caused this accountable for the loss.

Some company needs to be liable and fail. Failure is essential for the future at large.

Which one big fat cat are you referring to?  Rule of Law?  Or the entire bitcoin community?

Or do you really think that the only person (or people) hurt by this was the one guy (or several guys) that had their accounts liquidated?

Has the actual existence of said "fat cat" actually have been confirmed?

If not.. why do you assume this to be a truth?

Can you specify what those contracts state please?

it's a misdemeanor class A to even log into somebodies account that does not belong to you.  Once you pass the $1500 mark of financial damage, you get into felony territory.

source : personal experience.

Kevin was just interviewed by Bruce on the bitcoin show a few minutes ago.

We are getting much closer:
MtGox has to return the stolen money...

Strong passwords are difficult or near impossible to crack(?), so the fat cat is a "dummy" (his money is gone & MtGox not clearly at fault (?)) and all the lucky little people should win.*

*I support the rollback, and always did, so never mind, but thanks for the answer.

Read my thread about bringing bitcoins to court.

They have no intrinsic value, and aren't backed by any authority.

They are fucking worthless in the eyes of the Law.

Period.

If I take a giant shit in a coffee can and 500 people are all clamoring to give me $10,000 for it and I split it up amongst them, and then someone gets some of my warm excrement stolen from them, is a court going to award them compensation?

Why not?  Because my hot, steaming excrement isn't currency?  Well I've got 500 people sniffing my shit lined up to tell you otherwise, and they want their goddamn trades reversed or else there's class action on the way!

LOL...

You people are great.  I love you.

How is me placing a buy order for a penny a few weeks (months?) ago logging into someone elses account and committing a felony?

Get a grip.

The problem here is *NOT* the "stolen" (no proof of this!) funds at all, those will be returned as it's simply the right thing to do.  However, why the lack of transparency (to ANY parties involved)?

What about all the people who panic'ed, and sold for a penny legitimately?  Should they be bailed out too?

My concern is with the above question, and I understand there is definitely room for reasonable minds to disagree on that point.

You are probably correct. The theft is only valued relatively, not exactly. Substantiating the true value would be next to impossible. Only thing that can happen, would be bitcoins returned to their rightful owner, and with the anonymity factor, it's pretty much impossible.

Oh, please do(!) go there, as I asked in another thread:
MtGox has the $1,000/day limit to withdraw, so...
Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?
^^^
I need to find the other thread and see if anyone finally gave a decent answer to this question.
Any takers want to try, please?   :D

Did you all miss one valid point? Kevin Day or whoever this person is may have been involved in the hack and this is his way of getting the funds out.

I dont trust this shit for a second. Yes, play the victom. Thats the easiest way to hide under the radar you scum.

http://www.blogcdn.com/walletpop.co.uk/media/2009/05/bankerrordw.jpg
Id be very upset if I was Kevin Day, from the story it seems he made a bid and it was accepted due to no fault of his own.

You really don't know who kevin day is?  And you're speculating he's behind this?  I generally don't flame people on boards, but do some research and ask some folks who are "in the know" before you post idiotic statements.

People on both sides are hurting kjj, and the entire thing smells fishy to me. If possible please answer my question above in bold red, thanks.

There are previous court cases all over the world of people winning lawsuits against thieves that stole virtual currency from several systems and items.

It does not matter if bitcoin is not legal tender. It is NOT worthless in the eyes of the law, any decent lawyer can prove that bitcoins are worth whatever people are paying for them, and thus if the lawyer show to the judge that BTC was worth 17.5 when the theft happened, the judge WILL understand that BTC was worth 17.5 and thus the value stolen was 17.5 * 550k, and that one person, Kevin, received 261k * 17.5 USD worth in goods, and knowing that it was given to him accidentally during a heist, he decided to keep it.

Thus, if someone (or even the government itself) sue Kevin for keeping the BTC, he will be charged for receiving 4 567 500 worth of stolen virtual goods. Like if he kept stolen WoW gold, or linden dollars, or a sword of 1000 truths, or facebook credits, or Ragnarok Online account, or whatever else that exists over internet and people actively trade.

Any one person holding that much makes me nervous.  ... I am talking about the 500K.

Finally, an honest thief.  I just hate it when the hackers get loads of bitcoins.

Asked:


And answered:


Hint: it would take many years.

Oh go blow a fat goat and please come to the rescue of your buddy why dont you.

I assume Kevin Day is the one holding the BATLIGHT when in need.

Go scam someone else or just stfu, this is way to convenient. Yes of couse he had an open order of >250k at exactly the right low price so that he would buy it all up.

Troll troll troll along in the rain.

There cannot be a felony unless you can prove that there was theft. As BTCs have no legal status, they are unregulated and therefore not subject to theft. The best you could get away with is to claim hacking laws (e.g. Convention on Cybercrime).

There is a good argument to be made that BTCs are illegal in several countries, so good luck trying to get law enforcement involved.

I guess you could call it a "Millionair for a minute"

Oh...oh, well...

I stand totally corrected.

Shit, do you think the statute of limitations on all the FLOOZ that got stolen from me when they were hot is past?

Fuck, I need to call my lawyer...

OH SNAP, I could probably sue for my hacked FARMVILLE account too!  All my cows were worth THOUSANDS on the open Farmville market!

Thanks bro, I will let you know how this goes. I'm out for justice.

You are so wrong, there is something as common law. You dont need a court to decide if an unregulated item is flagged as theft or not.

In this case, this whole forum and bitcoin involved users know what happened was theft and the coins that got moves were stolen coins thus it is labelled as theft, simple as that.

If you want to trial it in court and have any leg to stand on then sure you would need to go by the law of the land but atm this is an online "trial" and we know the verdict clear and simple.

Again: Stuff do not need legal status to be named as "stuff"

Bitcoins exist. That is what matter to a judge if you claim your bitcoins were stolen.


Like I said, there are legal precents, even for non-currency things (there are at least one case that I know of someone being charged for stealing a sword in WoW without using in-game means)

Or you could do some research.  Easier to flame on a message board I guess :)  To each his own.

Even a large number of people on both sides is trivial in comparison to the harm to the community, and to the rule of law.

Stolen goods are not the legitimate property of their holder, even if they were not involved in the theft.  A rollback is the only real option here.

Got nothing to do with what is easier/where its easier to flame.

You approached it as if everyone should know who this person is, stop kidding yourself, he is clearly not that big a deal but perhaps to you personally he is some solid gold god.

I dont know the guy, and Im sure shitload other people dont thereby I cant ignore the fact that he could be involved in this.

Here is my paranoid concerns.

Who had 500,000 coins in one account?

Mt Gox is likely to have, but not many others.

Either the bitcoins could have been pulled from many accounts, then dumped, then bought back up by another account owned and controlled by Mt Gox, all the while Mt Gox is doing it behind the scenes....

or

Mt Gox hacks an innocent users account, to drop all them on the market for one of Mt Gox's accounts to them buy them all up.

I'm leaning towards the thoughts of an inside job.

Maybe Kevin is the one who caused the selloff or maybe Kevin just beat them to the buyback.

 

What contracts would those be? I could make a strong legal argument that there is no contract involved at all. Mtgox doesn't have a click-wrap agreement when signing up, the site has no Terms and Conditions, and you cannot contract with illegal goods or services. For example, in countries where prostitution is illegal you cannot go to the police if the prostitute did not fulfil her part of the deal :)


Moral liability? Sure! Legal liability? Afraid not. One drawback of operating in the libertarian utopia is that at the moment the law does not apply to Bitcoins.

If a car was stolen, then sold, the car would still be seized, even if the buyer is innocent. Maybe that's not the best analogy but I think Mt Gox is doing the right thing. We don't really know who Kevin Day is.

But surely the $1000/day limit is a security measure to protect against exactly what happened on Sun/Mon and nothing more? With prior arrangement with MagicalTux I am fairly certain you could withdraw the lot.

In fact I am fairly sure the law (in the UK certainly - which yes, I know doesn't apply to Mtgox, it's slightly hypothetical) would be on your side with this one and that Mtgox/a.n.other.exchange could not hold onto the btc/usd, particularly when they don't have a daily pay-in limit.

Again I pose this question - has the actual existence of this person who got stolen from been confirmed?  Why is everyone assuming this to be the case?

A simple question.  Why has it not been answered?

As I have stated previously, no matter if mtgox or kevin does it, any stolen coins would be returned.  I know that's not a given to everyone here as it's an anonymous Internet message board, but assume that is the case for sake of this argument.

What about the *NOT* stolen legitimate trades?  I assume the community opinion is that these trades would not have happened had the panic of the errant sell order been placed, and thus a full market rollback is the appropriate response?

I'm not saying I disagree with that course of action at all, I'm saying I want some more very simple information which has been strangely non-forthcoming.

Ive seen many incorrect casino jackpots being triggered when I worked in the security department at the casino nearby and I can tell you hearts dropped as their jackpot got nullified due to technical computer error.

This doesnt exclude the point here, a false payment must be rectified even if it does hurt the person who had something to gained from it, be it via proper/improper methods.

This Kevin person is not the hacker, he just placed an order. You are confusing two different things.

The original hacker surely could go to jail under hacking criminal offences though.

No, perhaps I wasn't clear enough.
Name one old-miner or early investor who is stupid enough to place 250,000 coins in an account on an online exchange?
Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?

No I did not, although I can see how my comment was interpreted that way.  My intent was to tell you to do some basic research on someone before you call them a criminal.  Words exist forever on the Internet.  If you did do research and came to this conclusion anyways, then I apologize.  You are welcome to your opinion.

And, I am in no way a close friend of Kevin's at all - I simply mostly know of him having worked in similar industries.  In certain circles he is well-regarded, thus, do some research and your opinion of him (and very likely the entire situation) may change a little was what I was getting at.

-Phil

Edit: formatting

When the market dip started, the effect during and after(until close of market) was related to the movement of the stolen coins pushing market down to 0.01

All trades since the start of shitstorm market collapse until close of market is a direct result of the hacked coins being sold. Its all part of the chain and you cant exclude any other transactions during this period because they are all a result of the former.

This isnt higher grade stuff to understand, what is in this for you ? It really seems like you are playing the cards for this random Kevin Day guy and why would that be ?

Note: the 1000 USD withdraw is there because of law, not MtGox security.

Several countries have withdraw limits for several reasons (security among them).

In US for example, the withdraw limit is enforced with anonymity: Ie: You can create anonymous bank accounts and withdraw in a anonymous manner, as long it is 1000 USD or less.

MtGox to release more than 1000 USD to a US citizen, has to ask him to fill some indentification formularies as the law requires.


We are not in a lawless land as some people think.

This whole setup is way to convenient and the money involved is potentially a lifetime payout thus I disregard most if not all peoples integrity when it comes to these situations.

Ive seen way more personal reputable people in the casino industry taking their shots at the bank when you least expect it. Humans are a different kind of animal and money is their favourite snack.

A class action suit may permit discovery -- which would either confirm or deny MtGox's official 'auditor' story.

And you are most likely wrong about them being worthless in the eyes of the law.  They're simply a commodity that exists in digital form only.  They'd be treated as such by the courts.  The courts would see the fact that there is a market for them, and would view them based on their value on the market(s).

Rollback = Winner!
I always felt that way, and it's good to see a healthy debate.

Yes this is still a huge question. I find it hard to believe it was any one account, thus insinuating that hackers did actually have access to the MTG database.

Kevin looks very honest and sincere to me. I kind of feel bad for him, actually. He just happened to be at the right place at the right time, and had awesome timing and smarts to be trading when it all happened.

smarts? My understanding is that he had early standing buy orders for 0.01 ? How is that smarts or good timing?

He was probably, if honest, just hoping something like this might happen and then he could snatch it up.

Not this shit again...

The transaction was illegitimate. Get over it already.

These are mostly not considered theft, but hacking. E.g. lots of countries have signed up to the Cybercrime Convention, which criminalises unauthorised access to an account.

Theft of virtual currencies are entirely a different matter, AFAIK, only Korea has come remotely close to recognise it as theft.


Criminal law doesn't work like that, vlaue is not the only way to determine criminality. People pay for drugs all the time, they have value, but you cannot go to court to have your busted drug deal enforced. Bitcoins could be illegal, so you could not even argue this in court.


You have to distinguish between civil and criminal law. I do not see any sort of legal action against Kevin, he just placed an order. Prosecutors could pursue the original hacker though.

<-- bbit  ;D

That's "smart" in my book.

If you completely believe the official MtGox story without any verification (to me, things do NOT add up, and extremely basic reasonable information being requested by the direct parties involved has NOT been forthcoming at all), then you are absolutely correct that a rollback is very likely the most reasonable and least-harmful action.

I'm saying I smell a rat.  And I do not believe it is Kevin at all.

Debate is good :)

They can't, 500kBTC*17.5USD is a huge chunk of change.  They can't just refund the guy the money from some magical account as a good faith measure to the people who bought his stolen bitcoins.  They only place to get the money is reverse the transactions.  Which, luckily they can since most of it was internal.

Do you trade? Did you look at the trading when all went to shit?

You would not ask these questions if you were indeed live trading at the time, I was.

And it was as clear as "humans needing water to live" that an account was hacked, price was dropped down as fast as possible to 0.01 per BTC

There isnt any more evidence needed for this, it happened, there is abundance of proof and this is verifiable by alot of people who were here at the time commenting on it aswell as on irc.

What exactly do you think is being hide? dont you believe this guy bought stolen bitcoins that was part of the 0.01 sell-off ? If this is your position then I will simply have to point out too you that you may be completely disorientated.

Last night, on the bitcion show, Adam from Mt Gox stated that they held all the bitcoins in accounts spread out, and off site.

Then, later on, when answering the question about the 432,000 bitcoin move recorded on a block, he claimed that was Mt Gox moving it's account of bitcoins off site to be safer.

Now, maybe I got something wrong or misheard this, but it appears to be completely contradictory.

Were the bitcoins held by Mt Gox on site or off site?
In one account or in many?

They have not answered this 100% to my satisfaction.

Yes.  Bitcoins could be illegal.  And if they were illegal, no court would bother hearing your case.  But they aren't.

Not every coutry is covered by common law. On the contrary, most countries in the world fall under civil law systems, where the law is strictly codified. So first you have to determine jurisdiction. Mt.gox is in Japan (not a Common Law country). Moreover, common law is not unlimited, you have to establish either the existence of a tort (or delict, depending on jurisdiction), or the existence of common law fraud. I cannot think of any circumstance in which these would apply to this case.


Theft has a very clear definition in law. Generally, you cannot steal intangible goods. In the case of currency, there is indeed theft of legal currency, even in electronic format. However, BTCs are operating in a legal void, not only that, they may even be illegal in the eyes of the law. So you cannot steal illegal items.


What is this online trial crap? Really, you can scream and write as many angry posts as you want, that will not get the coins back.

Yeah but are they Legal?

By what law?

You're usually right, please inform us.

Yes lemonginger, this is still a huge question:


Not quite, IMO.
...thus insinuating that the CIA/NSA intentionally crashed the market, and/or were planning to?




@ anyone still open:
Name one old-miner or early investor who is stupid enough to place 250,000 coins in an account on an online exchange?
Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?

They do, sorry, but I'm a lawyer.


And these were not theft cases, they were hacking cases. Two very different things.

I think you are refering to commonwealth law?

Common law is direct result of the common people view and is usually seen in small to midsize communities(mostly small)

I am not refering to a legal position such as commonwealth law.

lmao at the screaming to get coins back, I never asked such a thing. I simply made my point clear that whatever happens to this would be dealt with online and wont move beyond that.

Title should read "Kevin Day, attempted bitcoin multimillionaire from Mt Gox hacking worth nothing"

Orders made through Mt. Gox after the hack weren't legit, no matter how much you really really wish they were.

Welcome to the BTC forums, piggybank.  :)
re: Higher limits fine, OK.

I'm saying no "real person" would have ever placed that many in at once (risking losing all those coins == not likely), the withdraw part is not intended to be the main focus.
So, Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?

I'm not for or against a rollback and I do not side with Kevin or against him. I titled the thread the way I did for sensationalism. Makes it sound much more interesting than your proposal.   8)

Mt.Gox is based in Japan, I am not familiar with Japanese law, but I would be very surprised if they have the same version of class action lawsuits as the U.S. system.


I've looked into this (warning, I'm no commodities lawyer). Commodities have one legal requirement, they need to have inherent value. What is the inherent value of bitcoins?

By convention in western jurisprudence, all is legal unless specifically illegal.

There are laws against possession of drugs, so a court will not be interested in hearing a case to remedy a loss of them.

There are no similar laws against bitcoin, so a court would have to hear the case.

That's what I'm saying.

I see alot of anti-roll backers talking about how you shouldn't interfere w\ a free market.  But If MtGox doesn't reverse and in essense becomes an accomplice to the hackers, they will be liable for the damages.

Rollback is the only logical option.

Now.. .if satoshi wants to openly burn his stacks of btc, cool.

But this was clearly an illegal act and therefore mtgox has every right and every obligation to reverse it if they have the power to do so.

Why would that be a bad thing?  Heck, I wish it had been legit.  Those coins need to get out.

In the United States they are almost certainly illegal, as only the Mint and the Fed can issue currency. The FBI stated this (http://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency) about the Liberty Dollar affair: “It is a violation of federal law for individuals, or organizations, to create private coin or currency systems to compete with the official coinage and currency of the United States.”

In Europe they are certainly illegal, as only Electronic Money Institutions can issue electronic currency in accordance to the EMI Directive (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32009L0110:EN:NOT).

In most other countries, including where I am right now, the issuing of currency is monopolised by government or central banks.

I did not trade, I unfortunately (fortunately?) was out of town when this happened.  I was only being fed updates via telephone.

I guess if I had to summarize my points, they are as follows:

1) I agree the market fluctuation was due to abnormal/hacker/illegal/whatever activity.
2) I agree the market should be rolled back
3) I do not believe that an actual user account was hacked.  There is zero information to support this statement, and requests for this simple information have been strangely been ignored.
4) I believe that there is very likely some serious ass covering going on here, hiding a much larger problem with the system
5) I also believe that full disclosure is both appropriate and important here, now that the "cat is out of the bag" and the lack of it is both dissapointing and extremely concerning to me.

Shit happens.  All reasonable people know that.  I don't hate the creator of MtGox at *all* - I owe him many thanks.  However, it is quite apparent this was an amateur site that simply exploded in recent months, and they were simply unprepared for the reality of dealing with such a beast.  Simple things were missed - amateur coding on the trade engine side is apparent, etc.  No big deal at all, we all knew what we were getting into (I personally vuln tested mtgox and found a few glaring ridiculously common mistakes, but accepted that risk and modified my exposure accordingly).

However, once "shit happens" and it's obvious you are out of your depth - it's time to come clean and provide full disclosure IMO.  The fact this has not happened (and from my understanding the direct parties involved have been told it is NOT going to happen) is concerning to me, and signifies (to me, perhaps not to you) a much deeper/wider problem that would likely effect the Bitcoin market even more drastically.

This is ALL complete speculation and paranoia of course.  I have access to only slightly more information than everyone else here does.

Responding in between work tasks, so it may take awhile but I do appreciate the civil debate.  And yes, I am obviously playing devils advocate for the "other side" since it seems everyone here is just completely taking in the information fed to them as the absolute truth.

Edit: stupid spelling

you are assuming bitcoins fit the definition of a "currency".

I'm no lawyer, but I do have some background research I have done.

Bitcoins may not be defined as a "currency" or a "commodity". They may reside in a legally "grey" area for many years to come. When something is "grey", nobody is right or wrong, completely.

Bitcoins do not fall into the same category as the Liberty Dollar, I know this for sure. They also do not fit the definition of a "Alternative Currency", and like was stated previously, they do not have any set value and constantly fluctuate, so therefore the legal term of "commodity" may not apply either.

Internet itself has spawned a whole new series of cybercrimes and cyber laws that do not fit into the regular body of law. Bitcoins may need entirely new legislation as P2P regulation, instead of regulations as they apply to "currencies", "commodities" or tangible goods.

Agreed. There are more than enough laws that declare all currencies not issued by the authorised issuer as illegal. To give an example of the law where I am:

"Only the Central Bank will have the exclusive right to issue banknotes and currencies in the country. Neither the state nor any other person or entity, may issue notes, coins or other documents or certificates that can circulate as money."

The law then imposes civil and criminal sanctions for breaking the law. The same applies to the creation of new currencies everywhere in the world.

There are laws against possession of drugs, so a court will not be interested in hearing a case to remedy a loss of them.



Not specifically against Bitcoin, but against all unofficial currencies.

Once again, I reiterate, YOU ARE ASSUMING BITCOINS FIT THE DEFINITION OF A CURRENCY.
They are not necessarily a "currency" legally. I do not believe they are.

A legal definition of currency is a generally accepted medium of exchange for goods and services. Most legal definitions require that a currency must be accepted as means of payment by a party other than the issuer.

Bitcoin fits this definition. Moreover, it advertises itself as a currency.


Bitcoins may not be defined as a "currency" or a "commodity". They may reside in a legally "grey" area for many years to come. When something is "grey", nobody is right or wrong, completely.

I am lawyer  ;D They are certainly a currency in my view, but not a commodity or a security.


This is often not true, you would be surprised of how many laws apply neatly to most Internet phenomena. In fact, there have been very few instances that I have seen something online that truly does not fit an existing legal category. Phishing was initially in a bit of a grey area in some countries, but in Common Law systems it fell under common law fraud. Non-commercial file-sharing was also briefly in a bit of a grey area in some countries (particularly in Europe), but this was later plugged.

Bitcoin in my opinion is clearly a currency, and if it is, then it is illegal.

I thought lawyers were supposed to do research before running their mouths.

You quote anti-counterfeiting laws, when you should instead have dusted off your copy of Black's and looked into money, currency and current money.  Bitcoin is neither a banknote, nor a currency, as so defined, and makes no claims to be either.

To be sure, we talk informally on these forums, and toss around the terms "money" and "currency" with wild abandon.  Our informal words don't change the reality of the situation, nor their legal status.

Bitcoin is even better, since there is no such thing that anyone can point to, not even an abstract concept, and say "This is a bitcoin".  What we are really doing when we "send bitcoins" to others is transferring an interest, another word you have forgotten since law school.

And I can assure you that the courts have been dealing with intangible interests for hundreds of years, and have no problem with the idea.

You stupid

Dumbfuck.

From the FAQ:

"Bitcoins are the unit of currency of the Bitcoin system."

lol, this is fucking hilarious, HI-FUCKING-LARIOUS...!!!

ZOMGBITCOINSFORAPENNY!!1!11!!11!11!SURELYNOTHING'SUP,THISLOOKSTOTALLYLEGITIMATE!!!!1!11!!!!ZOMGI'MRICH!!!11!!!1!!1!!!

lol...

someone steal Kevin's car and sell it to me for $100, that'd be totally legit as well because I didn't steal it, right...? right Kevin...? lol

and to all you that think you'll just simply go to TradeHill because "they don't have this rollback bullshit"...think again, the cat's out of the bag, ALL the exchanges will have rollbacks now, ALL OF THEM, if they don't then guess who the next hacker target will be...?

Are you going somewhere with this?  Did you miss the part about informal speech using common words not changing the legal reality?

Whoever wrote the FAQ is only adding their own definition, even if Satoshi himself wrote it, it does not alter it's position within law, which is NOT defined as a "currency" no more than shoelaces would be currency in jail.

From the FAQ:

"Bitcoins have value because they are accepted as payment by many. See the list of Bitcoin-accepting sites.

When we say that a currency is backed up by gold, we mean that there's a promise in place that you can exchange the currency for gold. In a sense, you could say that Bitcoin is "backed up" by the price tags of merchants – a price tag is a promise to exchange goods for a specified amount of currency."

Are you going to keep shoving your thumb up your ass or be quiet now.

You said bitcoins were never ADVERTISED as a currency.

Now sit down.

Exactly!
lol, We both posted the same response at the same time.

You will have to show me that you have a legal definition of currency that is different from what Bitcoin does. It acts like a currency, it advertises itself as a currency, ergo it is a currency.

HAHA,

You're like the ambiguously gay duo of stupidity!

Congrats!

hahaha, this is hilarious...

Bitcoins do not advertise themselves!!!  WAKE UP!

too much!  way too fucking funny!

HAHA, wow, looks like your TOTALLY right about that.

Gosh, everything on bitcoin.org must just be a bunch of random words typed by an infinite set of monkeys at typewriters!

I admit defeat!

You are the superior being!

An interesting tid bit.  I know the btc community is spread out, but also that alot of us yanks are in the united states.  So of you just log in to snoop and do nothing wrong.. class B misdemeanor.  Up to 1500 damages, class A misdameanor.  More than 1500 = Felony.

It may be for the lulz but I'm just trying to point out to people that it is still a crime even if you're in your moms basement hammering away on your keyboard late at night cracking peoples passwords and stealing their btc.

How about the definition in Black's?


Also, I find it humorous that you think that bitcoins, which don't exist even in the abstract, advertise themselves.

And since bitcoins effectively hold INFINITE value, the penalty is actually escalated to Gilgul, which is the execution of one's soul.

Bitcoin is serious business.

Good thing I happen to have my Blacks Law 4th ed right here...

Currency. Coined Money and such banknotes or other paper money as are authorized by law and do in fatc circulate from hand to hand as a medium of exchange.

Bitcoins are not coined money
Bitcoins are not banknotes
Bitcoins are not authorized by law
Bitcoins do not circulate from hand to hand

What more do you want? My bill for legal counsel?

No, not because the argument can't be made but rather that your standard of evidence is undisclosed and either arbitrary or pretty subjective.  So regardless of how plausible the argument you can always claim it's insufficient.  That's all fine and good if all you want is to bolster your confidence in your own opinion but it doesn't really help you figure out the truth.

kjj, you are freaking me out. We are both typing the same thing at the same time. I posted my post about Blacks in synchro with you, once again.  8)

North Fork, CA developed it's own "currency" earlier this year and isn't facing any kind of legal pressure to shut it down.

They are called North Fork Shares and are worth $12 each

http://articles.latimes.com/2011/jan/15/business/la-fi-local-currency-20110115

Ha!  I saw that.  I'm almost done for the day, and I couldn't resist the temptation to waste a few minutes feeding the trolls.  I was showing some of the alleged lawyer's posts to the local circuit judge, and he was howling with laughter.

Oh haha.

Give the good Judge our regards!

There are almost 100 or more "alternative currencies" currently circulating with ZERO legal problems.

It's when you create a currency, and try to convince people to take it as "dollars". That's why the Liberty Dollar had problems.

The Justice Department claimed it was a form of terrorism to create a currency to "try to destroy or replace the dollar".

You have a nasty disposition Synaptic. You don't come here to make friends, do you? Maybe at least you'll learn something.

I am your friend.

Only friends will go out on a limb to correct your errors.

No.
I don't need standards of evidence to ask a question*, now do I?
*The question is based on what we are currently told about the melt-down.

Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?

Currency is 'legal tender'.
 
BitCoin is not legitimate and legal currency according to the US legal tender laws.

Only the government has the right to 'Coin Money'.

I am sure there are similar statutes in most nations.

It is a medium for exchange and has close ties to currency. In a historical sense it is a currency, just not a legal one I dont think.

That said, stolen bitcoins can be valued. Acts were comitted to deprive the rightful owners of property, whether virtual or physical is not significant. Take a look at the second life lawsuits and judgements about virtual property and the valuation thereof.

Please try to be a little less stupid. Clearly your post isn't *SIMPLY* about asking a question.  What you want is someone to "finally give you a decent answer" to said question.  I'm just pointing out the rather obvious fact that it's more than a little difficult to give you a "decent answer" when there's no definition as to what objective and non-arbitrary criteria would make a "decent" answer to you.  It also leaves you with the ability to worm your way out of calling any answer "decent" when all the cards aren't on the table.

Hi jgraham,
I had edited my post, perhaps if you had seen the edit you wouldn't be such a rude, obvious a-hole of a troll?   :P



No.
I don't need standards of evidence to ask a question*, now do I?
*The question is based on what we are currently told about the melt-down.

Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?

I am being respectful and trying to keep a civil tone, I would very much appreciate if you did the same.


Black's? Really? You do know that Black's is simply used for basic definitions, right? It is mostly used in law school. I don't even know where my copy is! If I remember my days from law school correctly, he may even have used Bouvier's own outdated definition of currency as "The money which passes, at a fixed value, from hand to hand; money which is authorized by law."  

Nowadays currency is recognised as a generally accepted exchange of value, this arises from Friedman and Schwartz famous paper, "The Definition of Money: Net Wealth and Neutrality as Criteria Journal of Money", Credit and Banking, Vol. 1, No. 1, Feb., 1969. I would also refer you to this definition in Ellinger, Lomicka and Hooley's "Modern Banking Law", Oxford Univeristy Press, 2002, p.362.


They can be used legally as proof of intent. Bitcoin calls itself a P2P currency, it fulfils the actions of money, namely, it is value exchanged by parties other than the issuer for goods and services.


Please, could you leave the snarky ad homs? You really want to use the intangible explanation? Really? By that argument, there is no such thing as an EFTPOS because you cannot point to a thing being transferred. There are no funds transfers from bank accounts because no physical bills and coins are being exchanged.


Interest? Legally interest is nothing more than a payment on balances maintained in an account. Can you please explain how the entire system of interest works on Bitcoin? Who holds the balance? Who pays out the interest? How is it calculated?

I don't really know what you're talking about.
I'm really just responding to the dumb and self-important way you framed your question.  Also pointing out why you have no sufficient answers and why what you're doing is more silly posturing than actual inquiry.

You are missing the point, the article is telling you exactly what currency is. It is something that circulates from hand to hand as a medium of exchange. Blacks goes farther and defines LEGAL CURRENCY as CURRENCY, hence the addition of the requirement of it being coined by the MINT or issued by the Fed and recognised by law.

I repeat, legally, all over the world, currency is a means of exchange that is accepted for payment for goods and services. This is what Bitcoin does.

It's quite likely that whatever password was cracked would've been more than strong enough had Mt Gox not royally screwed up by losing a copy of their password database and failing to notice for several days. Creating passwords that are brute-force proof once someone's leaked the hash isn't very practical these days as the resulting passwords are too long to remember, especially if you're using different passwords for each site. This is even more true if it was an older password because Mt Gox foolishly stored those as unsalted MD5.

Because they bought them or put them there some time ago in or prior to the 10,000 BTC pizza era and haven't managed to get them out since due to the withdrawal limit? They may not even have logged into Mt Tux or used bitcoins in a long time, for all you know. In fact, given that older passwords are significantly easier to crack than newer ones, it's quite likely that whoever this is hasn't been back in a while.

(The other use for large sums like that is, of course, stabilising the market.)

Also, I'm amused by the sudden outbreak of hate for the Bitcoin super-rich.

So, anyone who disagrees with Bitcoin in these parts is a troll, right?

By the mention of Black's and circuit judges I assume that you are in the U.S. You do know that the world is much larger than that, right? (HINT: I'm not a U.S. lawyer).

I'm really disappointed, I was really looking forward to having a civil discussion here.

Drugs serve this purpose also, and fit the definition then. Are drugs currency?

No, drugs are a commodity  :D

Commodities can be used as means of exchange in barter or through exchanges, but they are not currency in the legal sense. Usually, we define them as symbolic value imprinted in a coin, paper, or electronic medium (read the definition of electronic money in the European Directives for example).

I really recommend Friedman's article I cited earlier.

holy ####! all other virtual and non virtual currencies not issued by some governments must be illegal

lets shut down any site using any sort of credits and tokens, they are clearly have no right to assign you their currencies in exchange for a government issued money, lets start with FB and WOW for starters
lets go after anyone doing any trades and any barters not made in fiat currencies
lets shut down all casinos and gambling sites for playing and exchanging chips for money
and lastly lets shutdown communities using their own currencies (there is another town in US using own currency other than what was mentioned earlier in this thread)

MyGox almost certainly did not exist during the 10,000 BTC pizza era.
If you actually believe the words you typed AND you honestly think that I showed any hate for the Bitcoin super-rich, then there is nothing more I could possibly want to talk to you about. Enjoy your day makomk.




  :D :D :D :D :D :D :D :D :D :D :D :D


@Anyone else

1) This question is important.
2) This question is unanswered.*
3) This question is for people who do not put words in my mouth or falsely accuse me.
4) It is based on what we are being told about the meltdown, so I do not need to provide evidence.


To be clear: *Unanswered = Actually, someone helped verify it is an important question, and someone else said "the crash was a great thing" (or very similar)

Why would any real person keep over 250,000 coins (or 500,000 ?) in an account unless they were setting up to intentionally crash the market?

Fixed it for you.

Fail.
Any rational answer will do. Any answer other than setting up to crash the market. Can anyone else provide an answer?

You are indeed, and I usually don't default to that mode.  Don't take it personally.


The legal definitions of currency keep coming back to "authorized by law", which makes the law you quoted against issuing currency a law against counterfeiting.


Bitcoin calls itself nothing.  It has no voice, and it has no inscription.  Promoters of bitcoin make various claims, but so far I haven't seen anyone make any claims that would get them into trouble with counterfeiting laws.  Please observe that if you think bitcoin is illegal because it is "value exchanged by parties other than the issuer for goods and services", then barter is illegal in your world, which is simply not true in any part of this world, so far as I'm aware.


You sound more like a banker than a lawyer, and I don't mean any offense by that.

When I say interest, I'm not talking about consideration paid for a debt.  I mean that a person can have an interest in something that they do not own, and that this interest can be defended in court.  An easement is a typical example.

In the bitcoin system, there is no such "a bitcoin".  Not even as an intangible good.  It is an abstraction of an abstraction.  When I say that my wallet has 10 bitcoins in it, I am speaking very informally, and very incorrectly.  What I really have is a set of cryptographic keys that I can use to prove that someone has given me control of a number by giving control of a number to someone else.  Those control relationships, and the value that I can get by using them, are my interest in the system, and at least in the US, the courts will have no problem hearing a case regarding that interest.

  There is at least 90 % chance that IF that mass of BTC was stored in ONE account - that was done intentionally,
to ruin or manipulate market.

  It looks like "hacker" got very little profit, compared to efforts. And we should hope, that this efforts was relatively high - if that was done by 12-yo school boy, or something like that (20 % chance, like i am see the situation - to high),  -  than mtgox done for sure. If profit was nothing to hacker - than it was intentional attack.

- Tin foil hat on
  Dissolving mtgox (20% chance) leaves us in situation , when Bitcoins will be thrown 1 year back in acceptance level. Bad, but not really disaster.

  Where the hacker got the money ? Hacked wallets ? Don`t think so. To much money, - that guys, that have really big sums,  know very well how to store their BTC.
Mass hack of mtgox accounts ? Very possible, it is the most possible answer. But that thing is reversible,  and mtgox can restore accounts, at least to some point in time.
Some old BTC owner died/killed/tortured/drugged  and give up his wallets ? Well, there is some probability of that. It even slightly bigger than probability, that all this mess, was a result of child play on daddy`s computer.
Some old early adopter just forgot, that sometime he mined all that BTC. Than he saw some media article about BTC - "Wow - they even got exchange now! I am a rich !"  And sold all of them out, - now he is confused - " Hm, something vent wrong..." There is a very low chance of this, but that variant is interesting, because than, no rollback should occur.

  Last, most danger, and least possible version - that`s money came from nowhere. Somebody tricked bitcoin protocol and inflate system with freshly "counterfeited" money. Well, that means the end of BTC.  This is very very unlikely. But this version should be studied first, than thrown away, because this is the only version that really damage bitcoin protocol itself.

- Tin foil hat off

Fail.  People don't always act rationally.

+500,000 BTC  :D
Based on what we currently know:
There is at least 90 % chance that IF that mass of BTC was stored in ONE account - that was done intentionally,
to ruin or manipulate market.

At this time Dobrodav has answered the important question, IMO.

How about because they stopped caring about bitcoin many months ago, and are totally unaware that their account is now worth some serious cash?

Well it is possible, and explains why his password was broken easly - it was just raw md5 hash.

Most of them are, if they meet the definition of currency, and pass themselves off as currency.


Not currency. Credit tokens are credit tokens, they are a separate legal entity covered under consumer credit contracts. WoW and other virtual currencies are not accepted as means of payment by parties other than the issuer (definition of currency). There is a black market for WoW gold, but this is illegal as currency by the very definition of Blizzard's ToC.


These are not currencies, they are commodities, they have legal definitions (and are regulated).


Chips are not currency, they are not accepted as means of payment by anyone other than the issuer.


If that community is issuing value, then it is illegal as well according to U.S. law.

Some quick Googling suggests that Mt Gox started trading bitcoins in July 2010 and the 10,000 BTC pizza offer was open until June 2010, so they don't quite overlap but they're close. Before my time though. The growth in the bitcoin-to-USD price seems to have been frankly astounding.

here is link to the story about Pittsboro town in N.C. using their own currency, this is another one from what has been mentioned about CA town earlier in the thread
http://abclocal.go.com/wtvd/story?section=news/local&id=6747829

would love to hear expert view on their legality. from my understanding they are using it since 09 and Capital One bank does USD exchange there
or is it not a real currency according to US law in your view?

I cannot speak for other countries, but I have followed the Liberty Dollar case closely.

Von Nothaus (creator of the Liberty Dollar) ran afoul of the law by making his coins confusingly similar to legal tender coins.  

Have you ever been to a theme park that passed around "Disney Dollars"?  Or an arcade that gave you 8 game tokens for a buck?  They are not violating the law any more than Bitcoins do.

I have also spoken with an attorney who specializes in commodities law.  Even he said that they're not illegal under US Law.  But if you are a merchant, and you accept them for goods/services, you must STILL PAY TAX based on the value of the thing being sold.  In other words, if you give someone a $1000 item in exchange for XX bitcoins, you will still be legally expected to report that as a $1000 sale, and pay appropriate taxes as though you took the $1000 as cash.

If mt gox only uses representations of actual bitcoins couldnt someone just add 500 000 fake bitcoins to the database and sell them thereby crashing the market ?

Yes, but again, this would be fairly easy to roll back.  A better attack would be to bleed them out slowly, and hope that no one notices.

And if the claims from gox are true, the whole point of the audit that started this fiasco was to demonstrate that the account balances in their system matched the account balances in their bitcoin wallets.

Actually, in the interview 2 nights ago, they were asked why the auditor had access to the live database.  The answer given was that it was to make sure that MtGox wasn't manipulating the displayed buy/sell prices -- and thus gaming the entire system.  

Anyone know what country this Kevin guy lives in? If it is some third world country then none of this matters he gets away with it. If it is USA then he is screwed since he admits he knew something was wrong and still attemtped to (steal) as much as he could before the the site was closed. Its like seeing someone rob a bank, drop some money on the ground while he ran away, then grabbed as much as he could before the cops came....

Which still doesn't explain why they had access to users' passwords. Pretty much all databases can control which tables a particular user is allowed to read, and even if they did need access to the other information in the user table it's trivial to set up a view with just the non-sensitive columns and only allow access via that. Basically Mt Gox screwed up big time.

Sorry for the late reply, busy day today. I'll keep it short to this point, which I think is important. Sorry if I sound like a banker, I specialise in financial law and e-commerce, hence my interest in Bitcoin, mostly from a European perspective though.

I'm interested to pursue this concept. I completely disagree that bitcoins are abstractions of an abstraction, they fulfil the meaning of an intangible good. They are created, allocated and transferred according to strict rules, encryption protocols and algorithms, 10 BTCs are 10 BTCs, the system recognises that there is such thing and it can be followed in a rather secure manner. True, these are cryptographic keys, but the keys represent an intangible good, just like the bits in a bank's server represent your account's balance. The law is perfectly fine with abstract representations of value. Nowadays, this is really what most capital is.

So, if these units of value are being used to pay for goods and services, that means that someone is pumping value into the economy in the shape of a cryptocurrency. I believe that there is a good chance that this may be deemed illegal by regulators. As of today, EFF has also its own doubts (https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin), and have decided to abandon Bitcoin.

I know EFF's lawyers will not have taken this decision lightly, they must be worried by many of the same things that worry me from a legal perspective.

Kevin did not steal anything, he completed a trade. Unless he was the hacker, he did not steal anything. We are trying to establish exactly what BTCs are, but one thing is clear, they would not be subject to theft laws.

Kevin Day, the bitcoin flash multi millionaire!