Bitcoin Forum

The 643.2771BTC I withdrew from Mt Gox before trading was halted has been used to question my motives. To try to prove my intentions, I have moved the entire balance to an escrow account at Clearcoin:

https://clearcoin.appspot.com/status/r_H5PyEWwb5wEa8RTbrMTY8k

I cannot retrieve them for a month now. The options are:

1) I press the release button and donate them to the Bitcoin Faucet

2) The FBI accepts "Kevin logged in within 15 minutes of the attacker" as enough evidence to arrest me and seize my wallet as evidence and/or I end up convicted and the FBI buys some new socks and night lights for the whole office with the balance.

3) One month from now, when things have calmed down and I am obviously not arrested, they'll be returned to me and hopefully by then we will have determined their rightful home.

It would be an incredible show of faith if Mt Gox would volunteer to do something similar, but I'm not making this demand off them.

I think the word you're grepping for here is "Faucet."

Can you tell I've barely slept for two days? :)

Edited original post to look smarter than I am.

Petition to FREE KEVIN!!

Kevin is a class act.

Kevin : what were you suggesting mtgox could do as a show of good faith?  ( aside from be 100% honest )

Why not return them? They are just going to be subtracted from your mt gox balance anyway. Or did you not have that much before the hackcrash?

Just return them.




But tell them you have a 95% transfer fee.

Why should he, they are rightfully his

No offense, but your your word really isn't helping his case.

I Can't really see what MT can do as a similar show of faith, Except, you know, Stop dodging.

The trades are being rolled back, but withdrawals and deposits aren't. He withdrew 600+, it will be subtracted from his balance.

...more like colombian cocaine and hookers, but I digress...

Lemme see if i got this right:

With number one the money, stolen or otherwise, gets sent to charity.

With number two the money automaticly goes back to your wallet and whoever has access to it will have the choice of what to do with them


And with number 3, if all clears out, one month from now the money gets returned to the rightful owner whoever that is.



Is that it?

Yeah, seems about right.

I am heading over to the Bitcoin faceut with my sleeping bag and camp stove (and my 600 Gmail accounts).

 ;)

Correct. I can't just run off with it now, sell it or anything like that. If the coins are actually "stolen" and it's even possible for them to be considered "stolen" in a case like this, they're being held by an uninterested third party right now. I want everyone to move past this point so we can figure out what really happened in the much larger picture. Whose account actually was compromised and why, how we are going to proceed, etc.

MtGox already publicly said they wouldn't pursue you for the BTC you withdrew, but your account would be in negative balance. You should have just kept them

All said and done this seems a good move. I applaud you.

Although I am new to the community and been only a Bitcoin follower and trader for a week now I have analyzed and studied many articles and papers about Bitcoin. I follow the market closely and I have ready dozens of articles, threads, and comments relating to the Mt. Gox incident. As a web developer and using my logic my personal opinion is that Mt. Gox fucked up big time when we look at their website security and how they are handling this. Although we can't verify if the account with the 500k Bitcoins really existed or not does not matter when you look at the dispute between Mt. Gox and Kevin.

So far Kevin has done nothing wrong, just like anyone would do in this situation and tried to buy as many Bitcoins as possible for .01 cents and than tried to withdraw them as fast as possible before the market and Mt. Gox crashed. If I had 3000 dollars on my Mt. Gox account I would have done the same freaking thing. Some people argue that it's impossible that Kevin was able to place a bid after the hacking started as the website was to laggy or down. This is different for every PC and totally depends on the connection, DNS, location, server, etc. A website may be down or slower for someone than for someone else.

If is telling the truth I believe that he should be allowed to keep the Bitcoins he legally bought even if the account with the 500k Bitcoins was hacked. In a real exchange the same thing would happen. An exchange cant revert hours of trades back just because one account got hacked. No matter how much money there is on it. If Mt. Gox reverts all the traders because of this than I want to see them do the same thing when my account gets hacked and my 10 Bitcoins get sold.

You're a class act Kevin, you've been totally honest this whole time and now you've put this up to prove it. You're clearly ten times the man that MagicalTux is, the lying sack of shit who fucked us all over.

I am think that MG can do rollback. But also, i am think they can not await that somebody, will return them already withdrawn funds, - it is just stupid. It will be disappointing, if Kevin will do such a thing. MG should suffer.

Would love to hear any info from MtGox on this.  One account compromised?  With 500k BTC?  Is that the truth?

Well, I don't know other country's laws that well, but here in germany the transactions would be invalid.
MtGox would have no choice and has to do a rollback.

I'm not totally sure I know all the details in this case, but according to Swedish law (IIRC) buying something in good faith doesn't give you possession of what you bought, in case it was previously stolen.

For example, if someone comes to you and offers to sell you diamonds at a discounted price, and you buy, that doesn't mean you can keep them if it turns out they were stolen in the first place.

In this case, if I have understood this correctly, it means:

1. You did nothing wrong
2. You have to give the BTCs back to the original owner

I also think MtGox should reimburse you the money you paid for the BTC, but I'm not sure about the legal case here. In any case, it would be the only decent thing to do.

Putting the BTCs in escrow looks like an OK move right now, but I would just have handed them back right away.

Don't drop the soap  ;D

I am not sure MTGox has learned to be transparent, yet. Still, I understand the heavy load you are carrying right now, Kevin. As a solution, I would sacrifice myself to take them. Just send em to me once they get out of clearcoin  :P

to be serious: make sure they will not go after you, then donate some of the money to amnesty or an organisation of your choice and live happily ever after.

Donate money to my address. I will gladly take over all responsibility  ;D

Why do you speak lies?  Ever heard of the flash crash?  Trades are backed out all the time on global exchanges.  You are ignorant and uneducated.

Oh look, it's THIS thread again. Gonna repeat myself.

-> accident (account intrusion)
-> abnormal market (all open bids fulfilled by selling of the stolen coins)
-> transactions not legit
-> hand the withdrawed coins back

This is a sensible thing to do while the dust settles and gives MTGOX time to make a full and truthful disclosure.  Frankly they have not shown themselves trustworthy enough at this point to be sure they would return the coins to their proper owners.  I would have said 'hand them' back if it were clear that were the case but if GOX had accused me of colluding with the hacker and I was innocent I would have done the same as Kevin.

Escrew was a good move, in one month we will hopefully know all details. But right now I'm leading towards pay back, I can't find a scenario were buying at 0.05 while other markets sell at around 17 is legit...

Kevin,

This I can applaud and support fully. Well done.

I'm glad to see that Kevin is much more mature and reasonable than his supporters.

There is one fact to all of this.

MT Gox doesnt lose anything.

Why is that ?

After all, it was 100% their fault by their own admission.

Shitty security or shitty choice in who they hired to audit is irrelevent, the buck stops with MT Gox.

What if this was all an elaborate contrived ruse on MT Gox's part to skim money and bitcoins.

Yes, yes I know lots trust MT Gox, but havent we all know people we trusted that we thought were honest, for much longer periods of time than any of us have known MT Gox, just to learn they lied, cheated, deceived, and/or stole from us ?

Ex-significant others, ex-friends, associates, even that bad seed relative ...

How much documented absolute fact is known ?

none.

just throwing it out there.

Finally!  A chance to bust out my old yellow bumper stickers!

Why drag out this situation?  Basically, your only making $3000 off of keeping the stolen coins.  Doesn't make sense to ruin your reputation over such an insignificant amount that you put 0 work into getting. 

Either give them the fuck back or tell everyone to go fuck them selves.. Dragging out the situation makes no sense.  Pretty sure no one cares at this point either way.

600 accounts won't even get you 1 BTC.  ;)

I couldn't agree with this comment more.

My loyalty is for sale.  ;D
1CRcJUNAPvHYd888jLiwRZacwSQDNSFPfh

I was referring in terms of Bitcoin exchange, my bad for not making that clear. If we were to follow the Bitcoin philosophy than reverting hours of trading would go against that philosophy and that's why so many people are against the idea of changing the trades back.

Why in the seven blazes would the FBI be after you?

Serious question, what do you think they could possibly charge you with?

This is of course, assuming you are not the hacker, but if you were, you would not be here.

Really? Can you be more specific as to what law applies in this case?

That only applies to tangible goods. BTCs are an unregulated market in virtual currency, so theft laws do not apply. There was no theft, there was hacking, and Kevin was not the perpetrator.

Sounds like Kevin wasn't the only one who got a buy order in fast.

This is why gov't exist. Because people are dishonorable dicks. There doesn't need to be a law. Kevin knowingly profitted from an illegal act and has CONFESSED to suspecting the market's performance was a result of an illegal act AT THE TIME HE PUT IN HIS BUY ORDER.

There is your mens rea people.

You don't need a law to know buying what is in essence someone else property is wrong. Bitcoins are a right to a service (a nonreversible multipeer authenticated data transfer and record keeping). They don't need to be tangible.

Kevin knows in his heart  that's why he keeps trying to rationalize this.

In my opinion, this whole debate has been nothing more than a publicity stunt by Kevin who is desperately trying to paint himself as a "good guy" in hopes that he wins over the hearts of the community so they rally behind him and persuade Mt. Gox to ultimately end up letting him keep all 200,000+ bitcoins.

The 643 BTC is just a distraction. The real thing Kevin is fighting to keep (without actually coming outright and saying it) is the motherload.

I'm sorry, but Kevin just needs to accept the fact that all those bitcoins were stolen and they need to be returned to their rightful owner(s), regardless of who that owner is. That's the right thing to do, and ultimately, the decision isn't even his (since the BTC are still all in the hands of Mt. Gox).

Hehe. I am serious though. Theft has very specific connotations (warning, this discussion is about UK law, but this is typical of most systems I am familiar with). Most intangible theft, that is, money transfers, securities, etc. are classified as fraud, and that would depend on BTCs having some form of legal value. At the moment, BTCs are at best in a legal grey area. I cannot imagine that any enforcement agency would take theft (or fraud) in BTCs seriously (yet).

Hacking however is a well recognised offence, so the hacker is certainly liable regardless of Bitcoin's legal status. But Kevin would not be liable for making an exchange.

your out of your mind. There is no gray legal area.Theft of service goes way back in  law. We are all trading a right to a  service. It's not frickin complicated.

Feeling guilty about something is not mean that a crime is committed, there has to be a crime. Here there is one clear act of hacking, but we cannot establish theft yet until we determine that BTCs are even subject of theft.


Ahh, you are talking about ethical conduct. Sure, Kevin keeping the BTCs would be ethically wrong, but is it illegal? You do need a law for determining that.

Bitcoin cannot have its pie and eat it too. It wants to be a decentralised system operating outside of the law and of government's jurisdiction. To do that, its legal status has to remain clouded, otherwise you would have regulators intervening. Unless that happens, law enforcement officials will laugh and treat this as the theft of gold in WoW.

To be honest I kinda wish Kevin got away with all the coins.

For one thing, it would force Mt. Gox out of business when they had to compensate those who lost coins in the hack which I think most of us can agree is a good thing. Now that Bitcoins are actually worth a good chunk of change, it's preposterous to have the leading exchange be run by an idiot and a liar like MagicalTux.

For another, a very lucky innocent person would have received the windfall instead of a malicious hacker.

It would be a massive win/win.

Kevin: I stand to gain absolutely nothing, but I think you should get your $5m. The only person who should be punished is the person who allowed all this to happen: MagicalTux.

Kevin deserves what he gets for ruining a perfectly good PFMS community

KEVIN WE HAD A GOOD THING GOING AND YOU THREW IT ALL AWAY :(

Get your facts straight, you are talking of larceny and fraud.

Let us get the facts of the case straight so far. There was a hacking event. This is a criminal offence, no questions. The perpetrator accessed accounts (also a criminal offence), and tried to conduct a fraudulent transaction. This is where things get tricky legally. What was transferred in the eyes of the law?
- Currency? This would fall under many jurisdictions as either theft or fraud. No question about that.
- A service? Then it is larceny.
- Access to a key so that you can make a transfer of some intangible value from one ledger to another? Hacking at most.

As far as I understand, Kevin completed a transaction within the exchange, but the transaction has not really taken place (the BTCs have not been "deposited" to a wallet). If this is the case, firstly, there is no handling of stolen goods (even assuming that there is theft, which is not clear by far), so Kevin is not liable legally whatsoever.

I already established what was stolen. The right to a service. A continuous one at that because the record is kept on the network indefinitely and verified constantly.

It's no different than "digging a ditch" dollars.

I can't even believe we are having a tangibility argument in a world of nonredeemable fiat paper .

Interesting question. Who do you have the service contract with? How did this contract come into existence?

I am assuming that you have a contract, quasi-contract, or similar legal source of obligations, as you are saying that you have a right.

There was a withdrawal.
Kevin has 600 plus coins (right to a service) in escrow.
There is a saying in the law. A man can't transfer any better title  than he owns. The thief has no title. Kevin has no title.
This is not new and novel.
Kevin is willfully obstructing the lawful owner from taking possession.
Why am I explaining this?
Is it amateur hour at the Apollo in here?

Bitcoins are created by confirming a block. That is performing a service for compensation. You solve a block, the network will solve blocks you create for a "network value" of up to 50 bitcoins + fees earned in return for your work.


I see right through the contract gibberish. I don't fall for distractions. These are rights under a license.  A grant of authority. That would make it more like a trust.

I am confused, are the 600 BTCs in the Escrow the same ones that were withdrawn? My understanding is that the transaction is way bigger than that, and that not all of the BTCs were transferred before the shut down, if that is not the case, then I completely withdraw my above argument.  

However, the heart of the argument remains. It seems like there are about 6 different theories as to what Bitcoin is in the eyes of the law. I've seen it refereed to as currency (therefore, it would be an illegal currency as only governments can issue currency in most jurisdictions). I've seen it referred to as a commodity (but it is not, it does not meet the legal requirement for one). It is not a security, and it is not a service. Each one of those would carry different legal consequences.

At the moment, the best legal security for BTC is not property law, but hacking laws.

If you want something to say Kevin, you can email me and I'll post it on my site.
http://buttcoin.org , the contact link is on the site.

Because this forum is full of home alone teens.

That does not answer my question. Who do you have the right against? To have a service right, you must have two parties. Who are you fulfilling the service for?

If there is no such contract, you have no right, simple as that. Using your "dollars for ditch" analogy, you have someone paying you to dig a ditch, hence the service contract (you know, offer, acceptance, consideration).


It's not gibberish, you are the one who claims that BTCs are a service right.

As to the rights under a licence, which licence would that be? (don't tell me the MIT Licence or I'll laugh). The only licence involved in any Bitcoin transaction is the program installation licence. No rights to a service arising from the MIT last time I read it.

I'd be even more surprised if you could claim a the existence of a trust from a software licence. Trusts can only exist from clear sources, such as a written trust, an oral agreement, a court order, or a will. Even implied trusts require the existence of a structured relationship between the parties. Good luck getting Bitcoin recognised as a trust in a court of law.

Jesus Christ, people. We still don't know enough information to take sides on this matter. I don't know enough facts to say that Kevin did or did not do anything wrong.

Sure, I know enough about Mt. Gox's behavior of either actively lying about or being ignorant of the security breach. I also blame them for not having a circuit breaker, which would be like 2 lines of code. I also blame them for a multitude of issues that have come up, such as accounts that don't even have email addresses associated, the lack of trading logs, no password strength enforcement, no address locks, no stop losses, and generally crappy communication for a place that can pull down $13k a day in fees.

But this is a separate matter. Right or wrong, I don't know. I'm saying that I don't think anyone is thinking straight if they're taking definitive sides on what happened with Kevin, specifically, and what should be done about it. We've seen scant evidence in favor of either claim.

However, Kevin, in realizing how his own actions could be perceived, has done a smart thing here by putting coins in escrow. It doesn't really do anything in terms of providing evidence, but it does indicate that he really is willing to let the other parties investigate to clear his name.

That's a class act. In fact, because so many people feel like this issue will impact their trading and trust of Mt. Gox, an investigation does need to be done by an impartial party with a neutral arbitrator. I do know this: Mt. Gox coming to their own conclusions and then announcing and attempting to enforce them is only sufficient if their conclusion is in clearing Kevin's name. I'll restate that: Mt. Gox can only possibly relieve Kevin of guilt, not reliably prove it. If they do investigate and believe that Kevin is guilty of something or should return the coins, then they need to then involve a third party.
You can't be both the plaintiff and the judge. You can, at best, only act to withdraw your accusation.

Mt. Gox should know that they are not perceived as being impartial, let alone trustable right now. It's akin to paypal's famous habit of pretending to arbitrate disputes, but usually just settling their own favor (freezing funds) or going with whichever account-holder brings them the most business.

Now, because we all know Kevin's name and what should have been private details, it really is up to Mt. Gox to see this through publicly. My guess is that, in one month, Kevin will have his coins and Mt. Gox will neither have accused Kevin of anything nor absolved him. They'll just have hoped that this quietly will have gone away.

That is not acceptable. If he gets to keep the coins, it needs to be confirmed by Mt. Gox that they will not pursue him in the future.

Good advice.

Keep the coins plain and simple.  MTGox knew they should have updated their system well before hand and did nothing.  They should bite the bullet on this one. 

And if on the small chance this dude had some inside knowledge on the thing and reaped the reward?  Well, Karma is a bitch anyway and what goes around comes around.

What's done is done move on.

10 BTC getting stolen due to a hack is not the same as someone hacking in and crashing the entire market. I support the reversal of the broken trades. The whole thing was a situation created by a criminal. All the trades that took place after the hack were based on the unnatural prices created by a criminal crashing the market.

Also, Kevin should just return the bitcoins, if it can be proven that MtGox was hacked. Why have we not heard from the owner of the account that was hacked? Has MtGox mentioned anything about contacting that person? If not that seems super fishy.

But assuming that MtGox were telling the truth, the right thing for Kevin to do would be to return the Bitcoins. He bought something that was stolen from someone else, and sold at a price much lower than its market value. Anyone who thinks he has a right to own those is not thinking.

But the problem is that one cannot simply assume Gox is telling the truth. And if they were in the right they would be pursuing him for the withdrawn bitcoins. The only reason they would not pursue him for it is because they have something to cover up. Whatever they are covering up may or may not be related to the hack&crash. They might have other (unrelated) reasons for not wanting law enforcement's eyes on their operations.

I haven't read any statement by kevin saying why he doesn't return them (he may have written that, I just haven't seen it if he has). If he is not returning them because he wants proof that there was a hack, then I support his decision. Any other reason for not returning them doesn't make sense to me.

should have filled my penny dish, instead of using escrow to hold them.

14KF98JRK9tEMM22eQU4URBPZykQgaNmHP
http://blockexplorer.com/a/2NuwvUdxKi

I'm sure people will only take .01 btc at a time, when theres no limits

Just let me know before you start the transfer ;

Who is he supposed to return them to?  A currently completely owned MtGox system?  The original "hacked account owner" who has not been identified?  Someone else?  I know if I held them and wanted to give them back I'd have no clue who the rightful owner is at this time.

That seems pretty key to me :)

MtGox will revert his 250k purchase, Kevin will keep the 600 withdrawn, and MtGox will take Kevin's $3000 from rollback as collateral.  Kevin makes out with 600 BTC at market price - $3000.  $5/BTC to break-even.

I love the lurkers who silently observe everything that's going on, and occasionally come out of the darkness to report news before others.

heh. merely a prediction.

it's a pity the bitcoin community hasn't yet sprouted arbitration and insurance services.

The community is basically brand new. Did you know 75% of the forum posts are since early April?

It's a pity I don't have a holodeck yet. Just a pity.

Agreed.

cuz with a virtual girlfriend you wouldn't post douche comments?

calling this guy a thief is way overboard.
what is wrong with you people?  :o
=bipolar?

it's a volatile market you fucking stooges, everyone knows this, it's exactly why we are even on the exchange!

IT'S FUCKING EXCITING!!!!!!!!
it's better than porn, icecream and videogames, you know you thrive on this shit!

This guy did EXACTLY as any one of us would have done in that position, he just beat us to it. Like a Boss.
No one knew what was really going on during that 15 minutes, except undisclosed parties and whoever was awake at Mt. Gox.

we all thought it was business as usual.

If you disagree with that statement then I ask you this:
Why did you not rally them to rollback trades on LULZBOAT DAY?????????

answer = business as usual, "BFD."

I remember that day, i lost 6 bitcoins, I'm not mad, the consensus across the board was:
Get the fuck out of the way when the LULZBOAT is sailing, NEWBS.

** If I hurt anyone's feelings because of this post, you probably deserved it.
Fact. Only reason so many people were on Mt Gox was because everyone else was.

Stop playing the game or stop calling this guy a thief.

stupid mob mentality.

all this sillyness is a headache.

and I still haven't gotten my answer as to why trade charges were doubled during the weekend.

/end of line
bitches

There is arbitration and, sometimes, options offers in IRC. There's even a #bitcoin-court channel. :)

I'll have to check that out.  ty

FWIW, I also just offered my services in the 'Selling' forum. Donno how many hits I'll get, though.

You have 100% claim to those coins. If they were operating as a financial exchange, they should have had similar safeguards to REAL financial exchanges that prevents someone from placing ludicrous buy orders that end up getting filled.

I was thinking they'd be returned to Gox, as Gox would need them to reverse all the broken trades. Gox will eventually come to a point where after they've reversed 99% of the broken trades, there will be some missing $ and BTC due to withdrawals (like Kevin's) preventing them from reaching 100% reversal. They might end up having to plug those holes with their own money to just leave a few trades unreversed I guess.

That. Cost of doing business. (and failing)

Hey Kevin, why are there so many ugly fatties on camwhores now?  Are you paying them in bitcoins or something?

Of course they will. And let's hope that gap will be big enough to really drive the lesson home.

Heaven forbid some company that made 0.65% of millions of $$ A day should have to take a minor loss!  Kevin.. take the money and run and dont listen to a buncha random guys on the internet.

Losses like those are what incentivize companies to spend $$ on security.  2 guys earning 0.65% of millions a day is just greed without laying out some bucks to get a security guy on staff.. anyone who saw that website knew they were skimping on costs/safety.

And I hear the money went into buying luxury office space and stuff like that, and flippant remarks about making a shoddy service to 'incentivize competition' or whatever..  and the computer geeks all saying well u should no all these best practices would cry if some carnival ride operator used cheap screws or non-code building materials then the guy scoffs and says 'well everyone should know that that chamfer joint requires 4" of thickness so it must be the CUSTOMERS fault cuz everyone should know that'

call the supreme court a guy who doesnt think the law is complicated...   Throw away the 200,000$ ivy league law schools and the 50,000 pages and subsections and latin terms and deliberations ... he's gonna invoke the 'ditch digging dollars statute'.   I think the EFF is looking for you man.. they just had a team of lawyers wasting their time on this when you were here the whole time.
whats your hourly?

it was 1.3% the entire operating weekend.

^^ this guy has no clue what he's talking about
http://forum.bitcoin.org/index.php?topic=21057.0

.02 btc

You must mean mediation, arbitration (http://www.uscib.org/index.asp?documentID=2726) requires a contract with a binding arbitration clause and certified arbiters.

Now with Clearcoin closing (https://forum.bitcoin.org/index.php?topic=21659.0;all) what happens?

Per Gavin, all existing escrows will play out.

Ah, i missed that bit, cool :)