Bitcoin Forum

   

    Hello Nejc
     
    I'm writing to you because i have near-proof that the stolen MtGox coins
    are being transfered to your exchange. I would appreciate any information
    you can supply about this matter but i understand that legal restrictions
    may apply. In either case this is crucial information to you and i hope you
    will take the required actions. The following will be a rundown of the
    proof (which can be expanded upon).
     
    In the time Jed McCaleb owned MtGox there was a donation address listed in
    the left side:
    1EuMa4dhfCK8ikgQ4emB7geSBgWK2cEdBG
    This address send coins in 2011 around the time the exchange changed owner
    to Mark Karpeles
    1EuMa <https://blockchain.info/address/1EuMa4dhfCK8ikgQ4emB7geSBgWK2cEdBG>
     -> 1FBiC<https://blockchain.info/address/1FBiCxd41EgQ4u6PQVsAadDoot7FD9sx99>
     -> 1B4AW<https://blockchain.info/address/1B4AW7BwBYGUbcZhXwv6JK6bmR6UFdR7BK>
     -> 1Kq6s<https://blockchain.info/address/1Kq6sr5A9bM82u1vRTByjCvvixm5dxwQuV>
     -> 1K66U<https://blockchain.info/address/1K66ULWc44926qYwdNUX5hf9pazf7DAQeU>
     -> 1pdMA<https://blockchain.info/address/1pdMAQEyFNSgN4RU4BF1bMWHjFgumXcnj>
    These coins were split into blocks of 2-5k which were used as cold storage.
    The 1pdMA<https://blockchain.info/address/1pdMAQEyFNSgN4RU4BF1bMWHjFgumXcnj>
    coins
    (plus the rest) didn't move until 2013-12-21 and 2014-02-05 as part of a
    huge movement of old coins following the same pattern. These coins are
    mapped in two spreadsheets
    here<https://docs.google.com/spreadsheet/ccc?key=0Aj-Hzmrt4w_6dEFxWDRLcWhKSG9PSDFQMXdCNVlKbGc&usp=sharing#gid=0>
     and here<https://docs.google.com/spreadsheet/ccc?key=0Aj-Hzmrt4w_6dGpnaGlTeV9qN0dCRFdNVHpGS2RGYkE&usp=sharing#gid=0>
    totaling
    ~300k coins.
    Two of the MtGox cold storage addresses moved as shown:
    1PNNF <https://blockchain.info/address/1PNNFz5u2qy9xstrHmBR2Z5dERmad1Ku3j>
     -> 1JFXQ<https://blockchain.info/da/address/1JFXQhnX6V38inxoBy5jDm9KgjeKx6nFp7>
     -> 1DJoA<https://blockchain.info/da/address/1DJoAkM4fqFjPYZTLXtUGfoya8zCXZsH8W>
     -> 1PAzo<https://blockchain.info/da/address/1PAzoSbf2mjK41H9FRY9u9QjabtEu4ATbb>
    14MiN<https://blockchain.info/da/address/14MiNG1HCnXaRNGgH43o8Ry9c4VcyYxL2L>
     -> 1HsUP<https://blockchain.info/da/address/1HsUPjn15EQP1mSeiB9BFifgwQzvwGQaYb>
     -> 1KnPn<https://blockchain.info/da/address/1KnPnAvUv11ukCg6d5q4i4jXkJQ6X2UASF>
     -> 1PAzo<https://blockchain.info/da/address/1PAzoSbf2mjK41H9FRY9u9QjabtEu4ATbb>
    I know that 1PAzo<https://blockchain.info/da/address/1PAzoSbf2mjK41H9FRY9u9QjabtEu4ATbb>
    is
    an address owned by Bitstamp and i assume that
    1DJoA<https://blockchain.info/da/address/1DJoAkM4fqFjPYZTLXtUGfoya8zCXZsH8W>
     and 1KnPn<https://blockchain.info/da/address/1KnPnAvUv11ukCg6d5q4i4jXkJQ6X2UASF>
    also
    are Bitstamp addresses used to receive coins from customers. This shows
    that the MtGox cold storage coins moved directly from cold storage to an
    unknown address and then to a Bitstamp address. There are an estimate of
    13500 coins moved to Bitstamp as of this moment.
     
    I'm looking forward to hearing from you and i will appreciate any
    information you may give me. It is of my interest to find the owner of
    1JFXQ<https://blockchain.info/da/address/1JFXQhnX6V38inxoBy5jDm9KgjeKx6nFp7>
     and 1HsUP<https://blockchain.info/da/address/1HsUPjn15EQP1mSeiB9BFifgwQzvwGQaYb>



http://pastebin.com/zApD5N4X    <<<< Not my pastebin

Just playing devil's advocate, but how do you know that the 2011 movements weren't a withdrawal from mtGox that went into someone else's non-mtGox cold storage?

If I am the thief or whoever have those coins, i would cash them out through BTC-e.

The thieves will probably be cashing out their coins on all of the exchanges. Why put all their stolen eggs in one basket?

Appreciate the detective work. Assuming you are correct, what should bitstamp do about it?

That's for them and their lawyers to decide. We all would appreciate some public statement from them however in regards to whatever decision they take. They were emailed yesterday and have not yet responded.

I don't think there is much that can be done. Those coins are lost. It's best to move on and learn that keeping large sums of BTC in online wallets, exchanges, etc is a bad idea.

There is another possibility here that could explain some of coin movements people have been observing as of late.

It stands to reason that even in MtGox's heyday holders of large amounts of BTC would be hesitant to leave their BTC under the complete control of MtGox, but still wanted access to the trading platform without having to move large amounts of coin back and forth. At the same time Gox - like any business that has preferred customers - would have wanted to accommodate these "whales" to keep their business.

Is it outside the realm of possibility that Gox held the funds of "whales" on their system in wallets whose private keys were shared with the account holder, unlike the regular pleb users who they didn't?

They could have broken it up into multiple wallets for all we know, but the point is that the "whales" retained direct access to their funds and could have moved them out at any time regardless of what was going on at MtGox at the time.

tl;dr version: Did Gox allow preferred clients to keep shared private keys to BTC on the exchange, which allowed them to independently move their funds out?

I think the problem for Bitstamp and other exchanges becomes more complicated once they are knowingly in receipt of money obtained through illegal means or have been notified as such. They probably need to tread very carefully here.

There are about 150k coins that caused the feb 6th spike in bitcoin days destroyed. It's a single owner and close to mtgox. It's either McCaleb or gox. I'm thinking it's McCaleb and it could be that he was trying to save the coins from bankruptcy. This has to be investigated.

Bitstamp has been for a long time bugging people with all kinds of AML stuff in situations where money laundering does not really seem relevant at all.
see for example: https://bitcointalk.org/index.php?topic=406908.0

Now we have a situation where we have a very high probability money laundering ongoing and so now it is time to see whether bitstamp was really serious with the AML stuff or whether the all AML in bitstamp was just bullshit invented in order to bug the little people.

And if found true it could point at insider trading.

This. Cryptocurrency is not for fools. Personally I'm glad most of the fools and weak hands have been shaken out by scammers and thieves - it was bound to happen anyway. Better it happen in one big, early crime than happen over many smaller crimes over a long, painful period of time. That scenario would be far more damaging to Bitcoin in the long run.

even if they are, it is not bitstamp's fault/responsibility.  That goes in the face of the whole decentralization of bitcoin.  Mt Gox was negligent, that is a centralized problem/loss, that shouldnt spill over into affecting other businesses in the same space.

This will be a test of government involvment in bitcoin.  Since noone in governmental authority has currently declared these coins stolen, then the liability should be on the entity/person that put them into bitstamp, where bitstamp should give up the identity of the that entity/person when presented with the proper legal paperwork.  

If bitstamp is held liable for accepting coins that are later legally proven to be stolen, this will present a serious issue with the fungibility of bitcoin.

At any rate, if I were bitstamp, I'd probably freeze the funds and give the Japanese bankruptcy court an opportunity to lay claim to them out of due diligence, due to the large amount.

This.

Gox is already under the legal lense and this forum is actively monitored for leads. This is definitely a trail that will be followed.

After being notified, Bitstamp has a legal obligation to inquire into the origin of these coins. If the court determines that these coins are stolen then Bitstamp will be charged with money laundering and their USD bank accounts may be seized just like those Gox accounts were.

It doesn't matter if we agree with the AML rules, Bitstamp is a financial service provider and the rules are clear. Bitstamp has only one legal option in this situation...


They won't be charged with accepting stolen coins, they only become liable from the moment they were notified that the coins are "allegedly" stolen. If they ignore the allegations and allow the coins to trade without investigating the source then they are willfully laundering money.

Assuming this is correct,  what can or should be done?

It brings up the question people have asked for years now....what do you do if you know coins in your possession came from a crime or thievery of some sort ??

I believe the general consensus amongst a lot of people is not much can be or should be done.  Similar to if you took cash out of an ATM and found out that a year ago those $20 bills were stolen from someones house. Should you give the money to owner (if you can find them) and you end up losing money,  should a bank get involved?  etc etc.

If you were talking USD and a US based company, I know this would be true. But neither are true. Specifically this company isn't dealing with stolen fiat, and I know of no laws compelling companies of any country to investigate stolen "virtual" currencies.

I could be wrong, and that's why I wanted to ask... what laws would compel them to do anything?

Question is are bitstamp legaly obligated to investigate solely on some online notification? I do not think so and that would be a huge mess and possible abuse by bogus claims.

Where would the legal liability begin?  Bitstamp can't be held accountable for not reading every bitcoin forum or respond to a random emails.   However, legal counsel representing the creditors should immediately notify Bitstamp that the funds are suspected stolen.

The law of dealing with any type of stolen property.  This is an old old law, dating back to biblical times and is represented in Uk, US and most modern legal systems.

time for bitstamp to step up

Any smart thief would not do this. Bitstamp requires KYC/AML verification for any deposits or withdrawls, BTC or fiat, meaning a scanned copy of their ID must be submitted.

It's also likely they may not cash these coins out for some time in order to wait for the investigation to blow over, and also knowing they'll probably be worth more in the future anyway. There is not a lot of incentive for them to sell now.

There isn't a central issuing authority to appeal to, that's one of the key basic appeals of Bitcoin and also one of it's biggest flaws.......

Bitcoin transfers are either irreversible or they're not, you cannot have it both ways.

That said there should be legal remedies against deliberate criminal acts, but you cannot undo previous transfers.

The analogy is cash, if someone steals your cash, you have a right to try to reclaim it from the thief, but if he has spent it you cannot trace those dollar bills and demand them back from the new owners, provided they were not complicit in the theft.

In this instance, there is no way of unwinding these movements. The only remedy would be to prove that the recipient knew they were fraudulent, or did not check sufficiently, then they might be liable to make repayment, but it would be from any coins they owned now, not any old ones and only after a court battle I'd imagine. Personally I doubt it could be proved that any movements did not have some plausible reason for existing and may indeed have been genuine.

The bigger issue is that world of Bitcoin wants to be anonymous, unaccountable, untraceable and subject to no rules, until such point as bad things happen and then suddenly people want the comfort and safety that these rules were designed to create in the real real world. You cannot have it both ways folks!

The problem with this is I don't think "ownership" of an amount of bitcoin has been legally established to be property.   It truly is nothing but ledger entries on a public database, not like taking control of physical property like blood diamonds or Nazi gold.

I think the legal framework will rely on laws concerning fraud, not stolen property.

If I coerce or fool you into giving me access to your online bank account, transfer the money to another account under my control,  Did I steal your property or did I defraud you?

Are the police legally obligated to investigate if a teen is truly going to kill himself live via Facebook if some random person on the internet informs said suicider's local PO?

I think pointless comparisons aside, the authorities take proceeds of crime very seriously because 9 times out of 10 that money goes into other criminal activity and makes their key mandate to curb crime in general that much harder. If you get notified and you do nothing you are asking for trouble.

strange:

Deleted Post
« Sent to: franky1 on: Today at 06:43:10 PM »


ab8989's message still appears so that cant be the reason (his message being at fault) and deleting the message because of wasted space, well.. they sent me a message informing me they deleted, which takes up more data on their hosted space compared to just leaving the message where it is..

very weird. ohwell my +1 is a valid addition to the topic as it emphasizes the message so here it is back again and also includes alot more writing.

The problem is the AML law being vague. The law doesn't require an official letter; if the email to Bitstamp was opened then from that moment the burden is shifted to Bitstamp to ensure compliance with the law.

If the Bitcoins were stolen and are linked to Gox; the coins are under control by Bitstamp. The user who deposited the coins isn't in control of those coins. Bitcoin has already been ruled subject to current AML laws. Bitstamp is responsible for the fate of those coins from the moment they opened the email.

As a financial institution, Bitstamp is required to place a hold on those funds and investigate the allegations. That's the law and there are consequences to breaking it.

My post were related to prior poster, but i did not quote it, you are free to read it yourself but here is part of it.
I do not see relation here, facebook, police, suicide, wow what if kind of response, a? Hmm, what do you think, call police and ask them?
Further, i believe bitstamp is obligated to do only if ordered from court or law enforcement. And of course they can investigate internally all they want, but after acts  of such investigation are different matter. Investigation can start from different reasons but its usualy closed outside the public.
Also, is bitstamp financial institution regulated with uk FCA? Bitstamp claim that bitcoin is not regulated in the UK.

psshhh.... Hazek doesnt like it.....

Legally they have to do something about it once they are warned or they will be complicit. It is valid to anyone or any company.

Please discuss: https://bitcointalk.org/index.php?topic=527955.0

Any better idea or improvements of the concept are highly appreciated!

We just need to start to collect all these addresses more structured.

Correct.

If MTGOX still have a balance of coins or cash at BitStamp, then it should be frozen and held accountable to the insolvency practioners in Japan who are liquidating MTGOX.

However, if they were moved on from Bitstamp, or converted to Fiat and withdrawn by MTGOX before Bitstamp had any notice of wrong-doing, then Bitstamp would not liable for the actions of MTGOX. As said they could also simply be customers of MTGOX moving their coins to Bitstamp.

If MTGOX knew it had coins or cash still on deposit at Bitstamp, then they should have been reported to the liquidator as an asset an included in the financial returns.

The chance that this will result in extra coins for the MTGOX customers seems very slim indeed.

Only if such accounts are held under mtgox name then yes, such funds need to be frozen and trastee informed.
 ( regarding other note, mtgox are not being liquidated at time being, only rehabitilated and under protection).

This is deep shit. Thanks for the post.

BTW: Are you the aquent from the MK&aquent irc-log, which has been posted a few days ago?

somehow it's sounds to easy, I doubt any thief with a huge amout of btc, that will trade them just like that directly, and also will be using all sort of means to spread the btc, being it exchanging to other cryptos using other exchange ect ect, another thing, right now it's too hot to exchange the stolen btc, he would either have done it before is there was enough time or will wait a year or two at least

8 hours now and no reply from Bitstamp. What on earth are they up to?

I think we need an answer immediately. Either the account is locked or you - bitstamp - do not feel you are in a position to do so. We need to know either way so that we can consider our other legal options available.

I do not know.  However, if Gox did make that accommodation, then it would be smart for any such clients to expeditiously move their funds to wallets that Gox holds no control over,  as soon as they learned of any financial troubles or probable failure of Gox.

If such 'whales' were not willing to trust Gox sufficiently to deposit their BTC with Gox in a manner that they would lose all direct control over them,  then for sure they should not trust Gox now   not to yank the coins out of the shared wallet into a Gox trustee-controlled wallet,  in order to pay other creditors and fund Gox's rehabiliation.

Don't assume too much. A US president got impeached for getting sucked off.

a smart man will know that bitstamp would not reveal personal details to the general public. so if i had 700k coins. id deposit them in any exchange. yes you know i deposited them due to blockchain. but when i withdrew the btc (due to mixer effect) you would not see the same taint. which is stage one of hiding coins. bitstamp would to reveal which withdrawal address the funds ended up, for the community to be able to continue the trail.

by that time the funds have swung between several exchanges and maybe even swapped over to alt coins to double the mixing.

anyone ever think that the splitting up of the coins was another exchange/mixer inbetween gox and bitstamp, and you have all just ben following the transactions of the mixers counterparts and not gox

Very interesting and I have to concur with franky1 about "mixing" of the coins.  8)

And why woud they respond? " hello Nejc" sound rude and near proof or assumption is far from the real proof.
If and when some coins get court ruling as stolen then responible account holder at any entaty with proven link to those coins can be held responsible.
Suspicious solely on some pastebin can not warrant fund freeze and why would any company risk a sue doing that - on what grounds?
If somebody has some knowledge they need to send it to court assagnee - surpevisor of mtgox so they can take appropriate actions.

Hello Nejc,
Exchanges have a sworn duty to treat all customer deposits the same way.
Exchanges are not in the business of playing detective or judging the clean nature of the coins.


Dear OP and others,
If you want to see justice, call the Japanese police and ask why Mark is not in jail, yet.
If you want your coins back, figure out a respectable plan of action.
Asking an exchange to violate their sworn duty is not respectable.

As far as I know,  MK has not been accused of fraud in a court over mtGox.  It's probably a good idea to get a lawyer to make the accusation and ask a court to freeze the funds.   I really don't think your email sufficiently demonstrates that bitstamp is in possession of your personal funds from mtGox.

I am not sure why everybody likes to talk about "proof". The law deals with evidence, not proofs. Law is not maths.

Bitstamp needs to respond because any delay in responding may open them to legal liability. If they are investigating the matter then sure, but say so, if the account is to be locked or not locked affects the decision/s that a creditor may make.

Any delay therefore by a creditor in applying for an injunction can lead to legal liability. If they wish to take that risk, together with the PR risk, then that's their legal and business decision.

Your op talk about so called ''near proof'' so there is a answer to your first comment.
Respond to whom? Not responding to you or online pastebin will make them liable? Liable of what? What evidence? Only authority reqest are legit request of which bitstamp is legaly obligated to comply.
Bitstamp does not have anything with mtgox creditors and why would bitstamp or any other party affect eventual legal actions of mtgox creditors?
And since when any investigation are run and discussed in online public forum?

If you want to fill oficiall complain do it with appropiate legal chanell, not on public forum.

Bitstamp needs to run an honest exchange.
It is not their job to be the "Bitcoin Police."
To avoid "legal liability", they treat all customer deposits the same.  <period>

It's not their job to be the "Bitcoin Police" but an allegation of money laundering involving funds from a high profile heist/lawsuit demands a response. Bitstamp is in control of those coins now; Bitstamp has an obligation to operate within the law.

The entire USD balance owned by Bitstamp is at risk based on their actions and how they treat money laundering allegations. Gox should be a lesson; their bank accounts were seized because they ignored AML laws dealing with the Silk Road.

Bitstamp has an obligation to its users. They need to ensure that the proper steps are being taken to avert the legal risk.

Once the allegation is made the water gets muddy. Bitstamp can't just ignore the allegation if it wishes to remain compliant with AML laws...

Stolen coins are still coins.

1) What if the real crooks used a mixer and you are looking at the wrong coins? (I haven't read the whole thread, has this been answered?)
2) Much of what passes for "AML laws" is complete BS and those laws need to be changed.

3a) "Self-regulation" of our community is not the same as running to the Gov, just because some people got badly burned.
3b) In a free market Bitstamp can run their business the way they see fit (people who are satisfied will tend to remain customers)
3c) You have no right to tell Bitstamp what to do.   :P

Then there is the question of "ownership" of said coins and whether they can be considered part of the bankruptcy proceedings.

If both Gox and the Whales had access to the same key, isn't that more akin to having your bank account linked up to a trading account - until Gox actually draws on those particular funds they might not be considered under their exclusive control.

Still, if true the idea that a select few had privileged access to private keys and were free to move their funds out while everyone else got suspended is reprehensible. :(

I never understand what you people mean.  "Weak hands" ?  It doesn't make sense.   It was a huge crime and there is little reason to think it won't happen again.  Trustless currency works by giving the wallet owner absolute power.  Whenever people have their coins somewhere else, the same shit will happen.  This stuff will be constant but cryptocurrencies are not going anywhere.

Ideologically I agree with you.

1) Bitstamp needs to verify the source of the coins; they need to place a hold on the account and audit the account. If the account doesn't belong to a party implicated in the legal proceedings then they can release the hold. Really, they need to focus on the account holder more than the coins... (This isn't about the stolen coins, this is about protecting the USD bank accounts containing Bitstamp exchange users' funds). Gox lost the USD bank accounts because of AML violations; Bitstamp needs to protect its users.

2) I agree, the AML law should be ripped out of the book, crumbled into a ball, then dropped into a crucible of molten iron... But it's the law right now and Bitstamp has an obligation to follow the law. If Bitstamp doesn't follow the law, the account holders will stand at risk of  losing their money along with the money belonging to Bitstamp...

3a) The government is already involved, I agree about not running to the government in most cases. This time, the government is already a party of an investigation. Withholding information would be unwise.

3b) This isn't a free market. If it was you would be correct...

3c) I didn't write the law. Every Bitstamp user is exposed to counter party risk, Bitstamp has an obligation to its users to mitigate that risk by following the law and acting reasonably. Every user has a right to insist...

I would agree that the coins are more likely to be being mixed, rather than sold.

Secondly, the coins are gone. Appealing to centralised authority to fix our problems is, quite frankly, embarrassing. Too many Bitcoin users are trying to use a decentralised currency (although I'm not sure Bitcoin would be classed as this) with a centralised mindset. This is the wild west. Innovate accordingly.

"near-proof" ?!

So... you don't have proof ?

exactly

Are you a creditor? You didn't say so anywhere, and certainly didn't offer any proof of that in your letter. If you want an exchange to release customer data, you'll do better to go through legal channels. Please do post here if Bitstamp do pony up the info you want, I'll add them to my list of mickey mouse exchanges not to be trusted.

I hope you sent that a copy of that directly to them, ideally by registered post to their registered business address as well as by email. They have a Money Laundering Reporting Officer so it should probably go to him or her.

Whether or not they are legally required, they say they intend to conform to UK AML legislation voluntarily. As far as I can tell, their main extra duty in this case would be to report the transactions as "suspicious" to the Serious Organised Crime Agency (http://www.hmrc.gov.uk/MLR/your-role/suspicious-transaction.htm), if they agree that it is suspicious. SOCA would then be responsible for investigating it.

Whether it is 'suspicious' or not will depend on the nature of the existing relationship.

It is entirely likely that MTGox held accounts at Bitstamp and vice versa, most exchanges will deal with other exchanges as a way of boosting overall market liquidity. It could therefore be a normal transaction for MTGox to send coins to Bitstamp and vice versa. Obviously only Bitstamp will know the full history and details of all these transaction and can therefore make decisions about who they report this to, if anyone.

I would imagine that Bitstamp would already have frozen any accounts that they knew related to MTGox when they became aware of the MTGox formal Japanese suspension/liquidation/re-structuring (whichever it is legally).

We should all appreciate that Bitstamp will incur no legal obligations stemming from forum posts that they may or may not be reading.

As others have noted, they will have a designated AML officer, email and registered letter is the way to go. Even a support request.

+1

Seem that many still confuse money transmitter licence what US require and what lead to money seize from mtgox located in US.
Bitstamp does not operate or have any bank account in US.
Each country has at own their financial regulation and in fact depend on laws in their country (UK). At present time I thnk ( not sure) that they can operate without mandatory registration to Uk financial institution.
However, that does not mean that anyone with evidence can not write official report/complaint to bitstamp or law enforcemant in UK in which response and further action would depend on presented evidence.
Forum are not a place for such things.

There currently exists no mechanism for Bitstamp to be regulated in the UK. AFAIK, they have repeatedly asked to be regulated, and been repeatedly turned down. But because they exist on the membrane between the fiat and the crypto worlds, they have to comply with pretty standard AML rules. Failure to take these rules seriously would result in their relationship with their Slovenian bank being terminated.

I agree. Found what bitstamp need to do in regard of aml. As i am aware, they do it very strict.
Its good to read and to see why they must so many ''annoying question''. Interesing that each kind of money business ( exchange, bank, casino) has separate aml regulation and what happens when exchange as a whole is a bank client.

http://www.hmrc.gov.uk/mlr/your-role/resposibilities.htm