With the admissions in the U.S. Bankruptcy filing by Mt. Gox, criminal action looks more and more likely, eventually.

http://www.computerworld.com/s/article/9246921/Mt._Gox_kept_exchange_open_despite_knowledge_of_large_scale_theft?taxonomyId=144&pageNumber=1

It is unlikely this will be treated as a criminal matter until after the bankruptcy proceedings are resolved.

The btc_xfer_report.csv appears to include only deposits and withdrawals to external addresses, though no bitcoin addresses. It doesn't include the results of trading.

It also appears to include withdrawals which never went through and whose balances were subsequently refunded.

Appears this dump may not contain transactions prior to the June 2011 compromise and database reset.

Also of note - GnuCash is one of the only accounting programs to implement the concept of trading accounts, which properly treats multi-currency trading.

http://wiki.gnucash.org/wiki/Trading_Accounts

Yes, though when I suggested the verifiable Mt. Gox addresses on the blockchain be frozen for this purpose, it raised howls of indignation.

Glad to hear he may have some considerable net worth. More assets to attach in the bankruptcy.

Yes, though apparently we mostly wait for the next post and filing, unless we want to spend money to try and force Mark Karpeles out now, which there hasn't much enthusiasm for doing.

A very interesting detail in all this. Sounds like we should expect some news within a month then. I agree, this is likely just a step on the way to liquidation. Unless MK pulls something out of the hat, like finding the missing BTC, or if they are under some legal control elsewhere.

So glad to see that this idea is being taken seriously 

This raises an interesting point though. My original proposal was only to lock coins presently belonging to Mt. Gox. I don't think it would be wise to lock coins belonging to others which might have been derived from stolen Mt. Gox coins, as this does become an even harder problem from an evidence point of view. Also, those others are not presently under legal action concerning the missing coins, whereas Mt. Gox is.

Clearly the evidentiary standards would need to be seriously considered.

You raise a good point though that this really is up to the miners. Sounds like the lock would be technically feasible, actually, not that hard.


Here's an example of a user that might benefit from this. With the Gox coins locked, at least they wouldn't be stolen or leaked to someone else until after the court proceedings.

Yes, could be a somewhat valuable asset to seize if they are liquidated.

The attorney we had retained on this matter indicated that the fees are paid out of the assets of the insolvent company, so I believe similar to other countries in that regard.

You're correct. It would just require agreement of 51% of the mining power.

I understand people's reluctance, but I've yet to hear that this would really hurt anyone other than possibly the people with the locked coins. And in those cases, there would be a procedure for unlocking.

I also understand the general concern that this would change the underlying perception of bitcoin. In other words, that the value of bitcoin for most people is derived from the fact that there is no such locking possible. Now while that certainly has been the rule to date, the question is, would such an ability to lock addresses, subject to a review procedure, increase or decrease the typical potential user's confidence?

Certainly the criminal element wouldn't like this. By and large, of course, they would usually be flying under the radar of some limit on the amount and would likely be in trouble by the time legal action is taken against them anyway, but presumably they still wouldn't like this.

But I do wonder what the effect would be for the much larger number of potential users that bitcoin is trying to expand into? Certainly the aficionados who tend to read this forum aren't representative of this group.

I've actually read comments of at least a few miners that might be in favor of such an idea, because they don't want their resources being used to commit a large fraud or theft.

I tend to be interested in the actual facts behind an issue and don't pay much attention to arguments from authority. If you don't like my discussions or posts, please go ahead and block me so you don't have to read them.

Nice thoughtful remarks.

Is this really like re-issuing a security though? It strikes me as more like evidence preservation, locking up the securities until their proper ownership can be determined.

This proposal is not intended to "run to big daddy" at all. This is not a proposal for any government agency or some such to regulate or change bitcoin in any way. It is a proposal for miners, those controlling more than 51% of the hashing power, to refuse to let their resources be used to support a large scale fraud or theft.

Good point about the potential dangers, particularly with the possible leaks of the source code and the database.

OTOH, it strikes me that freezing spending of reasonably well identified Mt. Gox accounts would be beneficial. How do you think that would harm an investigation? It strikes me as similar to evidence preservation.

Good point. I guess the people controlling 51% of the hashing power would have to determine which independent group had sufficient validity. Such a group, constituted appropriately, seems like it could persuade them.

Hypothetical - what is someone doesn't mine at all. Is that extortion and tantamount to theft of the block reward? What constitutes the valid blockchain is essentially determined by a majority of the hashing power.

Also, the statement here ignores the fact that this proposal is to have a form of due process -- appropriate weighting of evidence and an appeals process.

What this will depend on, of course, is who controls the majority of the hashing power. I suppose if you four control 51%, that would make the point. There might be other reasons the rest of us would like to fork then, but that is a different question  

You are correct, I should have written, following the majority of the other miners.