The new "IPO Lite" rules are still being set up. Comments are open until March 24th. This is for startups that need more than $1 million or so but less than $50 million.  It's a bad sign that some of the enthusiasm for this is coming from south Florida, historically the scam center of the US. Also, some of the people pushing this want to do IPOs for real estate trusts. Others want to be able to IPO a shell company (one with no assets or operations.) It's not something that seems to be a big deal to Silicon Valley. There's enough venture capital available to get startups to the point where they either go public or go under.

Nah. Things like this have happened before. There's not much new in the fraud business. Learn some financial history.

Suggested reading:

* "Extraordinary popular delusions and the madness of crowds" - a century old book, and all the major scams are described.
* "The Great Salad Oil Swindle" - 50 years ago, a scam involving trading in receipts for nonexistent salad oil. Sound familiar?
* "The Smartest Guys in the Room" - how Enron blew it.
* "Faking It in America" - how a 19 year old created a $100 million phony company.

Yes, those are all books. Big books with lots of words. You'll see precedents for just about every scam seen in the Bitcoin world.

The Bitcoin world is a lot less original than it thinks it is.

What usually happens is that some unregistered security crashes, investors get mad and contact the SEC, and the SEC has the Justice Department prosecute the people behind the security. Here's the SEC's list of recent litigation actions.

About once a day, the SEC drops the hammer on some get-rich-quick scheme that turned out to be a ripoff. In the last week:

* InfraAegis - claimed to have Homeland Security contracts for "radiation-detection kiosks". They didn't. Investors lost big.
* Robert Custis - Ponzi scheme, investors didn't get paid.
* Good Life Financial Group -  "fraudulently misappropriated and converted investors' funds for his personal use to pay previous investors, to purchase a house and car and to pay his daughter's tuition and other personal and business expenses."
* Kevin O'Brien - broker who stole customer funds.

Look familiar? Each type of scam above has been seen in the Bitcoin world. Same old investment frauds. Same regulations apply. The government is not "holding Bitcoin back".

Hm. Items of interest:

The code sends emails to "mark@ookoo.org" on some errors.  "ookoo.org" is owned by

Mutum Sigillum LLC
220 E. Delaware Ave., #1085
Newark, DE
US

which is a subsidiary of Mt. Gox.

On page 26, there's a private key embedded in the code as a long hex string. Requests involving that private key are rejected.

Bitcoin transactions are sent to "relay.eilgius.st" and "mtgox.relay.eligius.st". That's a mining pool. But that "eligius.st" address is registered to Mutum Sigillum LLC:

DOMAIN: eligius.st

REGISTRATION-SERVICE-PROVIDER: K.K. Tibanne
URL: http://www.tibanne.com/

created-date:    2011-05-10 00:27:33
updated-date:    2014-03-03 04:59:29
expiration-date: 2014-05-10 21:59:59

registrant-organization: Mutum Sigillum LLC
registrant-name:         David Manager (MUT525418A4EC0C7)
registrant-street:       220 E. Delaware Ave., #1085
registrant-city:         Newark
registrant-state:       
registrant-zip:          19711
registrant-country:      US
registrant-phone:       
registrant-fax:         
registrant-email:        domains@mutumsigillum.com

admin-organization: Luke Dashjr
admin-name:         Luke Dashjr (KKT5313FE423381E)
admin-street:       8512 Templeton Drive
admin-city:         Omaha
admin-state:        NE
admin-zip:          33523
admin-country:      US
admin-phone:       
admin-fax:         
admin-email:        luke+kalyhost@dashjr.org

tech-organization:
tech-name:         Luke Dashjr (KKT5313FE424A57E)
tech-street:       8512 Templeton Drive
tech-city:         Omaha
tech-state:        NE
tech-zip:          33523
tech-country:      US
tech-phone:       
tech-fax:         
tech-email:        luke+kalyhost@dashjr.org

billing-organization:
billing-name:         Luke Dashjr (KKT5313FE425CFF3)
billing-street:       8512 Templeton Drive
billing-city:         Omaha
billing-state:        NE
billing-zip:          33523
billing-country:      US
billing-phone:       
billing-fax:         
billing-email:        luke+kalyhost@dashjr.org

Mt. Gox was known to have close connections to Eligius, but this is closer than previously thought.

They said this. (from archive.org):

Mt. Gox represents and warrants that:

* it will use all reasonable care and skill in facilitating the matching of offers of the Members on the Site via the Platform to conclude Transactions.
* all purchase and sale offers, as well as Bitcoin Purchase Transactions, made on the Platform, will be managed in an anonymous manner so that Buyers and Sellers will not know each other.
* the Transaction Price is calculated on the basis of actual matched offers made by Buyers and Sellers participating in the bidding process on the Platform combined with the applicable Commission.
* once offers to buy or sell Bitcoins are matched, such offers may not be withdrawn.
* Transfer of Bitcoins in a Transfer Transaction may not be withdrawn.
* it will hold all monetary sums and all Bitcoins deposited by each Member in its Account, in that Member's name as registered in their Account details, and on such Member's behalf.
* it shall comply with any and all laws and regulations relating to offering the Platform.

...
To the extent permitted by law, Mt. Gox will not be held liable for any damages, loss of profit, loss of revenue, loss of business, loss of opportunity, loss of data, indirect or consequential loss unless the loss suffered is caused by a breach of these Terms by Mt. Gox.

Mt Gox cannot be held liable for any malfunction, breakdown, delay or interruption to the internet connection, or if for any reason our site is unavailable at any time or for any period. Where our site contains links to other sites and resources provided by third parties, these links are provided for your information only. We have no control over the contents of those sites or resources, and accept no responsibility for them or for any loss or damage that may arise from your use of them.

In the case of fraud, Mt. Gox will report all necessary information, including names, addresses and all other requested information, to the relevant authorities dealing with fraud and breaches of the law. Members recognize that their account may be frozen at any time at the request of any competent authority investigating a fraud or any other illegal activity.

To the extent that a Member operates and uses the Site and the Platform other than in the course of its business ("Consumer"), nothing in these Terms shall affect the statutory rights of such Members.

Nothing in these terms excludes or limits the liability of either party for fraud, death or personal injury caused by its negligence, breach of terms implied by operation of law, or any other liability which may not by law be limited or excluded.

Subject to the foregoing, Mt. Gox's aggregate liability in respect of claims based on events arising out of or in connection with a Member's use of the Site and/or Platform, whether in contract or tort (including negligence) or otherwise, shall in no circumstances exceed the greater of either (a) the total amount held on Account for the Member making a claim less any amount of Commission that may be due and payable in respect of such Account; or (b) 125% of the amount of the Transaction(s) that are the subject of the claim less any amount of Commission that may be due and payable in respect of such Transaction(s).

There's no choice-of-law or arbitration provision.

Those are not unreasonable terms. They're better than Kraken's, for example.

One thing that works is close to what Coinbase does - don't keep the money, deposit it into the customer's bank account daily.
We need exchanges you only trust for a few hours. Every day, the exchange should move all your funds to a real bank account, and send all your Bitcoins to your wallet.

Mt. Gox itself (i.e. Karpeles) is still in denial. Read their statement today:

"In order to increase repayments to our creditors, it is necessary to explore the possibility of having MtGox Co., Ltd. continue its business. This is why the civil rehabilitation procedure has been chosen, Rebuilding MtGox Co., Ltd under the supervision of the court in a legally organized procedure while giving proper explanations will not be for the sole benefit of the company but for that of the whole bitcoin community. All efforts will now be made to restore the business and recover damages to repay debts to creditors. We hope for the understanding and cooperation of all."

That's totally unrealistic. Mt. Gox will never be a functioning business again.

That's why it's important to have legal efforts underway to take control of what's left of Mt. Gox away from Karpeles by converting the "civil rehabilitation" into a trustee and creditor controlled bankruptcy. Before Karpeles steals what's left.

There's a classic case on this - SEC vs. Howey. Read the Wikipedia writeup and the Howey test.

For the Too Dumb, Didn't Read crowd: if it works like an investment in some kind of potentially profit-making business, the SEC can regulate it.

Non-stupid questions to ask:

* What is the case number in the Tokyo District Court?
* What is the name and business address of the supervisor appointed by the Court?
* Do you in the call center work for Mt. Gox, the Tokyo District Court, or some other organization?
* Have any criminal charges been made with the police in  Japan?
* What law firm represents Mt. Gox in this matter?
* Has Mr. Karpeles been interrogated by the Tokyo police?
* Has any Mt. Gox employee been interrogated by the Tokyo police?
* Who is the contact person at the Tokyo police regarding Mt. Gox thefts?
* Has Mr. Karpeles ever been convicted of a crime?
* When and where will Mt. Gox hold their next press conference?
* Are depositors with Mt. Gox considered secured creditors, unsecured creditors, or is Mt. Gox merely the custodian of depositor assets?

Answers to those questions might be useful.

(It's worth noting that, while Mt. Gox is asking you not to contact their court appointed supervisor, that's their position, as the debtor. As a creditor, especially if you're a big one, having your lawyer contact the court appointed supervisor is probably necessary.)

Non-stupid questions to ask:

* What is the case number in the Tokyo District Court?
* What is the name of the supervisor appointed by the Court?
* Do you in the call center work for Mt. Gox, the Tokyo District Court, or some other organization?
* Have any criminal charges been made with the police in  Japan?
* What law firm represents Mt. Gox in this matter?
* Has Mr. Karpeles been interrogated by the Tokyo police?
* Has any Mt. Gox employee been interrogated by the Tokyo police?
* Who is the contact person at the Tokyo police regarding Mt. Gox thefts?
* Has Mr. Karpeles ever been convicted of a crime?
* When and where will Mt. Gox hold their next press conference?

Answers to those questions might be useful.

That's a very good question. I suspect that "mtgoxrecovery" is a scam. They don't give a name, an address, or a phone number. They claim to have a law firm representing them, but don't say who it is. Their domain is registered through an anonymous domain service in Panama. Their IP address runs through a anonymizing DDOS-prevention service. That doesn't look good.

Do not send them any account information or identity information.

I suspect that's what http://www.mtgoxrecovery.com is doing. They're collecting email addresses of Gox users, and claiming to "assist" them in recovery. But they don't have a name, an address, or phone number. Their domain name is registered anonymously. They claim to have an attorney, but don't say who it is.

Do not give "mtgoxrecovery" any account or identity information.

Keep digging for info on that. That's the kind of info that can be used to convince the judge in Japan to kick Karpeles out and put a trustee in.

Why would the big mining pools want to reduce their fees?

That site may be a scam.
No name. No address. Domain registered to "Whoisguard Protected" in Panama. No law firm.
Don't give them any account information.

Mt. Gox did not have, as far as anyone can tell, a CFO, a controller, an inside auditor, or an outside auditor. That's how.

When you see a company set up like that, it's usually an indication that management is stealing.

It's one of Japan's six forms of bankruptcy. See the threads in Legal.

Civil rehabilitation in Japan doesn't stop everyone from suing. "Secured creditors" can still sue. It's more limited than US Chapter 11 in that respect. Whether Mt Gox depositors are secured creditors is a very important legal question. Given Mt. Gox's terms of service and the Japan Payment Services Act, they probably are. That's a key issue. Does anyone have a lawyer working on that?

Also, there should now be a court-appointed supervisor overseeing Mt. Gox's activities. Who are they? How do you contact them?

Good point. Kraken isn't any better. Where are they, exactly? And read their terms of service:
" TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL THE AGGREGATE LIABILITY OF Payward (INCLUDING OUR DIRECTORS, MEMBERS, EMPLOYEES AND AGENTS), WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE, WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABILITY, STRICT LIABILITY OR OTHER THEORY, ARISING OUT OF OR RELATING TO THE USE OF, OR INABILITY TO USE, Payward OR TO THESE TERMS EXCEED THE FEES PAID BY YOU TO Payward DURING THE 12 MONTHS IMMEDIATELY PRECEDING THE DATE OF ANY CLAIM GIVING RISE TO SUCH LIABILITY.

Only a scumbag would have terms of service like that for a depository institution.

Coinbase is buying at $578. Last October, Bitcoin was around $100.

Now that the whole China thing is over, it's surprising that the price of Bitcoin is still as high as it is. The big runup was because Bitcoins could be used as a legal way around China's exchange controls. Once the People's Bank of China stopped that, the price went down, but it's still 5x higher than it was before the China runup.

So quit whining.