Make sure you read the book on this one.  The documentary leaves out an awful lot of really important stuff.  I think it's the most relevant to Bitcoin on so many different levels out of the books suggested.


You already have default legal recourse in Japan through the insolvency proceedings.  Nobody can really advise you whether it's "worth" taking legal action outside of those proceedings.  Someone in Japan is probably going to get a lot better advice about that from local litigation lawyers than someone in the US or the UK, though (my understanding is that Japan doesn't have class actions as such - it has multi-plaintiff actions and those have their own set of rules).

My understanding is that the US government is looking at the whole issue of crowd funding, so for smallish enterprises not looking to raise large amounts of capital that might provide some options.

I'm not a huge fan of "start-ups" with no business experience and no backers being able to go the IPO route straight off - I think there's a need for an intermediate alternative which allows those seeking smallish amounts of capital to raise funds from the public while forcing them to constantly remind their "investors" that the venture is very high risk and there's a good likelihood they'll see no return.

The Japanese court will have the power to locate and pursue assets (even offshore assets - note that MtGox included those in their Crisis Strategy so they've almost certainly included them in the filings).  It's not uncommon for there to be multiple companies involved in insolvency cases nor for assets to be located offshore.  It's not uncommon for funds to have been converted into something else, either (there are plenty of untraceable things which can be bought, regardless of what you use to purchase them).

The wild cards are personal liability - ie, can Mark and Jed be found personally liable for the losses and their assets attached (this can happen under certain circumstances in other jurisdictions) by the supervisor/trustee - government seizure, and whether BTC liabilities will be rolled into the civil rehabilitation (it can't possibly work if they are, so civil rehabilitation would just become the scenic route to liquidation).  We have no idea what proportion of remaining MtGox assets might be vulnerable to seizure by authorities (Japanese or foreign) in relation to criminal offences.  The US, at least, pursues asset substitution if it can't locate specified assets - meaning that it will seize something else of similar value (even if that thing is legally obtained) to assets it can't locate.

This is new ground and old ground at the same time.

I think you're misunderstanding the point he's trying to make.  You can sue in another jurisdiction for negligence, conversion, breach of contract, etc and win, but your judgement doesn't give you a superior claim in the insolvency proceedings (and under UN model law many nations actually take into account insolvency proceedings in another jurisdiction when determining litigation in their own backyard).  

MtGox is actually prohibited by law from paying any of their creditors at this point.  The insolvency is taking place under Japanese law, which effectively means that MtGox assets are now under the control of the Japanese legal system (via those appointed by the court).  No-one's getting more than other creditors unless they can establish themselves as a preferential/secured creditor (under the criteria required by Japanese law) or unless they pursue assets which aren't under the control of the Japanese legal system.

Also, the point of litigation is rarely to go to trial.  In the vast majority of cases the plaintiffs are hoping to force a settlement offer - something insolvent companies aren't in a position to make without the approval of the courts in the jurisdiction where their insolvency proceedings are taking place.

What people seeking to sue in other jurisdictions are hoping to do is inflate their claim by punitive/exemplary damages in the hope of recovering a larger portion of their losses than other creditors.  It's a trick as old as the book.


This is kind of interesting because elsewhere the fees of those appointed by the court are paid out of the insolvency estate (the hourly rate they can charge is set - it's hundreds of dollars per hour here plus additional fees for administrative staff, accountants, etc).  Are you saying that even if this takes thousands of hours of work to sort out (which it may well do) and the cost runs into millions, the government will pay for that and not a cent of those fees will come out of the remaining assets of MtGox?

You do realise that the laws regarding how various types of insolvency proceed and how creditors can take swap debt for equity existed long before Bitcoin and Bitcoin exchanges?

And yeah, it is quite typical for specific information related to criminal investigations to be with-held unless law enforcement believes that disclosing it prior to charges being laid would assist their investigation.

Frankly, if I was Mark I wouldn't even talk to people like anarchystar.  No creditor or group of creditors is entitled to an advantage over other creditors of the same class and trying to subvert the insolvency process can lead to the claims of such people being subordinated. Veiled threats should be brought to the attention of those supervising the insolvency process - the people making them aren't doing so for the benefit of all creditors, only themselves.

Also, this link from reddit suggests that anarchystar is behind mtgoxrecovery.com (who've repeatedly refused to disclose who is behind them), a BF forum thread promoting them was made by Olivier Jenssens although yet again no information was forthcoming about who was behind them and their broader intentions.

pastebin.com/1M0Qn59u

There are already companies which offer this service.

http://www.globaldatacompany.com/

Whether or not centralised ID verification services are a good idea is another issue.

There was some British lawyer spamming all over reddit.  It's worth remembering that MtGox couldn't pay you even if they wanted to right now - the terms of their civil rehabilitation not only stay any legal proceedings against them at the moment but they also restrain MtGox from making payments to creditors.


My all means seek legal advice on your options, but make sure you're not not being misled into taking futile legal action.

Isn't the Polish address just a registered office and not an actual business office?  

I think all support is handled out of Japan.  It's unlikely that the funds which are in their Polish bank account are going to be treated differently to the funds in their Japanese bank account.  They seem to have counted all of their bank accounts in their assets so your deposit is probably now tied up in the insolvency process.

You might find this thread helpful. 

https://bitcointalk.org/index.php?topic=488883.0

According to statements by MtGox, they have 127,000 creditors.  You might have noticed that people who are owed money by MtGox cannot come to a consensus about how the situation should be best approached, and those people have the possibility of invoking varying levels of actual authority.

Do you really believe that "the Bitcoin community" - a diverse group with widely varying agendas - would reach a consensus on this?  Even if they did, they have no authority over miners.  How would you even know that a consensus had been reached?  "The Bitcoin community" includes far more people than those who post here and on reddit.  Are miners supposed to just listen to the loudest voices?

You talk about "supporting law enforcement", but you're really talking about taking an action without even consulting them.  Do you think they're not capable of asking the devs whether or not it's possible for Bitcoin addresses to be "frozen" if they believe that's a desirable option?  It takes legal authority to freeze bank accounts, but what your proposing is freezing funds with no legal authority whatsoever based on no evidence whatsoever - the kind of thing this community would be outraged by if it was done by a conventional financial service.

Seriously, many of the proposals to "help law enforcement" I've seen over the last few days seem far more likely to hinder any investigation than anything else.  Y'all need to step back and let investigators do their thing working within the law because if one of you idiots fucks up the legal cases against MtGox in your quest to play Ellery Queen, nobody is going to give a shit that you had "good intentions".

I thought they were just leaving Bitcoin Foundation in order to set up a UK-based international Bitcoin body.  If you consider them incompetent or undesirable representatives of Bitcoin at a national level, then them representing it at an international is hardly a positive thing.

What's frightening is that it's not uncommon. Operating a successful business involves doing a hell of a lot of tedious shit, more and more of it as the business gets bigger.  You can't just ignore that shit and you can only delegate so much of it to other people but the more you play the "successful entrepreneur" game the less likely it is that people will call you on your bullshit - or the more likely it is that you'll dismiss any criticism because you think you're smarter than everyone else.

A lot of people get hooked on "being a CEO" and all the trappings, which isn't the same thing as being a successful business person.

These teasers are tedious.  If you've got an announcement to make, then just make it.

Not only would you not be "assisting the legal process", you would almost certainly be breaking the law because you'd be denying people access to accounts without any legal authority to do so and without any conclusive evidence of who owns those accounts.

Law enforcement and other investigators already have the power to seek injunctions which restrain MtGox principals from moving BTC from company and/or personal accounts.  They can almost certainly obtain court orders compelling the principals to give them access to those accounts if they deem that to be necessary (and failure to do so under those circumstances would put the principals in contempt and subject to penalties).  The community has not such authority and nor should it.

The 777 transactions were an attempt by people to follow Bitcoin transactions related to a recent Silk Road theft (SR admins claim that all of their BTC were stolen by someone exploiting the malleability issue).  They used 777 because 666 had already been used previously to try to follow BTC from another theft (sheep marketplace, IIRC).

There are threads on the SR forums about the 777 tag and on reddit about the 666 tag.

Those numbers don't include BTC at all.  That's their fiat assets and liabilities expressed in yen.

Setting up separate contact numbers and addresses is standard in crisis management.  Implemented by anyone except MtGox, it would be a positive thing.

As to your suggestion of "figure out whats left, and split it up proportionally. Thats the best solution for everyone", that was never a realistic option.  This was always going to be sorted out by one legal process or another and under rules which are not of MtGox's choosing or the choice of its users.  There's going to be a lot more "leaking money" before this is done.  A hell of a lot of professionals who get paid hundreds of dollars per hour are going to be involved in untangling this - a few minimum wage call centre staff are the least of anyone's worries.

From a redditor who got through.

www.reddit.com/r/Bitcoin/comments/1zea3x/rough_transcript_of_my_call_with_gox/

You realise that the people answering the phones are likely to have a set script and stock answers to a limited range of questions?  It's not going to be staffed by high level MtGox employees who have access to the financial records.

Asking call centre staff questions they can't answer isn't going to prove a point or get people any closer to recovering funds, it's just going to convince MtGox that a call centre is a waste of time and money and that there are better ways to collect the information they need to collect and to convey the information they're obliged to convey.

Any answer you get on here is going to be pure speculation by people who have no direct involvement or experience with the Japanese legal systems.

Nobody knows how this is going to play out.  No matter how much you want someone to tell you that you might recover some funds, anyone who tells you that is just telling you want you want to hear.  There's simply not enough information available for people to make educated guesses right now and there are many factors which could change the possibilities.


I'm inferring from the MtGox announcement that there is a supervisor.  The announcement specifically states that customers should direct their questions to the call centre rather than the supervisor/investigator.  

The quickest way to get information about the supervisor is probably to contact one of the journalists who has been covering this.  It will be a matter of public record and organisations like the WSJ will probably get their hands on the filings quickly.  I'd just keep tweeting the various outlets which have been covering this.  One of them is likely to publish the filings sooner rather than later and it's probably going to be a quicker way of getting the information than retaining a Japanese lawyer to get it for you.

Also Nagle, do you have any information on payment for supervisors/trustees under the Japanese system?  I didn't really look into that in any depth so I'm unclear about whether the company is billed for their services (and the services of those assisting them) at an hourly rate as is the case here.

And the answers to many of those questions simply aren't going to be available any time soon.  This isn't an episode of CSI.  It's going to take investigators a long time to piece together exactly what has been going on at MtGox. 

Even if MtGox tells investigators the absolute truth about everything, until investigators have been able to verify that information your questions will go unanswered.  This isn't something a team of forensic accountants can sort out in a week.  It could be months before your questions can be conclusively answered.

Y'all need to stop playing Nancy Drew and realise that this isn't a TV series where the plot gets wrapped up in a few episodes.  A proper investigation will take as along as it takes and you need to get out of the way and let investigators do their jobs.