Did Karpeles lie?

[prophetx]

So the way Coinlab operates is perfectly acceptable I guess? Just buying a large amount of bitcoins from a variety of sources, then sell to customers at whatever price they deem to be profitable?

That isn't a MSB, it is a company that sells something that falls in the default category of goods/services.
To be specific, what they sell is the service of digitally signing chunks of data that have some mutually-agreed-upon properties.

If they are providing transmission or store of value, they need to register.  At least that is the case in California.  FinCen gives you 180 days...

[ArticMine]

MtGox does way more that just provide a platform for trading Bitcoins. They are also in the money transmission business according to their TOS. If I can copy and paste these terms so can an officer at the US DHS. https://mtgox.com/terms_of_service.

PLATFORM TRANSACTION PROCESS FOR BITCOIN TRANSFER TRANSACTIONS

Members may at any time transfer any amount of Bitcoins to any other Members as well as any other Bitcoin users even if they are not Members (the “Transferee”).

Bitcoin Transfer Transactions may be initiated at any time from the following page: https://mtgox.com/index.html. Transferees shall be identified by their bitcoin address.

Members shall be solely responsible for ensuring that any transfer of Bitcoins to a Transferee shall be a valid and legal transaction not infringing any laws including money-laundering laws and regulations.

Mt. Gox’s responsibility shall be limited to using reasonable technical efforts to ensure the receipt of the Bitcoins transferred. When conducting Bitcoin Transfer Transactions with a Bitcoin user who is not a Member, Mt. Gox’s responsibility shall be further limited to ensuring the transfer of the necessary technical data to the Bitcoin peer-to-peer network.

No Commission of any kind will be charged by Mt. Gox for Bitcoin Transfer Transactions.

PLATFORM TRANSACTION PROCESS FOR CURRENCY TRANSFER TRANSACTIONS

Members may at any time transfer any amount of currencies held on their Account to any other Members (the “Transferee”). Transfers to third parties who are not Members is not possible.

Currency Transfer Transactions may be initiated at any time from the following page: https://mtgox.com/index.html. Transferees shall be identified by their Account name.

Members shall be solely responsible for ensuring that any transfer of currencies to a Transferee shall be a valid and legal transaction not infringing any laws including money-laundering laws and regulations.

Mt. Gox’s responsibility shall be limited to using reasonable technical efforts to ensure the receipt of the currencies transferred.

No Commission of any kind will be charged by Mt. Gox for Currency Transfer Transactions, except when the Account of the Transferee is set up in a currency different than the currency transferred (in which case the 2.5% Commission shall automatically apply).

I will leave it to reader to judge if Karpeles did lie after reading the above.

[oakpacific]

MtGox does way more that just provide a platform for trading Bitcoins. They are also in the money transmission business according to their TOS. If I can copy and paste these terms so can an officer at the US DHS. https://mtgox.com/terms_of_service.

PLATFORM TRANSACTION PROCESS FOR BITCOIN TRANSFER TRANSACTIONS

Members may at any time transfer any amount of Bitcoins to any other Members as well as any other Bitcoin users even if they are not Members (the “Transferee”).

Bitcoin Transfer Transactions may be initiated at any time from the following page: https://mtgox.com/index.html. Transferees shall be identified by their bitcoin address.

Members shall be solely responsible for ensuring that any transfer of Bitcoins to a Transferee shall be a valid and legal transaction not infringing any laws including money-laundering laws and regulations.

Mt. Gox’s responsibility shall be limited to using reasonable technical efforts to ensure the receipt of the Bitcoins transferred. When conducting Bitcoin Transfer Transactions with a Bitcoin user who is not a Member, Mt. Gox’s responsibility shall be further limited to ensuring the transfer of the necessary technical data to the Bitcoin peer-to-peer network.

No Commission of any kind will be charged by Mt. Gox for Bitcoin Transfer Transactions.

PLATFORM TRANSACTION PROCESS FOR CURRENCY TRANSFER TRANSACTIONS

Members may at any time transfer any amount of currencies held on their Account to any other Members (the “Transferee”). Transfers to third parties who are not Members is not possible.

Currency Transfer Transactions may be initiated at any time from the following page: https://mtgox.com/index.html. Transferees shall be identified by their Account name.

Members shall be solely responsible for ensuring that any transfer of currencies to a Transferee shall be a valid and legal transaction not infringing any laws including money-laundering laws and regulations.

Mt. Gox’s responsibility shall be limited to using reasonable technical efforts to ensure the receipt of the currencies transferred.

No Commission of any kind will be charged by Mt. Gox for Currency Transfer Transactions, except when the Account of the Transferee is set up in a currency different than the currency transferred (in which case the 2.5% Commission shall automatically apply).

I will leave it to reader to judge if Karpeles did lie after reading the above.

What's the currency transfer they did? Coupon code redemption? I never remember a time when I can transfer my fiats on Gox to another user in any other way.

[davout]

What's the currency transfer they did? Coupon code redemption? I never remember a time when I can transfer my fiats on Gox to another user in any other way.

There are the coupons, but you also transfer fiat when you exchange.

[oakpacific]

What's the currency transfer they did? Coupon code redemption? I never remember a time when I can transfer my fiats on Gox to another user in any other way.

There are the coupons, but you also transfer fiat when you exchange.

He refers to the TOS, which talks specifically about "currency transfer" besides "bitcoin transfer", if it's only done through bitcoin then I think it quite a bit redundant, and with bitcoin the so-called "same-platform" restriction is useless.

And what's with the 2.5% commission? I can never seem to find such a rate.(yes I routinely "transfer" between my USD/EUR/GBP accounts)

[davout]

What's the currency transfer they did? Coupon code redemption? I never remember a time when I can transfer my fiats on Gox to another user in any other way.

There are the coupons, but you also transfer fiat when you exchange.

He refers to the TOS, which talks specifically about "currency transfer" besides "bitcoin transfer", if it's only done through bitcoin then I think it quite a bit redundant, and with bitcoin the so-called "same-platform" restriction is useless.

And what's with the 2.5% commission? I can never seem to find such a rate.(yes I routinely "transfer" between my USD/EUR/GBP accounts)

I guess it's just the coupons then.

[oakpacific]

What's the currency transfer they did? Coupon code redemption? I never remember a time when I can transfer my fiats on Gox to another user in any other way.

There are the coupons, but you also transfer fiat when you exchange.

He refers to the TOS, which talks specifically about "currency transfer" besides "bitcoin transfer", if it's only done through bitcoin then I think it quite a bit redundant, and with bitcoin the so-called "same-platform" restriction is useless.

And what's with the 2.5% commission? I can never seem to find such a rate.(yes I routinely "transfer" between my USD/EUR/GBP accounts)

I guess it's just the coupons then.

Yes, but still the 2.5% commission part is not clear, I have never been able to move USD to EUR or vice versa with coupon, to my best knowledge it's not allowed, maybe it's deprecated long ago and they are just too lazy to update the TOS.

[ArticMine]

IANAL  It is the coupons, both BTC and USD. It can also happen if the exchange allows the withdrawal of BTC to a Bitcoin address not under the account holder's ownership and control.  The transfer of funds that are incidental to an exchange of USD for BTC or vice versa do not make the exhange a MSB. The Fincen guidance in clear on that.

Now when it comes to the seizure I suspect a that a good lawyer may be able to quash the warrant on the grounds that no evidence of a MSB was actually provided to the judge.  To put it bluntly the DHS informant missed a crucial step namely the transfer of USD via a MTGox code or BTC via MtGox code or by a transfer to a Bitcoin address not under the control of the account holder to a third party.

[Terk]

I think the 2.50% cross-currency trading fee is pretty clear if you read the FAQ: https://support.mtgox.com/entries/20800336-Multi-Currency-Trading

You don't convert your money into another currency. You just place bids in whatever currency you prefer/have and all multi-currency bids go to one order book (and this is good as it allows matching your offer with the globally best offer, not only with offers in your currency - example below). The 2.50% fee is automatically added to the order book prices if a trade would be between two currencies.

For example. You want to buy 1 BTC with your EUR and let's assume for math simplicity that 1 EUR = 1.30 USD. There are two ask offers: 1) someone offering 1 BTC at 130 USD; 2) someone offering 1 BTC at 105 EUR. If there were separate order books for separate currencies, you would need to buy at 105 EUR. But what actually happens at MtGox is that 1) offer is converted to EUR, so 130 USD price becomes 130/1.30+2.50% = 102.50 EUR (already including the 2.50% fee). This is your best match so you buy your 1 BTC for 102.50 EUR. 100 EUR of that is converted to 130 USD and goes to the seller. 2.50 EUR goes to MtGox as the 2.50% fee. This is why you don't see that fee as a separate operation - it's simply included in the EUR-denominated price when matching offers. If there were another ask order available: 3) someone offering 1 BTC at 100 EUR, this would be your best match and you would buy at 100 EUR without currency conversion fee as there would be no cross-currency trading.