Legal Research

[LegalEagle]

The intangible asset classification (like goodwill) raises the question whether any (all?) digital money would be classed as intangible wouldn't it?

FASB and IFRS are standards not law. More error from the fledgling Legal Beagle.

You, sir, are in over your head on this topic.  Allow me to shut you down:

(1) The SEC is an administrative agency.
(2) SEC makes administrative law, which is a very important part of the legal spectrum
(3) The SEC requires certain entities to use GAAP (Generally Accepted Accounting Principals) in their financial reporting
(4) GAAP contains Goodwill reporting requirements
(4.1) Incidentally, FASB is responsible for establishing GAAP.

But keep it up with the creative nicknames.  Really effective logic there.

[Serith]

Assuming that a particular law has to be enforceable to have any meaning, would it be possible to enforce anything in case bitcoins considered "property"? If not, shouldn't bitcoins be considered "not property" on that basis alone?

Of course it would be possible to enforce a judgment.  Judgment liens and jail time make the court system quite coercive. 

That's why technical details matters. For example, in a lot of cases you won't be able to prove that a person received any bitcoins, and it would be funny to try to coerce the person to give up bitcoins when you don't know if he has it.

[LegalEagle]

Assuming that a particular law has to be enforceable to have any meaning, would it be possible to enforce anything in case bitcoins considered "property"? If not, shouldn't bitcoins be considered "not property" on that basis alone?

Of course it would be possible to enforce a judgment.  Judgment liens and jail time make the court system quite coercive. 

That's why technical details matters. For example, in a lot of cases you won't be able to prove that a person received any bitcoins, and it would be funny to try to coerce the person to give up bitcoins when you don't know if he has it.

In a lot of cases you aren't able to prove a person has received cash either.  Doesn't change much. 

[marcus_of_augustus]

The intangible asset classification (like goodwill) raises the question whether any (all?) digital money would be classed as intangible wouldn't it?

FASB and IFRS are standards not law. More error from the fledgling Legal Beagle.

You, sir, are in over your head on this topic.  Allow me to shut you down:

(1) The SEC is an administrative agency.
(2) SEC makes administrative law, which is a very important part of the legal spectrum
(3) The SEC requires certain entities to use GAAP (Generally Accepted Accounting Principals) in their financial reporting
(4) GAAP contains Goodwill reporting requirements
(4.1) Incidentally, FASB is responsible for establishing GAAP.

But keep it up with the creative nicknames.  Really effective logic there.

Just fyi ... GAAP were suspended at the height of the financial crises in 2008 ... I'm not sure if they have been re-instated ... hey maybe there's some really useful research you could do for society?

Find out what the status is of GAAP being applied to major banking institutions, particularly with regards to the "mark-to-market" or "mark-to-model" rules of MBS held by the off-balance sheet entities of Goldman Sachs, JP Morgan Chase .... the public really got screwed over on that one, go at it!

Seeing as you seem to have abandoned doing anything novel in the Bitcoin field, since
"I've talked to a lot of professors and practicing attorneys in the last week or so, and they all agree that the attachment of property rights to bitcoin is so obvious that it is barely even a legitimate question."
is probably not really "Legal Research", and probably not any more conclusive than hearsay.

[LegalEagle]

"I've talked to a lot of professors and practicing attorneys in the last week or so, and they all agree that the attachment of property rights to bitcoin is so obvious that it is barely even a legitimate question."
is probably not really "Legal Research", and probably not any more conclusive than hearsay.

It's immensely more conclusive than anything that's been said here, considering nobody here studies property rights all day long.

[Serith]

Assuming that a particular law has to be enforceable to have any meaning, would it be possible to enforce anything in case bitcoins considered "property"? If not, shouldn't bitcoins be considered "not property" on that basis alone?

Of course it would be possible to enforce a judgment.  Judgment liens and jail time make the court system quite coercive. 

That's why technical details matters. For example, in a lot of cases you won't be able to prove that a person received any bitcoins, and it would be funny to try to coerce the person to give up bitcoins when you don't know if he has it.

In a lot of cases you aren't able to prove a person has received cash either.  Doesn't change much. 

Pirate@40 who is possibly Trendon Shavers, organized pyramid scheme and run away with the money, is there a record you can rely upon to prove how much any particular investor lost?

[LegalEagle]

All you need to do is prove your claim by a preponderance of the evidence.  So as long as you can gather enough evidence (emails, messages, etc), you have a case.  Didn't say it was easy, though.

[not legal advice and is in no way intended to be relied upon]

[blakdawg]

There are property rights in WoW gold (subject to your contract with Blizzard), why should this be any different?  

Do you have a cite handy for that? I can't seem to find any article - scholarly or otherwise - that reaches that conclusion.

I've talked to a lot of professors and practicing attorneys in the last week or so, and they all agree that the attachment of property rights to bitcoin is so obvious that it is barely even a legitimate question . . . . If you guys still don't agree, that's fine, you can just wait for the first court case involving bitcoin.

Well, that's the tricky part, right? Many people agree that taking someone else's BTC is wrong, and is (or should be) illegal.

The question is, how do we get there from here?

If A transfers B's BTC's to C, without B's permission, is that a crime? If so, what crime? Is it a civil wrong, is that a tort, or based on some sort of contract, or a statutory wrong, or ..?

If A defrauds B out of some BTC (assuming all of the other elements of fraud are present), has anything really happened?

In the course of trying to track down your reference to property rights in WoW gold, I ran across these articles, which don't appear to answer the question, but may be of interest to others:

http://www.bu.edu/law/central/jd/organizations/journals/bulr/volume85n4/Fairfield.pdf
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=962905
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1469299
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1092284
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=981755
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1100302

[LegalEagle]

The WoW gold thing was suggested by a property professor and mentioned by an attorney.  There is no caselaw regarding Blizzard specifically, but the idea behind it is that WoW gold is a contractual right with Blizzard.  This contractual right is alienable, subject to the terms and conditions of your contract with Blizzard.  Contractual rights have long been recognized as property rights, and can usually (not always) be bought and sold unless otherwise agreed to in the contract.  Granted, BitCoin is different from WoW in that there's no central party that you are contracting with.  But the only real difference between contractual rights with Blizzard and BitCoin is that they're different types of intangible asset.  There are many, many different types of intangible assets.

Hopefully everybody has gotten past Sunnankar's rhetoric and realized that his argument is completely moronic.

The question is, how do we get there from here?

If A transfers B's BTC's to C, without B's permission, is that a crime? If so, what crime? Is it a civil wrong, is that a tort, or based on some sort of contract, or a statutory wrong, or ..?

If A defrauds B out of some BTC (assuming all of the other elements of fraud are present), has anything really happened?

In the course of trying to track down your reference to property rights in WoW gold, I ran across these articles, which don't appear to answer the question, but may be of interest to others:

Yes, it's a crime and intuitively it would seem that you would sue for conversion (a tort) if someone stole them.  Even if - say - I have 1000 BTC and I give you access to my account and you steal them all, it's still a crime and you're liable to me.  I imagine it would probably be classified as some type of bailment situation.

Obviously if you defraud someone out of BTC you're liable to them.  If BTC had no value, none of use would be here right now.  The courts aren't just going to let you defraud someone out of valuable property.

[not legal advice and is in no way intended to be relied upon]

[dentldir]

Along the WoW gold lines.  I found this to be an interesting read:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1805853

Also, it seems you can do better than conversion if the "theft" of the private keys/wallet.dat is involved.  Identity theft statutes are nice and specific about "stealing" an account number, password, PIN number, or "instrument identifier" to misappropriate "anything of value".

[marcus_of_augustus]

Well there would be all the usual laws surrounding illegal use of a computer, etc, etc anyway if your machine/account was hacked anyway.

That doesn't mean that bitcoins are property ... just that your computer/account was broken into.

[dentldir]

Well there would be all the usual laws surrounding illegal use of a computer, etc, etc anyway if your machine/account was hacked anyway.

That doesn't mean that bitcoins are property ... just that your computer/account was broken into.

Agreed.  Still not property.

Although, the identity theft laws, which are relatively new in the whole scheme of things, are a step beyond just hacking in.  They particularly mention the use PINs/Passwords/Account Numbers/Instrument Identifiers for unauthorized electronic transfers of anything of value.  So that kicks it up from a civil to a criminal case by my read.

[LegalEagle]

Are you guys really suggesting that there would be no way to recover stolen bitcoins in civil court?    What about fraud, that doesn't involve an illegal use of a computer? 

Do you really think a judge would allow you to defraud someone of $10k in bitcoins and say, "oh sorry, it's not fraud because you didn't take anything of value"??

[dentldir]

I'm not saying that at all.  I'm saying that standard for the criminal case is easier to meet.

I think the defense can build a very strong case in a fraud situation.  The defense can claim that they never received any Bitcoins, do not own any of the plaintiffs Bitcoins, and have no knowledge of what the plaintiff did with their Bitcoins.  At this point the mechanics of Bitcoin matter because the prosecution has to prove actual damages.  Depending on how smart the fraudster was, establishing that proof could be very difficult.

[LegalEagle]

First of all, just because it's difficult to prove theft doesn't mean it's not property.  Also, you're getting into difficulty of proof, which is irrelevant to what the law is.  

Second, how can you argue that you don't have property rights in BitCoin and then turn around and say you could recover for them in a civil action?  You're contradicting yourself.  You can't recover a judgment for theft of something you never had any rights to in the first place.

[dentldir]

First of all, just because it's difficult to prove theft doesn't mean it's not property.  Also, you're getting into difficulty of proof, which is irrelevant to what the law is. 

Second, how can you argue that you don't have property rights in BitCoin and then turn around and say you could recover for them in a civil action?  You're contradicting yourself.  You can't have damages for fraud if you never had any property rights in your swindled bitcoins in the first place.

To be clear, I'm saying that the property rights for Bitcoin don't have a clear path of precedence to support them in current law.

I'm also saying that the criminal charges only have to do with stealing the account information for anything of value for something that is not yours.

I also said that the civil case is very hard to defend.  I personally said nothing about recovery.  Maybe I wasn't clear in my example.  The defendant is the fraudster.

Difficulty of proof may not apply to what the law "is", but surely determines how you would represent a client.

[blakdawg]

Are you guys really suggesting that there would be no way to recover stolen bitcoins in civil court?    What about fraud, that doesn't involve an illegal use of a computer? 

Do you really think a judge would allow you to defraud someone of $10k in bitcoins and say, "oh sorry, it's not fraud because you didn't take anything of value"??

I'm not saying that, but I am saying that the plaintiff's attorney or the prosecutor will need to be prepared to give the judge a brief with something better than "obviously . . ." and "a bunch of professors and attorneys think . . . ", and I think it would be pretty interesting to imagine what, exactly, that brief will say.

I am not saying that BTC is the same as points in sports - but, let's say that in the upcoming World Series, an umpire makes a call that effectively hands one team a win and the other a loss. Can the losing team successfuly go to court and ask the judge to order MLB to award them an extra point, or a do-over on a particular pitch? No - if they tried, the judge would tell them to go away, even though there's a lot at stake, the court is not going to get involved with the internal governance of a game or a sport.

I'm not so sure the result wouldn't be the same if there were a dispute about WoW gold or other game accomplisments/awards - I am not nearly as confident that you are that there are any contractual rights in WoW gold, and that if there are, that a court is going to impose its judgment over that of the owner/publisher/operator of the game.

There are some people who want to say that BTC is essentially a giant game like WoW - personally, I think that argument will not be successful, but all of us (pro- and con-) are going to have to come up with something better than "obviously, my position is correct" if we want to prevail in court.

I also see a tremendous difference between a Player v. Blizzard dispute about WoW gold, and a User v. User dispute about BTC - in the first case, there's a contract/TOS, and the court can order Blizzard to simply credit the player's account with extra gold. Regarding BTC, it can't simply be created out of thin air (other than mining), so for one guy to get more, someone else has to have less.

I gather that I ultimately agree with you about the correct answer for many of these questions - but I have yet to find a judge who will go along with something merely because a brief recites that the desired result is "obvious" or "clear"; in fact, my experience has been that the more often terms like that appear in a letter/brief/conversation, the less clear or obvious the proposition is that is being advocated.

[LegalEagle]

There are no cases involving bitcoin, so you couldn't use them in a brief. All you could do is make the plethora of arguments that I've made throughout this thread, and wait for the judge to agree with one of them.

[blakdawg]

There are no cases involving bitcoin, so you couldn't use them in a brief.

Then how do you suppose the law is applied to new things/ideas?

Do you think that when the first cases were argued regarding telephones, that the attorneys and judges involved said "well, we've got no appellate caselaw about telephones, so there's no need for briefs, we'll just make some shit up"?

HINT: This is a question that can be answered with research.

ANOTHER HINT: The answer starts with "no, that's not what they did."

All you could do is make the plethora of arguments that I've made throughout this thread, and wait for the judge to agree with one of them.

You have not made arguments, you have reported on comments made by unidentified professors and lawyers and you have said that the correct outcome is "obvious". While taking a survey of people with training or experience may be a good way to predict future outcome(s), it is not a substitute for actual reasoning.

Perhaps that's all that you can do right now, but you should not imagine that your limitations are universal.

I suspect that as your education continues, you will reach a point where you are capable of coming up with arguments about how and why existing legal doctrines can and should be extended (or not) to fit new situations or technologies.

[marcus_of_augustus]

Came here looking for the silver spoon-feeding ... got the wooden spoon-paddling instead