CoinLab suing MtGox for $75 milliion?

[Inedible]

Not the first time the login on the front page has broke, just saying. Whenever they are under high load the ajax stuff starts to time out.

There's very little trading going on at the moment.

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[repentance]

I'm still reading, but so far, it looks like the suit will likely be tossed.  The contract will likely be nullified.

Your bank, brokerage, etc, etc, can't just sell your account to someone else, and a contract to do so would not be valid.  There are complicated hoops that you have to jump through for that.

Lawsuits are about forcing the other party to the negotiating table.

Banks take over the customers of other banks all the time, so I wouldn't assume a priori that this is a frivolous lawsuit.  Very often the ToS of financial institutions state that they can pass your information to third parties to provide services on their behalf (remember that this is what we were told the deal was - and the complaint tends to support that) as long as the third parties adhere to the same data protection standards.  

Where there's some confusion is that MtGox originally said US customers would need to agree to new ToS with CoinLab whereas CoinLab's website said customer funds would be automatically migrated without customers doing anything - so there was no "opt-out" provision.

Yes, unless all compliance issues in all countries were resolved, the contract is void. Also they can file they all want in USA, MTgox has no exposure in USA.

Without reading the original agreement - which is presumably among the exhibits - we don't know which jurisdiction governs the agreement.  It's not like it's impossible to get a court order domesticated in another country (and for tens of millions of dollars, you'd bother doing so).

I very much doubt that MtGox has anything approaching $75 million, though so the question becomes what non-cash assets the plaintiffs would be willing to accept in settlement.

While I was willing to take a two year restriction on our venue (US and Canada only for two years was part of our contract), I have for a number of years now wanted to make sure that Bitcoin is properly situated for everyone's good.

So the deal allowed CoinLab to service customers outside of the US and Canada after the first two years.

[Epinnoia]

I'm still reading, but so far, it looks like the suit will likely be tossed.  The contract will likely be nullified.

Your bank, brokerage, etc, etc, can't just sell your account to someone else, and a contract to do so would not be valid.  There are complicated hoops that you have to jump through for that.

I am sure there are hoops, but they can certainly sell your account to someone else -- and without any input or say-so from you, the customer.  This has occurred to many of us who have had the misfortune to bank at a brick-and-mortar bank -- only to see it bought up by a mega-bank.

Surely you see the difference.  Selling an account is one thing.  Selling a bank is a whole 'nother story.

No, actually -- I see little difference.  I can use my experience with Verizon as an example.  They sold a PORTION of their customers to Frontier.  

[toffoo]

It's on PACER, had to go directly to West Washington DC's site, and search 'Coinlab'. I just RECAP'd* the complaint so we can all read it (doc 1): http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.docket.html

There's a much larger exhibits file, if anyone has a fresh PACER account and wants to RECAP it too. I don't want to go over my free PACER threshold.

The cover sheet is typically just court clerk business, uninteresting.

The Praecipe for Summons is the initial request by one side to ask the Clerk to issue a Summons to the other side in a lawsuit.

* https://www.recapthelaw.org/

Thanks.

Interesting side effect of this little spat is that the original Mt.Gox/Coinlab License Agreement is now public knowledge:

http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.1.1.pdf

[Chakraball]

Posted in another thread about the same issue:

http://coinlab.com/status

How to make a statement and say nothing.

He should be in politics.

[Loozik]

Is anyone from outside the USA able to login from the main landing page?  Or does the script error on the main landing page affect everyone, regardless country?

Poland cannot login from the main page either.

[roy7]

Well that's a bummer. I was looking forward to having a fincen-compliant exchange tied to a US bank, which should make transferring funds in/out much easier. (Or heck, open an account with the bank itself.)

[mem]

I'm still reading, but so far, it looks like the suit will likely be tossed.  The contract will likely be nullified.

Your bank, brokerage, etc, etc, can't just sell your account to someone else, and a contract to do so would not be valid.  There are complicated hoops that you have to jump through for that.

Yep, sounds like Coinlab is run by a bunch of greedy litte bitches.

the point of contention:

"Defendants have breached the exclusivity provisions of the Agreement by directly servicing customers in the United States and Canada since the Agreement took effect,"

Basically coinlab must of expected mtgox to freeze all North American accounts until they could be handed over to coinlab.
MTGox would have to be insane to do this as they would suffer a mass exodus of clients during the transition period.

[Inedible]

Basically coinlab must of expected mtgox to freeze all North American accounts until they could be handed over to coinlab.
MTGox would have to be insane to do this as they would suffer a mass exodus of clients during the transition period.

Shame Mt. Gox didn't pick up on that before signing the contract.

[bitcoinstarter]

Talking about crashing Bitcoins this will do it.

[BitcoinFlush]

When they sue, why not sue them for bitcoins?

[bitcoinstarter]

When they sue, why not sue them for bitcoins?

+ 1

[Epinnoia]

E. The Defendants Have Breached Other Provisions Of The Agreement.


27.
The Agreement further provides for a transition period whereby United States and Canadian customers are transitioned from Mt. Gox to CoinLab by March 22, 2013. Mt. Gox is required to cooperate with CoinLab to transfer
North American customers, defined as “CoinLab Customers” in the Agreement, from Mt. Gox to CoinLab.

28.
Mt. Gox has failed to cooperate in facilitating the timely and seamless transfer of CoinLab Customers to Coinlab since the Agreement took effect.

http://ia801700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.1.0.pdf

[DeathAndTaxes]

When they sue, why not sue them for bitcoins?

Bitcoins are not legal tender in the United States (or anywhere for that matter). 

Courts award damages in legal tender.  If I wreck your priceless antique car the courts can't force me to find another one, they can't however (if they find I am liable) award you damages in the value of the car. 

Courts ONLY award damages in legal tender.  If two companies had a dispute over gold, or computer chips, or barrels of oil the damages would only be in legal tender which for these United States is the Federal Reserve note.

[repentance]

When they sue, why not sue them for bitcoins?

Did you read the agreement?  It's written in USD.

ts. During each year of the Term, CoinLab shall reach the following minimum Revenue:
Yearl: US$310,000
Year 2: US$ 341,000 or 110% of the actual Revenue of Year 1, whichever is greater
Year 3: US$ 375,100 or 110% of the actual Revenue of Year 2, whichever is greater
Year 4: US$ 412,610 or 110% of the actual Revenue of Year 3, whichever is greater
Year 5: US$ 453,871 or 110% of the actual Revenue of Year 4, whichever is greater
Year 6: US$ 499,258 or 110% of the actual Revenue of Year 5, whichever is greater
Year 7: US$ 549,184 or 110% of the actual Revenue of Year 6, whichever is greater
Year 8: US$ 604,102 or 110% of the actual Revenue of Year 7, whichever is greater
Year 9: US$ 664,513 or 110% of the actual Revenue of Year 8, whichever is greater
Year 10: US$ 730,964 or 110% of the actual Revenue of Year 9, whichever is greater
Further, no later than 6 months prior to the end of any Term, the Parties shall agree on the minimum Revenue
applicable to the next Renewal Term. In case the Parties fail to agree on the minimum Revenue, the applicable
minimum Revenue during the next Renewal Term shall amount to the minimum applicable to the last year of the Term
increased by 10%.
Any failure by CoinLab to meet the targets for two consecutive years shall be considered a material breach of this
Agreement which shall give MtGox the right, at its convenience, either to terminate the exclusivity granted to CoinLab
under this Agreement or to terminate this Agreement. In the case where MtGox shall terminate the exclusivity granted
to CoinLab this Agreement shall continue to be in effect among the Parties except for this section J.
The obligation to reach the minimum Revenues defined herein shall apply even if CoinLab decides to provide the
Services on a CoinLab Website and even if CoinLab decides to provide services similar to the Services on a CoinLab
CoinLab, Inc.

[Maged]

E. Governing Law. This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of Washington. The parties hereby irrevocably consent to the personal jurisdiction of and venue in the state and federal courts located in King County, Washington with respect to any action, claim or proceeding arising out of or relating to this Agreement.

Looks like CoinLab managed to convince MtGox that the agreement should be under US jurisdiction. Impressive.

[pikeadz]

When they sue, why not sue them for bitcoins?

Bitcoins are not legal tender in the United States (or anywhere for that matter). 

Courts award damages in legal tender.  If I wreck your priceless antique car the courts can't force me to find another one, they can't however (if they find I am liable) award you damages in the value of the car. 

Courts ONLY award damages in legal tender.  If two companies had a dispute over gold, or computer chips, or barrels of oil the damages would only be in legal tender which for these United States is the Federal Reserve note.

This is true for judgments at law.  Not for judgments at equity.  Courts can get very creative with their judgments if you frame your complaint that way.

[Inedible]

E. Governing Law. This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of Washington. The parties hereby irrevocably consent to the personal jurisdiction of and venue in the state and federal courts located in King County, Washington with respect to any action, claim or proceeding arising out of or relating to this Agreement.

Looks like CoinLab managed to convince MtGox that the agreement should be under US jurisdiction. Impressive.

Seems like Mt. Gox lawyers were asleep at the wheel.

[myrkul]

When they sue, why not sue them for bitcoins?

Bitcoins are not legal tender in the United States (or anywhere for that matter). 

Courts award damages in legal tender.  If I wreck your priceless antique car the courts can't force me to find another one, they can't however (if they find I am liable) award you damages in the value of the car. 

Courts ONLY award damages in legal tender.  If two companies had a dispute over gold, or computer chips, or barrels of oil the damages would only be in legal tender which for these United States is the Federal Reserve note.

That said, I'd bet they'd accept payment in Bitcoins if offered.

[repentance]

That said, I'd bet they'd accept payment in Bitcoins if offered.

They might have a bit of trouble exchanging them if they put MtGox out of business.