[MTGox Sued 5/2/2013] Statement Regarding Formal Complaint

[mccorvic]

mtgox shot themselves in the foot on this one.

I'm surprised Gox has any foot left to shoot at all at this point...

[wtfvanity]

mtgox shot themselves in the foot on this one.

I'm surprised Gox has any foot left to shoot at all at this point...

Did Gox just Goxed themselves?

[HorseRider]

Read the red part carefully everyone. What do you think Coinlab is trying to suggest?


http://coinlab.com/status

I have more news on the Mt. Gox transition. Today, CoinLab regretfully filed a formal complaint in Federal Court against Mt. Gox.

In the last month, many of you have contacted me directly and asked for more details on our transition, and I would say (charitably) that I've been frustratingly vague -- I just haven't been able to talk about it.

I'm going to take this chance to talk about it. I'm not here to complain, our filing contains an accurate summary of events, but I want to talk about what I see as most important for Bitcoin right now.

Bitcoiners have, on average, lost more money due to technology difficulties, frozen / lost banking relationships and shady characters like pirateat40 than due to any part of Bitcoin's fundamental economics. I hate this fact, passionately. I have a vision in which high quality service and technology and ethics can be delivered to you, me, my kids, everyone who has a stake in Bitcoin.

It is my goal for CoinLab that we provide fundamental infrastructure to minimize these risks for everyone in our space, and I do mean everyone; from those on the Bitcoin Forums who dislike and distrust me personally, to the mom and pop cupcake makers in San Francisco, to my daughter who recently sold some knit products for .01BTC.

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.

When we spun up our initial alpha customers, they included companies that from one perspective could reasonably be deemed to be our competitors, some of the best companies in our space. We worked extremely hard to provide them great service, because I want to build our ecosystem; I want a robust economy and a broad base of service and product for everyone.

What tipped us into filing was our complete inability to get Mt. Gox to deliver on the few simple things left that were needed for customers to move over en-masse; we were often left just apologizing to our alpha customers while their own businesses suffered. I'm just not willing to put any of our customers in that position -- if we can't do a good job for you, I won't promise that we can.

What I hope is that Mt. Gox has this same interest in the good of Bitcoin, and Bitcoiners, and finds a way to work this out.

So, what's next? I hope that we'll be able to provide some good news on that front soon, from a financing and technology perspective at the very least, and ideally with news that we've settled this dispute. In the interim, my biggest hope is that Mt. Gox does an excellent job keeping Bitcoiners safe and liquid and trading on the exchange.

Peter Vessenes

[Stampbit]

And the price of coin plummets....

[wtfvanity]

And the price of coin plummets....

Yeah, cash out of your coins into USD that MtGox holds lol. Price should be sky rocketing while you get your coins out.

[Zeke_Vermillion]

It seems contrary to the spirit of bitcoin to resort to the courts over a purely commercial dispute. Absent some fraud or theft on the part of Gox, I would rather see this settled in private. That said, this raises the question of whether "exclusive license" means exclusive of the licensor...

Sorry, what? So, if I break into your house and steal the USB your private key is stored on (an example - I have no idea where you store your private key), you won't sue me or prosecute? You'll attempt to "settle in private", meaning you will ask for your money back, I'll laugh and ignore you?

What's your address?

I said "absent fraud or theft" I am opposed to using the courts for this. If you need help interpreting this sentence, it means if there is fraud or theft, then I support using the courts to recover.

[proudhon]

And the price of coin plummets....

Yeah, cash out of your coins into USD that MtGox holds lol.

When the market gets really crazy and bad news starts piling up, I don't try to profit anymore.  I'm happy with what I've made and can comfortably weather the storms.  No, the first thing I do is move my BTCs from exchanges into offline wallets.  I don't want them seized and I can move them so much more easily than USD.

[cosurgi]

apparently there were darkfriends* among mtgox lawyers, who wanted to get this agreement signed.

*people who can be bribed, for their own gain, not taking into account losses of other people.

[BeeCoin]

As the bitcoin economy gets bigger, expect way more dirty business...

Anyway, for the average Joe, it boils down to this:
Either, you believe in Bitcoins - or you don't.
If you believe in bitcoins: buy them, hold them, don't freak out and just wait...
If you don't believe in bitcoins: speculate at your own risk, don't be too greedy - and stop whining if you loose money.

[radiumsoup]

And the price of coin plummets....

Yeah, cash out of your coins into USD that MtGox holds lol.

When the market gets really crazy and bad news starts piling up, I don't try to profit anymore.  I'm happy with what I've made and can comfortably weather the storms.  No, the first thing I do is move my BTCs from exchanges into offline wallets.  I don't want them seized and I can move them so much more easily than USD.

Precisely, emphatically, and wholeheartedly this ^^^.

[1PFYcabWEwZFm2Ez5LGTx3ftz]

best business ever.
start company, enter agreement,
not have it fulfilled
sue for 75 million.
retire

Or maybe more like:

start company,
enter agreement,
organize DDOS attacks to hinder the ability of MtGox to fulfill the agreement,
not have it fulfilled,
sue for 75 million.
retire

The moment I heard of MtGox's plans to become partners with a US based company, my first thought was - "WTF are you doing Gox?? Are you stupid?? You WILL get burned by the US - they are probably going into this 'partnership' only to be able to burn you harder". Sadly, it seems I was right.

[wtfvanity]

And the price of coin plummets....

Yeah, cash out of your coins into USD that MtGox holds lol. Price should be sky rocketing while you get your coins out.

When the market gets really crazy and bad news starts piling up, I don't try to profit anymore.  I'm happy with what I've made and can comfortably weather the storms.  No, the first thing I do is move my BTCs from exchanges into offline wallets.  I don't want them seized and I can move them so much more easily than USD.

Precisely, emphatically, and wholeheartedly this ^^^.

The rest of my quote was cut off when I was quoted. I've added the rest of my quote back. The lol, is wtf are people doing that for? Selling all their coins for cash? If you're worried, sell your USD for cash and just like proudhon said, get them in your possession which bitcoin makes oh so wonderfully easy.

[proudhon]

And the price of coin plummets....

Yeah, cash out of your coins into USD that MtGox holds lol. Price should be sky rocketing while you get your coins out.

When the market gets really crazy and bad news starts piling up, I don't try to profit anymore.  I'm happy with what I've made and can comfortably weather the storms.  No, the first thing I do is move my BTCs from exchanges into offline wallets.  I don't want them seized and I can move them so much more easily than USD.

Precisely, emphatically, and wholeheartedly this ^^^.

The rest of my quote was cut off when I was quoted. I've added the rest of my quote back. The lol, is wtf are people doing that for? Selling all their coins for cash? If you're worried, sell your USD for cash and just like proudhon said, get them in your possession which bitcoin makes oh so wonderfully easy.

Sorry, I didn't mean to make is seem like you were endorsing cashing out to USD.  I understood that you were poking fun at the idea.  In any event, everytime I actually perform a bitcoin transaction or make an offline wallet, I'm reminded of how cool bitcoin is.  

Since yesterday is the first time I've actually had no bitcoins anywhere other than my own private offline wallets.  I've typically kept at least a little bit in online wallets or an exchange or two, but I think I'm done with that until this infrastructure matures more and I have more trust in third parties.  The risk of losing my bitcoins concerns me more than their value dropping and not having the immediate ability to convert them to USD on somebody else's balance sheet.

I understand that's not going to be everyone's risk assessment.  I'm sure a lot of people who bought in the past couple months will decide differently.

Sorry for the thread hijack.

[johnyj]

I had a feeling this is the same old wallstreet tricks to shake the exchange price through a lawsuit so that some one can buy some cheap coins

[darkmule]

Holy shit. Who in their right mind would sign that when the section above in J shows year 1 and 2 being under a half million? It applies to both parties and is the stupidest thing they both ever signed. If anything, coinlabs put that in their. Their F2 is a 2 year thing, F1 is MtGox responsibility for the entire term. So either they did something brilliant or both teams should fire their attorneys because they are idiots.

Liquidated damages clauses in large transactions are routine.  Sun v. Microsoft, as one example, concerned in part a $35 million liquidated damages clause.

In this case, the clause might be unenforceable because the contract concerns a much smaller value than that between Sun and Microsoft, making the $50 million number more of a penalty than a way of simplifying the calculation of damages.  The purpose of contract law is not to award jackpots to lucky winners, but to put the non-breaching party in the position he would have been in had the contract been followed.

The purpose for this kind of clause is often, you don't trust who you are contracting with actually to carry out the agreement.  If Coinlab was acting in good faith (hard to know that yet), then the purpose of having such a big number is to have a big club to enforce compliance.  Gox was obviously stupid to sign an agreement with a clause like this and then not carry it out.  Coinlab might have been stupid, too, if they were the first to breach.

I doubt the $50 million number would be upheld.  It might be a Sword of Damocles, but it's a toy plastic sword.

[Zeke_Vermillion]

Holy shit. Who in their right mind would sign that when the section above in J shows year 1 and 2 being under a half million? It applies to both parties and is the stupidest thing they both ever signed. If anything, coinlabs put that in their. Their F2 is a 2 year thing, F1 is MtGox responsibility for the entire term. So either they did something brilliant or both teams should fire their attorneys because they are idiots.

Liquidated damages clauses in large transactions are routine.  Sun v. Microsoft, as one example, concerned in part a $35 million liquidated damages clause.

In this case, the clause might be unenforceable because the contract concerns a much smaller value than that between Sun and Microsoft, making the $50 million number more of a penalty than a way of simplifying the calculation of damages.  The purpose of contract law is not to award jackpots to lucky winners, but to put the non-breaching party in the position he would have been in had the contract been followed.

The purpose for this kind of clause is often, you don't trust who you are contracting with actually to carry out the agreement.  If Coinlab was acting in good faith (hard to know that yet), then the purpose of having such a big number is to have a big club to enforce compliance.  Gox was obviously stupid to sign an agreement with a clause like this and then not carry it out.  Coinlab might have been stupid, too, if they were the first to breach.

I doubt the $50 million number would be upheld.  It might be a Sword of Damocles, but it's a toy plastic sword.

A rare (for this forum) legally accurate statement!

[BeeCoin]

Since yesterday is the first time I've actually had no bitcoins anywhere other than my own private offline wallets.  I've typically kept at least a little bit in online wallets or an exchange or two, but I think I'm done with that until this infrastructure matures more and I have more trust in third parties.

Exactly my sentiments. The bitcoin infrastructure itself has proven to be pretty solid. Exchanges? Legal regulations, hacking, corruption...

It's really great BTC is not built upon trust. I can simply lock my bitcoins away

[Bitcoinpro]

the CCCB would be able to provide protection for Mtgox if required for Bitcoin stability, and will be watching the matter very closely

[MPOE-PR]

the CCCB would be able to provide protection for Mtgox if required for Bitcoin stability, and will be watching the matter very closely

I'm sorry, the what? Is this some sort of supernode?

[radiumsoup]

I was wondering if he meant the USSR or something, but that was CCCP.

http://www.cccb.edu/ ?