CoinLab should move on and create a new US Market

[CompNsci]

Hopefully Coinlab will move on and create a new U.S. market, rather than trying to quickly turn a $500k VC investment into $50M of stipulated damages.

Why on earth are they still directing people to Mt. Gox to trade?

[1713481624]

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[RodeoX]

I think your right. I would like to give my business to a legal U.S. company. I suppose taking MtGox's U.S. orders would have given them a revenue stream from opening day. But just opening their own exchange could bring in customers very quickly. This economy is itching for a licensed and bonded/insured money transmitter to explode onto the market.   

[cypherdoc]

Coinlab hasn't accomplished a single thing yet in the bitcoin community except jump around to multiple projects none of which has born fruit.

[Stampbit]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

[kokojie]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

Problem is who knows when it will pull a "bitfloor" or ZhouTonged when it gains popularity, I would put money at a company that has VC support (coinbase, coinlab). They are less likely to have their bank account banned for playing exchange as a teenager, or get hacked due to lack of technical expertise.

[RodeoX]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

Problem is who knows when it will pull a "bitfloor" or ZhouTonged when it gains popularity, I would put money at a company that has VC support (coinbase, coinlab). They are less likely to have their bank account banned for playing exchange as a teenager, or get hacked due to lack of technical expertise.

Agreed. For me  a legitimate exchange must be insured or bonded and be licensed as a money transmitter. FinCen has already stated that exchanges are going to need this. Any new startups that think they can avoid such regulation are not going to survive.

[proudhon]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

Problem is who knows when it will pull a "bitfloor" or ZhouTonged when it gains popularity, I would put money at a company that has VC support (coinbase, coinlab). They are less likely to have their bank account banned for playing exchange as a teenager, or get hacked due to lack of technical expertise.

Agreed. For me  a legitimate exchange must be insured or bonded and be licensed as a money transmitter. FinCen has already stated that exchanges are going to need this. Any new startups that think they can avoid such regulation are not going to survive.

And this is exactly why VC interest is more relevant and important than ever.  The startup costs of a bitcoin exchange in the US have significantly increased.

[acoindr]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

Problem is who knows when it will pull a "bitfloor" or ZhouTonged when it gains popularity, I would put money at a company that has VC support (coinbase, coinlab). They are less likely to have their bank account banned for playing exchange as a teenager, or get hacked due to lack of technical expertise.

Agreed. For me  a legitimate exchange must be insured or bonded and be licensed as a money transmitter. FinCen has already stated that exchanges are going to need this. Any new startups that think they can avoid such regulation are not going to survive.

It sucks to see guys who deserve credit get none.

CampBX.com is one of the only exchanges to never be hacked, as far as I know. They made security part of their image from day 1. They seem to be the epitome of responsibility and honesty. They have been around now for what well over a year? Without a single incident.

As for regulation the FinCEN guidance is taking the entire Bitcoin community a while to digest, at least those based out of the US.

[RodeoX]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

Problem is who knows when it will pull a "bitfloor" or ZhouTonged when it gains popularity, I would put money at a company that has VC support (coinbase, coinlab). They are less likely to have their bank account banned for playing exchange as a teenager, or get hacked due to lack of technical expertise.

Agreed. For me  a legitimate exchange must be insured or bonded and be licensed as a money transmitter. FinCen has already stated that exchanges are going to need this. Any new startups that think they can avoid such regulation are not going to survive.

It sucks to see guys who deserve credit get none.

CampBX.com is one of the only exchanges to never be hacked, as far as I know. They made security part of their image from day 1. They seem to be the epitome of responsibility and honesty? They have been around now for what over a year? Without a single incident.

As for regulation the FinCEN guidance is taking the entire Bitcoin community a while to digest, at least those based out of the US.

It's true that I had forgotten about CampBX. I will have to take another look at them. Hopefully they are working on becoming a transmitter.

Oh, and +1 to Proudhorn's comment.

[mindtomatter]

Hopefully Coinlab will move on and create a new U.S. market, rather than trying to quickly turn a $500k VC investment into $50M of stipulated damages.

Why on earth are they still directing people to Mt. Gox to trade?

Have you read the complaint?   We reached out to Coinlab for comment and after reading the complaint I see what the problem is.

1 - Gox signed an exclusivity agreement promising integration and swap-over by march 22 - They did not perform
2 - Gox agreed to provide a number of both physical and digital items - they did not perform
3 - Gox agreed to pay 50M as a non-exclusive penalty if they did not deliver (more can be sought, that's just something they already signed themselves up for)

The complaint is only 12 pages long, if you'd like to give it a read http://www.scribd.com/doc/139281443/Coinlab-v-Mt-Gox

Seems pretty open and shut to me, I've reached out to Mt.Gox for comment but I'll be suprised if they want to talk.

[acoindr]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

Problem is who knows when it will pull a "bitfloor" or ZhouTonged when it gains popularity, I would put money at a company that has VC support (coinbase, coinlab). They are less likely to have their bank account banned for playing exchange as a teenager, or get hacked due to lack of technical expertise.

Agreed. For me  a legitimate exchange must be insured or bonded and be licensed as a money transmitter. FinCen has already stated that exchanges are going to need this. Any new startups that think they can avoid such regulation are not going to survive.

It sucks to see guys who deserve credit get none.

CampBX.com is one of the only exchanges to never be hacked, as far as I know. They made security part of their image from day 1. They seem to be the epitome of responsibility and honesty? They have been around now for what over a year? Without a single incident.

As for regulation the FinCEN guidance is taking the entire Bitcoin community a while to digest, at least those based out of the US.

It's true that I had forgotten about CampBX. I will have to take another look at them. Hopefully they are working on becoming a transmitter.

Oh, and +1 to Proudhorn's comment.

I like them. I posted a thread about the community supporting other exchanges besides defaulting to Mt.Gox, and I promised to try myself. CampBX.com I think has a great foundation, but they need to work on usability a bit. Their site isn't smooth feeling to use, and their depth table, with the increasing volume, is now pretty useless in practice. They need a visual chart.

I agree about proudhon's comment too.

[epetroel]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

Problem is who knows when it will pull a "bitfloor" or ZhouTonged when it gains popularity, I would put money at a company that has VC support (coinbase, coinlab). They are less likely to have their bank account banned for playing exchange as a teenager, or get hacked due to lack of technical expertise.

Agreed. For me  a legitimate exchange must be insured or bonded and be licensed as a money transmitter. FinCen has already stated that exchanges are going to need this. Any new startups that think they can avoid such regulation are not going to survive.

It sucks to see guys who deserve credit get none.

CampBX.com is one of the only exchanges to never be hacked, as far as I know. They made security part of their image from day 1. They seem to be the epitome of responsibility and honesty. They have been around now for what well over a year? Without a single incident.

As for regulation the FinCEN guidance is taking the entire Bitcoin community a while to digest, at least those based out of the US.

Other than Gox and Intersango (which hardly exists anymore) I believe they are the oldest exchange that's still around.  I started trading there in July of 2011.

[Peter Lambert]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

Problem is who knows when it will pull a "bitfloor" or ZhouTonged when it gains popularity, I would put money at a company that has VC support (coinbase, coinlab). They are less likely to have their bank account banned for playing exchange as a teenager, or get hacked due to lack of technical expertise.

Agreed. For me  a legitimate exchange must be insured or bonded and be licensed as a money transmitter. FinCen has already stated that exchanges are going to need this. Any new startups that think they can avoid such regulation are not going to survive.

It sucks to see guys who deserve credit get none.

CampBX.com is one of the only exchanges to never be hacked, as far as I know. They made security part of their image from day 1. They seem to be the epitome of responsibility and honesty. They have been around now for what well over a year? Without a single incident.

As for regulation the FinCEN guidance is taking the entire Bitcoin community a while to digest, at least those based out of the US.

Other than Gox and Intersango (which hardly exists anymore) I believe they are the oldest exchange that's still around.  I started trading there in July of 2011.

I've never used campbx before, but after reading this thread I decided to give it a try, so I moved some money off MtGox and onto CampBX, let's see how it goes.

[acoindr]

We already have one US exchangers no one seems to be using - campbx.com (1% volume of gox).

Problem is who knows when it will pull a "bitfloor" or ZhouTonged when it gains popularity, I would put money at a company that has VC support (coinbase, coinlab). They are less likely to have their bank account banned for playing exchange as a teenager, or get hacked due to lack of technical expertise.

Agreed. For me  a legitimate exchange must be insured or bonded and be licensed as a money transmitter. FinCen has already stated that exchanges are going to need this. Any new startups that think they can avoid such regulation are not going to survive.

It sucks to see guys who deserve credit get none.

CampBX.com is one of the only exchanges to never be hacked, as far as I know. They made security part of their image from day 1. They seem to be the epitome of responsibility and honesty. They have been around now for what well over a year? Without a single incident.

As for regulation the FinCEN guidance is taking the entire Bitcoin community a while to digest, at least those based out of the US.

Other than Gox and Intersango (which hardly exists anymore) I believe they are the oldest exchange that's still around.  I started trading there in July of 2011.

I've never used campbx before, but after reading this thread I decided to give it a try, so I moved some money off MtGox and onto CampBX, let's see how it goes.

Nice!  

As I said before as a community we should make a conscious effort to support more exchanges. Centralization, 80% of all trades at one exchange, is a weakness. It's a weakness economically - note the price drop on the Gox lawsuit, or ddos, etc. - and it's a weakness from a security and regulation standpoint.

[Brushan]

MtGox should be sold too. I feel bad for Mark, it's obvious that he has no real knowledge of managing a big company. I'm pretty confident that Mark's incompetence is one of the root reasons for the lawsuit. He was just a lucky guy that rode on Bitcoins success and now he should sell it and retire before he does anymore fuckups with big businesses involved. For his and for Bitcoins best.

[proudhon]

Hopefully Coinlab will move on and create a new U.S. market, rather than trying to quickly turn a $500k VC investment into $50M of stipulated damages.

Why on earth are they still directing people to Mt. Gox to trade?

Have you read the complaint?   We reached out to Coinlab for comment and after reading the complaint I see what the problem is.

1 - Gox signed an exclusivity agreement promising integration and swap-over by march 22 - They did not perform
2 - Gox agreed to provide a number of both physical and digital items - they did not perform
3 - Gox agreed to pay 50M as a non-exclusive penalty if they did not deliver (more can be sought, that's just something they already signed themselves up for)

The complaint is only 12 pages long, if you'd like to give it a read http://www.scribd.com/doc/139281443/Coinlab-v-Mt-Gox

Seems pretty open and shut to me, I've reached out to Mt.Gox for comment but I'll be suprised if they want to talk.

First, Wow.  When I first came on board, MtGox daily volume in USD was often just a couple thousand USD.  That bitcoin businesses are now talking in terms of tens of millions of USD is really remarkable.

Second, that's quite a condition to agree to.  Seriously, is that typical?  That seems like a huge penalty to sign up for in case things go wrong.  Are there any conditions in there about hardships or factors that could except MtGox from being penalized?  I have to think the DDoS and trading engine problems of the past month or so haven't helped them prioritize getting the keys ready for the CoinLab guys.

[kiba]

Remember, bitcoin exchanges are one of the hardest business to be in. The fatality rate is around 45 percent, and the average lifespan of a bitcoin exchange is about a year.

[RodeoX]

Remember, bitcoin exchanges are one of the hardest business to be in. The fatality rate is around 45 percent, and the average lifespan of a bitcoin exchange is about a year.

Sounds like the restaurant business. That is one market I avoid investing in at all.

[Brushan]

Remember, bitcoin exchanges are one of the hardest business to be in. The fatality rate is around 45 percent, and the average lifespan of a bitcoin exchange is about a year.

That's because teenagers are running them on a Mac in mom's basement.

[mindtomatter]

Hopefully Coinlab will move on and create a new U.S. market, rather than trying to quickly turn a $500k VC investment into $50M of stipulated damages.

Why on earth are they still directing people to Mt. Gox to trade?

Have you read the complaint?   We reached out to Coinlab for comment and after reading the complaint I see what the problem is.

1 - Gox signed an exclusivity agreement promising integration and swap-over by march 22 - They did not perform
2 - Gox agreed to provide a number of both physical and digital items - they did not perform
3 - Gox agreed to pay 50M as a non-exclusive penalty if they did not deliver (more can be sought, that's just something they already signed themselves up for)

The complaint is only 12 pages long, if you'd like to give it a read http://www.scribd.com/doc/139281443/Coinlab-v-Mt-Gox

Seems pretty open and shut to me, I've reached out to Mt.Gox for comment but I'll be suprised if they want to talk.

First, Wow.  When I first came on board, MtGox daily volume in USD was often just a couple thousand USD.  That bitcoin businesses are now talking in terms of tens of millions of USD is really remarkable.

Second, that's quite a condition to agree to.  Seriously, is that typical?  That seems like a huge penalty to sign up for in case things go wrong.  Are there any conditions in there about hardships or factors that could except MtGox from being penalized?  I have to think the DDoS and trading engine problems of the past month or so haven't helped them prioritize getting the keys ready for the CoinLab guys.

Gox isn't small any more, they've got a functional monopoly on new money coming into BTC and they take a % based cut - The potential from the Coinlab partnership (from my outside perspective) was pretty massive - Coinlab promised to make it easy, safe, and legal for US and Canadian citizens to become Mt. Gox customers, without having to jump through all the hoops.  In exchange for that Mt.Gox agreed to functionally hand over its NA and Canadian customers to Coinbase, as well as a bunch of other things.

Coinbase has invested time and resources into fulfilling their part of the bargain, and seem to have their system up to snuff - Mt. Gox on the other hand appears to have failed to deliver on several major parts of the agreement.  Coinbase would have asked for this type of clause because of that expenditure on their part, and Mt. Gox would have agreed to it because they intended to deliver.   It appears something happened that borked the deal.

I really want to know Mt. Gox's side of the story, can anyone recommend a good contact?   Coinlab has agreed to an interview on Let's Talk Bitcoin and I'd love to run the counterpoint in the same show.

[CompNsci]

Have you read the complaint?   We reached out to Coinlab for comment and after reading the complaint I see what the problem is.

1 - Gox signed an exclusivity agreement promising integration and swap-over by march 22 - They did not perform
2 - Gox agreed to provide a number of both physical and digital items - they did not perform
3 - Gox agreed to pay 50M as a non-exclusive penalty if they did not deliver (more can be sought, that's just something they already signed themselves up for)

The complaint is only 12 pages long, if you'd like to give it a read http://www.scribd.com/doc/139281443/Coinlab-v-Mt-Gox

Seems pretty open and shut to me, I've reached out to Mt.Gox for comment but I'll be suprised if they want to talk.

Actually, yes, I did read the complaint. While I can readily believe that Mt Gox failed to perform, given their history, the $50M in stipulated damages will be interesting to see it plays out. How much could Coinlab actually have invested in this and paid to Mt. Gox ? Coinlab's compensatory damages would appear to be much lower than $50M.

The fact that Coinlab continues to refer people to the Mt. Gox site from their own (when other exchanges are available) may end up being a reasonable defense.

[mindtomatter]

The real damages are irrelevant, what matters is the expectation when they entered into the agreement since those expectations were codified in the contract.

I've requested exhibit a (the original contract) so we can take a look at what was really promised.  What they're stipulating is "breach of contract" and since the contract has a "in the event of breach of contract" clause, I don't see how Gox get's out of the 50 million.

And what would you suggest Coinlab do?  They've been marketing themselves on the expectation of being able to serve customers via the agreement with Gox, and Gox has failed to perform - Should they just say "Well, too bad everybody!  You came here but we're having a problem getting our contract terms fulfilled so just hang out a few months while this sorts itself out in the legal system"

Of course not, they act like professionals and point their customers to someone who *can* service their needs.  They didn't partner with Mt.Gox because of their personalities, it's because Gox is the biggest player and they want to supplement and expand that, not reinvent the wheel.

Also, I am not a lawyer - Just an independent journalist who spends all his time on Bitcoin.

[CompNsci]

CampBX.com is one of the only exchanges to never be hacked, as far as I know. They made security part of their image from day 1. They seem to be the epitome of responsibility and honesty. They have been around now for what well over a year? Without a single incident.

I've been trading with CampBX for a bit now. Money in and out is much easier in the U.S. They seem fairly responsible, though do get slowed by volume.

I think it is definitely correct that we should all make a conscious effort to try and use exchanges other than Mt. Gox to try and stabilize the Bitcoin environment. There are 3 with some volume now, CampBX, BTC-e, and Bitstamp. Let's all try and use them.

[epetroel]

CampBX.com is one of the only exchanges to never be hacked, as far as I know. They made security part of their image from day 1. They seem to be the epitome of responsibility and honesty. They have been around now for what well over a year? Without a single incident.

I've been trading with CampBX for a bit now. Money in and out is much easier in the U.S. They seem fairly responsible, though do get slowed by volume.

I think it is definitely correct that we should all make a conscious effort to try and use exchanges other than Mt. Gox to try and stabilize the Bitcoin environment. There are 3 with some volume now, CampBX, BTC-e, and Bitstamp. Let's all try and use them.

One thing I started noticing about a week or two ago was that Dwolla withdrawals are now often instant.  You make a withdrawal and get back a message that it was "able to be processed instantly".  Gox has been reasonably quick with Dwolla withdrawals lately (less than 24 hours typically) but instant is even better

[CompNsci]

I moved the discussion of legal issues to a separate thread under legal [topic=194377].

And what would you suggest Coinlab do?  They've been marketing themselves on the expectation of being able to serve customers via the agreement with Gox, and Gox has failed to perform - Should they just say "Well, too bad everybody!  You came here but we're having a problem getting our contract terms fulfilled so just hang out a few months while this sorts itself out in the legal system"

Of course not, they act like professionals and point their customers to someone who *can* service their needs.  They didn't partner with Mt.Gox because of their personalities, it's because Gox is the biggest player and they want to supplement and expand that, not reinvent the wheel.

Meanwhile, Mt. Gox has $5M of volume today. The best thing for everyone involved would be for Coinlab to start running a U.S. Exchange and competing with them. They could make money and help the Bitcoin ecosystem. Competition is always best for the consumer.

It is hard to escape the impression that Coinlab may be trying to flip a $500k VC investment into a $50M claim.

[Piper67]

Have you read the complaint?   We reached out to Coinlab for comment and after reading the complaint I see what the problem is.

1 - Gox signed an exclusivity agreement promising integration and swap-over by march 22 - They did not perform
2 - Gox agreed to provide a number of both physical and digital items - they did not perform
3 - Gox agreed to pay 50M as a non-exclusive penalty if they did not deliver (more can be sought, that's just something they already signed themselves up for)

The complaint is only 12 pages long, if you'd like to give it a read http://www.scribd.com/doc/139281443/Coinlab-v-Mt-Gox

Seems pretty open and shut to me, I've reached out to Mt.Gox for comment but I'll be suprised if they want to talk.

Actually, yes, I did read the complaint. While I can readily believe that Mt Gox failed to perform, given their history, the $50M in stipulated damages will be interesting to see it plays out. How much could Coinlab actually have invested in this and paid to Mt. Gox ? Coinlab's compensatory damages would appear to be much lower than $50M.

The fact that Coinlab continues to refer people to the Mt. Gox site from their own (when other exchanges are available) may end up being a reasonable defense.

Also, if Gox claims that a review of Coinlab showed them transferring the data would put their customers at risk (because the Coinlab setup isn't secure enough, for example) that will act as enough of a mitigating factor given that their fiduciary obligations to their clients trump the stipulations of their contract.

[repentance]

The best thing for everyone involved would be for Coinlab to start running a U.S. Exchange and competing with them. They could make money and help the Bitcoin ecosystem. Competition is always best for the consumer.

F.2 During a period of two years from the start of the Term, CoinLab shall not, directly or indirectly (including
through legal entities ultimately owned by the same person or persons as CoinLab) provide services similar to the
Services on any website.

Do you really think that MtGox is just going to let CoinLab sever and start running new exchange given this provision in the contract?

It is hard to escape the impression that Coinlab may be trying to flip a $500k VC investment into a $50M claim.

Or CoinLab wants out of the contract and this is one way they may be able to achieve that without having to pay MtGox $50,000,000 in  liquidated damages.

[mindtomatter]

I moved the discussion of legal issues to a separate thread under legal [topic=194377].

And what would you suggest Coinlab do?  They've been marketing themselves on the expectation of being able to serve customers via the agreement with Gox, and Gox has failed to perform - Should they just say "Well, too bad everybody!  You came here but we're having a problem getting our contract terms fulfilled so just hang out a few months while this sorts itself out in the legal system"

Of course not, they act like professionals and point their customers to someone who *can* service their needs.  They didn't partner with Mt.Gox because of their personalities, it's because Gox is the biggest player and they want to supplement and expand that, not reinvent the wheel.

Meanwhile, Mt. Gox has $5M of volume today. The best thing for everyone involved would be for Coinlab to start running a U.S. Exchange and competing with them. They could make money and help the Bitcoin ecosystem. Competition is always best for the consumer.

It is hard to escape the impression that Coinlab may be trying to flip a $500k VC investment into a $50M claim.

Here's the agreement (Not my link, somebody else found it) http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.1.1.pdf

From my read, one of the very few constraints placed on CoinLab is that they CANNOT compete with Mt.Gox in any services Mt.Gox offers, and in exchange for that Mt.Gox gave them 2-10 years of exclusivity regarding any/all customers in US and canada.

From my non-lawyer perspective, this looks like the biggest player in the game (Mt.Gox) being pretty submissive to a well funded upstart that could either be their partner or a frightening competitor.   Coinlab can't start a US exchange, or even partner with another US exchange so long as this contract is valid.

Also, here's the clause about the 50 million in damages:

K. Liquidated Damages. Both Parties hereby agree that it may be impossible to determine the monetary harm
suffered by the non-breaching Party in the event that MtGox breaches section F.l or in the event that CoinLab breaches
section F.2 and that therefore, after careful consideration, the Parties agree that reasonable damages for such breach
shall be $50,000,000 USD, an amount the Parties agree is reasonable and fair given the nature of the Agreement.

Again, it's all about exclusivity and the promised dates of delivery (march 22) - Mt.Gox does have a way out of the contract - if CoinLab does not meet the revenue targets

J. Targets. 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

From what I can tell, CoinLab didn't do anything wrong - They're functionally a sales, marketing, regulatory compliance, customer support partner relying entirely on Mt.Gox's platform and technologies to make the whole thing work.  Mt.Gox did not deliver those technologies or functionalities within the timeline, we're now two months past, so here we are.

I am not associated with Coinlab, have never done business with them, and frankly think any exchange operating in the US is a risky venture because of the regulatory uncertainty - But this is pretty cut and dry.

[BTCisthefuture]

MtGox should be sold too. I feel bad for Mark, it's obvious that he has no real knowledge of managing a big company. I'm pretty confident that Mark's incompetence is one of the root reasons for the lawsuit. He was just a lucky guy that rode on Bitcoins success and now he should sell it and retire before he does anymore fuckups with big businesses involved. For his and for Bitcoins best.

I hate to talk bad about a person, especially someone i don't know. of course when you put yourself in the spotlight, people who don't know will talk about you. I tend to agree with you, typically when a company continues to fail to respond to situations and make adjustments and corrections and fix issues in a timely matter it almost always comes down to poor management/leadership.  I don't know mtgox's finincals but if they are making a decent profit and still having problems delivering to both customers and now business partners I would agree that it may be time for an exectutive shakeup and mtgox , I'm not saying Mark has to leave but maybe he should hire on some people with a lot more business experience in this specicalised type of work.

[BTCisthefuture]

I'm no lawyer so what do I know, but from what I read it seems to me that Coinlab has a pretty valid and understandable claim.

The Bitcoin industry has been the wild wild west the last 3+ years. How many of us have been scammed and never got our money back,  how many services have you been a member of and they get hacked or go under and you lost money, and how many services have you tried to contact customer support only to end up waiting days/weeks/months to get a response. We all have stories like this in Bitcoin or know someone who does, sadly it's the norm right now.

I think the lack of trust and lack of recourse when problems arise in the bitcoin industry has really stunted bitcoins ability to get more mainstream traction.

If finally there is a situation like this where a contract was signed and apparently not upheld I think people (in this case Coinlab) should take legal action and have some recourse for being burned like so many of us have before but we had no way to take action. It may cause commotion and some problems in the short term, but trying to have a bit more protection and recourse options in the bitcoin industry is a welcomed thing in the long run in my opinion.

[jimbobway]

The contract doesn't seem very fair which could be argued in court.  Mt Gox is giving Coinlab everything and Coinlab is not really offering anything in return.  Its like a rich man writing a contract with a homeless man and the homeless man is complaining he didn't get his free money.  The homeless man (Coinlab) should be on their knees begging for a piece of the pie.  Instead they are being stupid and suing.  This is like the homeless man calling the police and saying the rich man didnt give him a million dollars.

[mindtomatter]

The contract doesn't seem very fair which could be argued in court.  Mt Gox is giving Coinlab everything and Coinlab is not really offering anything in return.  Its like a rich man writing a contract with a homeless man and the homeless man is complaining he didn't get his free money.  The homeless man (Coinlab) should be on their knees begging for a piece of the pie.  Instead they are being stupid and suing.  This is like the homeless man calling the police and saying the rich man didnt give him a million dollars.

Yeah, that's not accurate.  This is a mutually benificial contract that might on it's face seem like a one-sided deal (not that that matters, both parties signed it and there is no sign it was under durress)

Mt.Gox gets a broker representative who will do a better job at servicing North American customers than they did, while still being able to have their volume in the Gox system.

Gox was supposed to provide services exclusively to Coinlab, and Coinlab was prohibited from becoming or opening a competing exchange.

Gox would have this because given the financing, mission, and connections - If anybody was going to be a major player in US/bitcoin exchange, it would be Coinlab. 

Problem is, Gox didn't deliver - so Coinlab on the one hand was ready to go, but did not have the infrastructure because Gox did not provide it per their agreement.

Your example does not work because these are both multi-million dollar corporations, you can't throw out a contract just because you as the observer think one of the signors made a bad decision.

[jimbobway]

The contract doesn't seem very fair which could be argued in court.  Mt Gox is giving Coinlab everything and Coinlab is not really offering anything in return.  Its like a rich man writing a contract with a homeless man and the homeless man is complaining he didn't get his free money.  The homeless man (Coinlab) should be on their knees begging for a piece of the pie.  Instead they are being stupid and suing.  This is like the homeless man calling the police and saying the rich man didnt give him a million dollars.

Yeah, that's not accurate.  This is a mutually benificial contract that might on it's face seem like a one-sided deal (not that that matters, both parties signed it and there is no sign it was under durress)

Mt.Gox gets a broker representative who will do a better job at servicing North American customers than they did, while still being able to have their volume in the Gox system.

Gox was supposed to provide services exclusively to Coinlab, and Coinlab was prohibited from becoming or opening a competing exchange.

Gox would have this because given the financing, mission, and connections - If anybody was going to be a major player in US/bitcoin exchange, it would be Coinlab.  

Problem is, Gox didn't deliver - so Coinlab on the one hand was ready to go, but did not have the infrastructure because Gox did not provide it per their agreement.

Your example does not work because these are both multi-million dollar corporations, you can't throw out a contract just because you as the observer think one of the signors made a bad decision.

Read this legal term called 'consideration' and it may change your mind.  The example given in link below is pretty interesting.  Do you pay someone who paints your house at the start or end of the paint job?  When does the contract turn from a unilateral to a bilateral agreement?  I'm pretty sure it will brought up by Mt Gox if it ever goes to court.  The court could decide anything so you could be right too since the contract had some penalties included.  Here it is:

http://legal-dictionary.thefreedictionary.com/consideration

[mindtomatter]

I don't really see the argument here. 

It's a bilateral contract, where both sides agree to perform or refrain from performing a service

Gox promised to grant service and customer exclusivity to CoinLab for NA

CoinLab promised to refrain from opening a competing service.

Coinlab followed through, Gox did not.  What's the confusion? 

I don't have a horse in this race, but I also don't understand why Gox seems to be failing over and over again.

[MPOE-PR]

I don't have a horse in this race, but I also don't understand why Gox seems to be failing over and over again.

Because it's staffed by idiots and liars. Not a great combination for success, perfect combination for "victims of our own success".

[CompNsci]

Gox was supposed to provide services exclusively to Coinlab, and Coinlab was prohibited from becoming or opening a competing exchange.

Details on the liquidated damages clause (K) are discussed in the thread in the Legal sub forum, but the liquidated damages clause appears to apply only to section (F.1) and thus Mt. Gox licensing materials, not simply servicing customers.  I don't see part of that clause saying Mt. Gox would provide services exclusively to Coinlab.

In any case, I look forward to the report in Let's Talk Bitcoin and hope it will ask Coinlab some of the hard questions that have been raised in the legal thread.