If you still trust MtGox read this story -- 700 EUR stolen!

[glebm]

So I played some SatoshiDice from MtGox, as I was a newbie and their system provided no warning when I put a 1dice address in.
SatoshiDice sent me back around 700 EUR (one of the lucky bets txn is below).
Of course I never got that money, as I found out later the return addresses MtGox provides are not tied to your account, and the money appears somewhere else within MtGox-operated accounts network.

Watch me appeal to MtGox Customer Support, and watch them fail harder with every response (tldr; incompetent support with no human decency and lacking the concept of private property, thinking they just get to keep my money!)

Below is a complete account of an MtGox Customer Support issue:

Me - May 15 18:36
Hi,

I've used SatoshiDice several times before accidentally hovering over the help icon and reading that it doesn't work (as I found out later by browsing the forums, mtgox does not seem to provide the correct return address). I have over 500 EUR in bitcoins that never reached my address. Please send me that money, I need it as soon as possible.

I have a usability suggestion for you. All SatoshiDice addresses start with 1dice. If the users puts in an address that looks like an SD address, display the warning that it won't work with mtgox (or even disable the button). Of course, the real solution would be to make it work, but this would at least mitigate the problem for now.

Also, it would help if the chat displayed wait time estimate. I've waited for over half an hour on the chat before writing this email.

 
James Support
Support Desk
Hello,

Thank you for the email. Let me inform you that the send address is used for only temporarily and it can not be used as received address.

Thanks,

MtGox.com Team

Me - May 15, 2013 22:26
Yes, I already understand that (as should be clear from my message). I will not do that again, and I have provided a usability suggestion that should help others in understanding that. When will you send me my money?

Me - May 15, 2013 22:30
Here is an example of my satoshidice bet http://src.satoshidice.com/longpoll.php?tx=5c2f36654a40e415f343e70e5077ab04dde01ff194df439f6d17b686842f32a4

The address is temporary, but it still belongs to mtgox, so you received the winning from that bet, correct?

James Support - May 15, 2013 22:37
Support Desk
Hello,

Let me inform you that we will not able to receive the funds to the Mt.Gox. Please be clear send address cant be used as receive address.

Thanks,

MtGox.com Team


Me - May 16, 2013 20:28
Please do take a few minutes and answer the questions I've asked so far.

As long as I understand:
* You know about the situation, as the hint states
* You did not inform me of this problem when I was doing a transaction, while you had all means to warn me and prevent the situation from arising
* The money is now in one of the accounts you have access to

The conclusion I can make out is: you have my money, you have gained it by negligence.
In light of the recent case (http://cdn.arstechnica.net/wp-content/uploads/2013/05/Mt-Gox-Dwolla-Warrant-5-14-13.pdf) I doubt you would like more attention from authorities right now (in my case German authorities, as I am a German resident).

You would be wise to give me the decency of a human response explaining the situation in detail. Please consider escalating this request if you do not have enough authority to do so.

James Support - May 16, 2013 21:53
Support Desk
Hello,

Thank you for the email. Please send us the sending and receiving address that the funds has been sent to you.

Thanks,

MtGox.com Team

Me - May 17, 2013 19:16
Unfortunately, mtgox does not show the transaction ids in account history

Please provide me with the transaction numbers for all the withdrawals to 1dice addresses from my account since 2013/05/14, then I will contact SatoshiDice to provide you with the sending and receiving addresses

James Support - May 17, 2013 22:03
Support Desk
Hello,

To check the account history of you account. Please click on Account history of your account and click on top right corner for the account history.

Thanks,

MtGox.com Team

Me - May 19, 2013 20:04
James, Account history does not show the transaction IDs! I need the transaction IDS!

Me - May 19, 2013 20:27
Please look up withdrawals to 1dice addresses from my account since 2013/05/14, and provide me with transaction addresses, just like I asked in the previous message.

James Support - May 19, 2013 20:30
Support Desk
Hello,

Please be advised we do not have control of your account and you can have reference number from your account history.

Thanks,

MtGox.com Team

Me - May 20, 2013 22:29
> you can have reference number from your account history.
Here they are (attached). Please kindly tell me where I can find reference numbers?

 mtgox satoshidice withdrawals.png (quick view)

James Support - May 20, 2013 23:00
Support Desk
Hello,

For your information, the transactions for the past three months will be active and other transactions will be archived. the option is available in the account history and it can be downloaded in CSV format at the top right corner. Please contact us for further assistance.

Thanks,

MtGox.com Team

Me - May 22, 2013 00:40
Hi James,

The CSV File does not give me any additional information either, see attached file.

 mtgox-csv.png (quick view)

James Support - May 22, 2013 01:48
Support Desk
Hello,

Thank you for the email. We do not have the control of your account. Please be refer the below attachment for your reference.

Thanks,

MtGox.com Team

 SatoshiDice.JPG (quick view)
Note: support staff fail, they didn't bother to look at what their system actually shows. this attachment was not helpful, it was just a screenshot of SatoshiDice help icon hover warning that had been discussed in my first message

Me - May 24, 2013 01:22
Please at least return this one:
88dda561b795f8eb320b5330236830f13c9e19e8148145b0250c61bb755711d0

Danny - May 24, 2013 02:13
Support Desk
Hello,

Kindly note that our system will not work with SatoshiDice and it is not possible for us to locate the transaction. Please file a police report in order for the police to investigate the case and make an effort to retrieve your funds. We will cooperate with the police authority in providing the necessary information for the investigation, but we are unable to reimburse any funds.

Thanks,

MtGox.com Team

Me - May 24, 2013 09:24
No wonder people DDoS you

Danny - May 24, 2013 09:37
Support Desk
Hello,

We have already explained in the withdrawals page about our system no compatibility with SatoshiDice. Contact us for any further assistance.

Thanks,

MtGox.com Team

Me - May 26, 2013 09:01
Your explanation came too late and my money is in an account held by you. How do you even dare steal my stuff and make me go through police..

James Support - May 26, 2013 11:28
Support Desk
Hello,

Let me inform you that the funds are not held by us and we did not receive the money. You can contact SatoshiDice or please file a police report in order for the police to investigate the case and make an effort to retrieve your funds.

Thanks,

MtGox.com Team

Me - May 26, 2013 19:08
So who holds the funds? The transaction states the money was sent to an address operated by you.

[WuLabsWuTecH]

Satoshidice has a warning on their page that you should use a test amount first before betting anything big:

"Only use wallets that allow you to receive Bitcoin from the same address you sent from. If you're not sure, test by sending a bet for the minimum amount. If you get nothing back, then your wallet is not compatible. Note that some bets may require one confirmation before the win/loss value is sent back."

You neglected to follow the warning and therefore it is not MtGOX's fault that you did not get your earnings.  They probably use the send account for multiple people and it would be very hard and time intensive to prove that transaction was yours.

Why anyone uses mtgox as their wallet is beyond me, this is why there are ewallets and desktop wallets.

Lesson learned: read the warnings before proceeding with using any system like this.  This wasn't even hidden in a TOS or fine print, it's right there on the front page plain and simple!

[GodfatherBond]

Satoshidice has a warning on their page that you should use a test amount first before betting anything big:

"Only use wallets that allow you to receive Bitcoin from the same address you sent from. If you're not sure, test by sending a bet for the minimum amount. If you get nothing back, then your wallet is not compatible. Note that some bets may require one confirmation before the win/loss value is sent back."

You neglected to follow the warning and therefore it is not MtGOX's fault that you did not get your earnings.  They probably use the send account for multiple people and it would be very hard and time intensive to prove that transaction was yours.

Why anyone uses mtgox as their wallet is beyond me, this is why there are ewallets and desktop wallets.

Lesson learned: read the warnings before proceeding with using any system like this.  This wasn't even hidden in a TOS or fine print, it's right there on the front page plain and simple!

Gox also says quite clearly that their system will not work with SatoshiDice.

[escrow.ms]

It's your fault mate, mtgox is a trading site, you shouldn't use it as your online wallet and on top of that there is a warning on SD too.

Ps: I don't know if they recycle those address as sending address or not but if they do, someone will get those funds.

[WuLabsWuTecH]

After inspecting the blockchain, I think I see the issue now.

The address that the funds were sent from is probably someone's temporary address they receive funds at for mtgox.  (Everytime you received BTC, MTGOX generates a new address for you.)  The reason I say this is that if you look at: https://blockchain.info/address/1LxNm2tWBGHKfUE9ypyu1sMsQFfizoFotj which is the address you claim to have tried to receive the funds at, that address is receiving funds from bitcoin faucets.  I doubt MTGOX goes onto bitcoin faucets and enters captchas as part of it's business strategy!

I'm guessing that MTGOX used someone's receive address to send BTC to satoshidice, and when it returned, it returned to someone else's account.  For all we know, he is a day trader that has such a high volume of movement that he wouldn't notice an extra 5 bitcoins in his account.  But Mt.Gox is right--they can't just give you funds out of someone else's account.  It's the equivalent of if you accidentally deposited money into someone else's dwolla or paypal or bank account.  You would have to go through the process to reverse the erroneous transaction (which even with dwolla or paypal or regular banks can take weeks to research and cost a bit of money).  Since BTC is irreversible, there really isn't any recourse you have at this point.

Once again--lesson learned: there were warnings everywhere and you chose to ignore them.  I bet this won't happen again to you anytime soon.

[TheSwede75]

700 eur stupidly wasted because the person obviously couldn't read. Would be a better title.

[glebm]

While it may be complicated or time consuming to retrieve it, they do not get to keep it. A regular business practice would be to charge a fee on retrieving. However, understand that they do not have the rights to my money just because I made a mistake like that!
 
WuLabsWuTecH, thank you for this comprehensive explanation. As I understand it though, there is one gotcha: MtGox must have full access to all accounts to operate, so they must also be able to transfer money from the account where it was erroneously deposited to back to my account (as long as that account is still solvent after such transfer).

[DoubleMyCoins!]

I'm really sorry to hear this!

DoubleMyCoins.com is a newly opened site that does the same thing. There is a warning about only sending from a wallet that allows incoming transactions.

MtGox has a ton of issues to worry about, like security, lawsuits, regulations and more on top of trying to run their business. Please understand they have tens or more like hundreds of thousands of users, so it's a bit hard to give each issue priority

[glebm]

I'm really sorry to hear this!

DoubleMyCoins.com is a newly opened site that does the same thing. There is a warning about only sending from a wallet that allows incoming transactions.

MtGox has a ton of issues to worry about, like security, lawsuits, regulations and more on top of trying to run their business. Please understand they have tens or more like hundreds of thousands of users, so it's a bit hard to give each issue priority

Yeah it really sucks. All it would take them to prevent this from ever happening is one line of javascript, since SatoshiDice addresses are public and don't change (they also all start with 1dice).

I understand they must be new to this, but so far I've been told that they won't deal with my issue at all. I must be the only user who did not guess to hover over that one generic blue help icon on that page.  

[CanadianGuy]

a fool and his money  <--->

[steveioio]

bad news.

[glebm]

CanadianGuy, GodfatherBond, escrow.ms and others who may feel like posting before reading: a company that behaves like this is not to be trusted!

[WuLabsWuTecH]

While it may be complicated or time consuming to retrieve it, they do not get to keep it. A regular business practice would be to charge a fee on retrieving. However, understand that they do not have the rights to my money just because I made a mistake like that!
 
WuLabsWuTecH, thank you for this comprehensive explanation. As I understand it though, there is one gotcha: MtGox must have full access to all accounts to operate, so they must also be able to transfer money from the account where it was erroneously deposited to back to my account (as long as that account is still solvent after such transfer).

You're starting down a slippery slope there.  Sure MtGOX has full access, but we have no idea whose account the money was credited to.  He may have traded it already or bought a pizza with it!  In Banking, transactions are reversible, but Bitcoin is built not to be.  You are requesting that MtGOX start acting like a bank and go into someone's account to retrieve the funds.  This is not a good road to go down.  I would agree that MTGOX should credit you had THEY been the ones to make a mistake--that is to say, had you transferred in BTC to your GOX account and they credited it to the wrong account.  I would agree that MTGOX should eat the cost there and credit you with your BTC that you rightfully deposited, but since they made no mistakes they should in no way be liable for your loss.  It comes back to the fact that you did not follow proper deposit procedures (only depositing to an address that is assigned to you).

Further, I don't actually know if it's provable that they BTC is rightfully yours.  A good analogy (I know it's not a great one) may be that you deposited money with Bank A, and later withdrew said money plus interest.  You stuck the cash in an envelope with no return address (or the return address of bank A, you were cheap and used one of their envelopes on the counter) and mailed it to Bank B.  In it, you indicated that you wanted the cash deposited to Account number 1235.  Unfortunately, your account number is 1234.  While it can be circumstantially shown that the amount deposited was the exact amount you withdrew from bank A 2 hours prior, it cannot be conclusively proven that is where the money came from.  Make sense?

Speaking of slippery slopes, BitCoin is about trying to get away from regulation and nanny states.  Why would an exchange start popping up messages warning people not to send money to certain addresses.  This once again starts down a steep slope.  Do they do it for all gambling sites?  What about doing it for known scam sites?  Where do you draw the line?  It's up to each user to do the due diligence for himself to figure out whether he wants to do business with any other user and this includes reading the warnings posted on both sites about compatibility issues.

[ranlo]

Satoshidice has a warning on their page that you should use a test amount first before betting anything big:

"Only use wallets that allow you to receive Bitcoin from the same address you sent from. If you're not sure, test by sending a bet for the minimum amount. If you get nothing back, then your wallet is not compatible. Note that some bets may require one confirmation before the win/loss value is sent back."

You neglected to follow the warning and therefore it is not MtGOX's fault that you did not get your earnings.  They probably use the send account for multiple people and it would be very hard and time intensive to prove that transaction was yours.

Why anyone uses mtgox as their wallet is beyond me, this is why there are ewallets and desktop wallets.

Lesson learned: read the warnings before proceeding with using any system like this.  This wasn't even hidden in a TOS or fine print, it's right there on the front page plain and simple!

Gox also says quite clearly that their system will not work with SatoshiDice.

Yeah, when reading through his emails to support both of these came to mind. I don't even have an account at Mt. Gox and yet I still knew they were not compatible.

[Quetzalcoatl_]

So I played some SatoshiDice from MtGox, as I was a newbie and their system provided no warning when I put a 1dice address in.
SatoshiDice sent me back around 700 EUR (one of the lucky bets txn is below).
Of course I never got that money, as I found out later the return addresses MtGox provides are not tied to your account, and the money appears somewhere else within MtGox-operated accounts network.

A Bitcoin exchange can't work any other way. Otherwise, every single trade would have to be accompanied by a blockchain transaction to move the funds to "your" address.

[glebm]

You're starting down a slippery slope there.  Sure MtGOX has full access, but we have no idea whose account the money was credited to.  He may have traded it already or bought a pizza with it!  In Banking, transactions are reversible, but Bitcoin is built not to be.  You are requesting that MtGOX start acting like a bank and go into someone's account to retrieve the funds.  This is not a good road to go down.  I would agree that MTGOX should credit you had THEY been the ones to make a mistake--that is to say, had you transferred in BTC to your GOX account and they credited it to the wrong account.  I would agree that MTGOX should eat the cost there and credit you with your BTC that you rightfully deposited, but since they made no mistakes they should in no way be liable for your loss.  It comes back to the fact that you did not follow proper deposit procedures (only depositing to an address that is assigned to you).

MtGox, however is a real company and operates under Japanese law and international trade agreements. The company is still liable to the customer in more ways than they'd like to be, even if tries to set its own rules -- the law always takes priority. Your analogy is not quite the same, because bitcoin are a lot more traceable than that.

Speaking of slippery slopes, BitCoin is about trying to get away from regulation and nanny states.  Why would an exchange start popping up messages warning people not to send money to certain addresses.  This once again starts down a steep slope.  Do they do it for all gambling sites?  What about doing it for known scam sites?  Where do you draw the line?  It's up to each user to do the due diligence for himself to figure out whether he wants to do business with any other user and this includes reading the warnings posted on both sites about compatibility issues.

Can BitCoin stay unregulated for much longer? Money laundering won't stop by itself, as everyone chooses to avoid tax when the risk is low and the tax is high. Since it seems that somebody has already figured out how to artificially scatter transactions so that they effectively become untraceable, the are many ways to launder money with this...

[glebm]

A Bitcoin exchange can't work any other way. Otherwise, every single trade would have to be accompanied by a blockchain transaction to move the funds to "your" address.

Yes, but MtGox does log my send transaction, and does know about the received transaction from SatoshiDice. For each transaction they know about the exit point, the following entry point, and they can trace the final point at an MtGox address tied to an MtGox account.

[blakdawg]

Sounds more to me like "700 EUR lost when gambler doesn't follow instructions."

[nottm28]

You lost the bet - you lost the money you never owned - don't gamble.

[WuLabsWuTecH]

MtGox, however is a real company and operates under Japanese law and international trade agreements. The company is still liable to the customer in more ways than they'd like to be, even if tries to set its own rules -- the law always takes priority. Your analogy is not quite the same, because bitcoin are a lot more traceable than that.

Yes, but if at the end of their investigation, they are unable to ascertain that you are owed funds (which is what it sounds like they are saying) then that's all they have to do internally (assuming japanese law is similar to us law--i claim to be an expert in neither, but I have taken quite a few law classes and had some experience in the field).  Your choices are to sue them in court, where you will have the burden of proof that the money is yours AND that MtGOX was negligent in crediting the money to someone else's account.  The first is going to be hard to do, the second IMHO is going to be impossible.  YOU made a mistake that resulted in a LOSS for YOU.  Depending on how long ago this happened, you may have a claim if you can figure out who the account holder of the other address is.  In most places, after you find something of value not to be yours, you are required to make a reasonable effort to locate it's owner.  (In most places this is done either by filing a police report or taking out an ad in the local paper though courts have ruled other methods to satisfy this requirement).  If after a certain period of time no one has stepped forward to claim the item, it becomes yours (it was abandoned).  THIS is what MtGOX is telling you to do in regards to the police report.  You misplaced something and by filing a report, you may be able to claim this item later if it shows up in another police department's system or some other database.  Once again, you will have to prove that the BTC actually belong to you (kind of like identifying a ring when you go to pick up a found item).  Will your local detectives put in a lot of work into finding something that amounts to $700?  Probably not, but it'll be your best shot.  Think of it as the equivalent of filing a report saying I left my ring on the top of my car in WalMart's parking lot and drove off and now I can't find it.

Can BitCoin stay unregulated for much longer? Since it seems that somebody has already figured out to artificially scatter transactions so that they are effectively untraceable, the are many ways to launder money with this.

Irrelevant: it only matters if it is regulated AT THE TIME of the issue arising.