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Author Topic: What would happen if?  (Read 1276 times)
killer2021
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July 02, 2011, 03:17:56 AM
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People started borrowing money on credit cards or any source they could find. Then take the money, buy bitcoins and then file bankruptcy?

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stic.man
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July 02, 2011, 03:23:04 AM
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pretty interesting question

i guess there would be a trail into the exchange, wonder how that'd play out
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July 02, 2011, 03:29:39 AM
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People started borrowing money on credit cards or any source they could find. Then take the money, buy bitcoins and then file bankruptcy?
Just a guess, you would probably get charged with fraud.

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July 02, 2011, 03:34:38 AM
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People started borrowing money on credit cards or any source they could find. Then take the money, buy bitcoins and then file bankruptcy?

i suspect you ask that assuming those bitcoins would not be declared as assets on the bankruptcy filing?

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July 02, 2011, 03:39:27 AM
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People started borrowing money on credit cards or any source they could find. Then take the money, buy bitcoins and then file bankruptcy?

Prison.  That would be fraud.

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killer2021
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July 02, 2011, 09:19:26 AM
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People started borrowing money on credit cards or any source they could find. Then take the money, buy bitcoins and then file bankruptcy?

Prison.  That would be fraud.

What if the bitcoins got deleted/hacked? Also wouldn't they have to prove fraud? I'm assuming it would be difficult considering people usually just blow the money in their credit cards on useless crap anyways. Also most of these credit cards/payday loans etc are no collateral loans. So do you think it would be very likely that the banks would chase  you around on fraud charges? Seems like they would just take the loss and walk instead of waste time. Likewise, how about if you borrowed the money from some p2p lending site like prosper.com? In that case, you borrowed small amounts of money from potentially hundreds of people. Seems unlikely that they would chase you down in that situation.

Another issue I could think of is perhaps during divorce trials where xyz person sold a bunch of assets and put all the money into bitcoins. Seems like it would be very difficult if not next to impossible to recover the bitcoins. Thats assuming the person did a good job of hiding the bitcoin keys.

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i suspect you ask that assuming those bitcoins would not be declared as assets on the bankruptcy filing?

Yes of course, you blew all the money on bitcoins.

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i guess there would be a trail into the exchange, wonder how that'd play out

Yea, would show up as. Credit card funds ---)bank account---)dwolla---)mt gox----)bitcoins

Then after that pretty much not much trace of where the bitcoins went, especially if you were sending the bitcoins to other persons.

If questioned during the proceedings the person would probably play it out as they lost the bitcoins, gambled them away or lost them in some other fashion.

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July 11, 2011, 05:35:10 AM
 #7

People started borrowing money on credit cards or any source they could find. Then take the money, buy bitcoins and then file bankruptcy?

I think people has to go to prison first and after they have completed their sentence they will start using bitcoins then instead of money.LOL Cool

 

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July 11, 2011, 06:17:12 AM
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Technically, fraud.  Realistically you'd probably get away due to Bitcoins anonymity.  But for the long-term good of Bitcoin, I hope people don't do this.  It's hard enough getting mainstream media to give Bitcoin a fair shake as it is, making it a bankruptcy haven is just another black eye I'd rather not see.

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July 11, 2011, 08:52:03 AM
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People started borrowing money on credit cards or any source they could find. Then take the money, buy bitcoins and then file bankruptcy?

Something similar to what would happen if you took the money as banknotes and buried it in the woods somewhere?

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July 11, 2011, 10:18:45 AM
 #10

Prison.

Why? Well you must  buy the bitcoins and the money that go from the credit card to the bitcoin exchange can be happily traced. So it's clear that it's not bankrupt but fraud and there are proofs

Sure, they then won't be able to take the bitcoin from you (you encrypt the wallet and everything) but you still go to jail.
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July 11, 2011, 06:01:54 PM
 #11

Prison.

Why? Well you must  buy the bitcoins and the money that go from the credit card to the bitcoin exchange can be happily traced. So it's clear that it's not bankrupt but fraud and there are proofs

Sure, they then won't be able to take the bitcoin from you (you encrypt the wallet and everything) but you still go to jail.

i think you probably take cash out of the credit card, and send anonymous money orders (or something similar) to the exchange to buy Bitcoin.

bankruptcy judge:  "what happened to the money you took out?"

you:  "i have a gambling problem."

judge:  "i hereby sentence you to counseling.  and eight lashes with a wet noodle."
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