Coinlab v. MtGox update

[numismatics]

http://numismatics.pwnz.org/coinlab-v-mtgox-answer-complaint/

TL;DR: MtGox points out that Coinlab violated their contract by failing to register as a money transmitter--wants $62,000 and BTC1428 returned, as well as $5,000,000 constructive trust imposed for outstanding balance of Coinlab customer deposits.

[melon]

so its coinlabs fault that gox is insolvent...greeeat..this gets better everday...... gooooosh!

[zby]

Looks like MtGox is really insolvent at this current stage - over 5 millions $ and some coins at Coinalabs plus 5 millions frozen in Dwolla is probably enough to make them belly up.

For the lost BTC they probably can compensate with the Bitcoinica funds that they refuse to give back.

[melon]

if the article (and accusation) is true and coinlab owes gox 5 mil then the owner of coinlab might get criminally (or at least u.s. civilly ) sued for walking away with 5 mil of u.s. customer funds ...and then theres Japanese authorities to deal with on gox's side... this aint good... y'all come back now ya hear?(banjos) der der der der der der der der der...bitcoin that is.. black gold...texas tea....NOT!

IMO  coinlab seems criminally liable not just negligent in handling business and customer funds- ...with only half the story and all the scams involved in most of the btc deals I see on this forum .its impossible to tell just what's real!

 $5,000,000 constructive trust ...?

[Nagle]

$5,000,000 constructive trust ...?

That's a good move and a good idea.

[ElectricMucus]

The whole thing smells like a smoke screen.

[smoothie]

When in doubt, avoid businesses that have these types of legal proceedings ongoing.

(ten foot pole thrown away)

[melon]

$5,000,000 constructive trust ...?

That's a good move and a good idea.

I suppose so ,however I was questioning ,does that mean a wind down of gox w full customer payback or is this trust to create a handshake to go forward on the deal...the statement of' not getting the transmitter license points to the previous rather than the latter...would a trust point to the windown of coinlab leaving gox in a position to stay solvent (once the trust is safely remitted back to gox) ? then of course theres still the 5 mil taken by  the fincen treasury fellas ! btc seems like a joke right now and I thought would have potential beyond this amount of fraud but as a percentage of market cap in scale to the whole economy it seems on par and equal to fiat in that regard

[melon]

at this point im no fan of gox but in all honesty I think their motive for having the us proxy accounts(mut. sigil. ; wells fargo) was to keep most of the u.s. order book money necessarily off the books and out of the handling of dwolla except for that which was moving in/out as fiat transfers.... imagine 10 mil is on the books of u.s customers  but only 25%  (2.5 mil) was moving as fiat withdraw transfers with 75% or (7,5 mil )staying on the exchange and on the order books..there would be no reason to put the whole 10 mil in control of dwolla...even acting as agent in money transmitting doesn't mean they should not use the proxy accounts to keep effective control of u.s. order book money. ..and moving only whats needed monthly or quarterly for adjustment of the 'withdraw to fiat' percentages over to the acting transmitter agent 'dwolla'... the funny part is the new agreement was  an exclusive u.s contract...were they going to effectively snub dwolla?(an iowa based company) ,,,or is dwolla more involved than first thought?(buyout of dwolla maybe?)owner of dwolla would stand to make a nice profit in a buyout...or was it a pure snub that was happening behind their backs...interesting

anyway I don't think the proxy accounts would need to be registered on the receive side from dwolla as long as the withdraw side of dwolla was the agent of transfer to customers in fiat and the withdraw account maintained correctly by gox...whers the law that says you cant transfer money to the agent of transfer so they can handle customer requests?.............its possible the silent shield was not from from federal prying eyes but merely a shield(firewall) between legitimate order book money and dwollas fiat withdraw account in case people at dwolla decided to run with the money they didn't necessarily need to have on hand.........anywho !!!

[melon]

http://thegenesisblock.com/mt-gox-responds-to-coinlab-lawsuit-with-5-5m-in-counterclaims/

relevant article w links to filed docs at bottom

[melon]

hopefully the other 5 mil of customer accounts was not used as startup or operating cash to buy licences shortly after the temporary deadline expired...that would be simple fraud just the same as mf global..customer account cash should stay separate from operating cash

[melon]

it would be pertinent to have gox get loans floated to them to stay solvent  until they receive the money back if they are expecting their evidence will win outright ,then payoff the loans w trust account won at trial

[melon]

why does the first article have pwnz in the url...it makes it look like a malicious link

[melon]

i'm not responding to any person in particular...just trying to hash out the situation in my own brain...bcz im bored and talking to myself makes me seem looney tunes...which keeps away the heebie jeebies

[elux]

http://numismatics.pwnz.org/coinlab-v-mtgox-answer-complaint/

Excellent writeup. Thanks. The answer and counterclaim is well worth reading in it's entirety.

Mt.Gox / Tibanne seem both honest and reasonable.

Having read both claims, I would not hesitate to characterize both the claims and general conduct of Peter Vessenes and Coinlab as,
to start with: exploitative, dishonest, greedy, malicious, ruthless, irresponsible, abusive, not to mention deeply unethical.


The malignant contract at the heart of the conflict is a fine specimen of rotten legal trickery.

Read it here: http://www.archive.org/download/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.1.1.pdf

Direct link to the answer, counterclaim: "ANSWER to 1 Complaint and, COUNTERCLAIM against plaintiff Coinlab Inc by Mt Gox KK, Tibanne"

[Pale Phoenix]

so its coinlabs fault that gox is insolvent...greeeat..this gets better everday...... gooooosh!

wow, I got 2 withdrawals out of them this week.   all insolvent companies should learn this trick...

Insolvency doesn't imply that they have NO funds. So... not really a trick.

[zby]

so its coinlabs fault that gox is insolvent...greeeat..this gets better everday...... gooooosh!

wow, I got 2 withdrawals out of them this week.   all insolvent companies should learn this trick...

Insolvency doesn't imply that they have NO funds. So... not really a trick.

Perhaps, but my point was really that you can't have any idea what their status is.   Just random people rambling at this point.

What we know is that they've lost $10 millions (and BTC 1400) recently, we also know pretty well how much they earn, what we don't know is their costs - but we can do some estimations. If WhatTheyEarn - $10millions - Costs < 0 - then they are insolvent.

[crazy_rabbit]

so its coinlabs fault that gox is insolvent...greeeat..this gets better everday...... gooooosh!

wow, I got 2 withdrawals out of them this week.   all insolvent companies should learn this trick...

Insolvency doesn't imply that they have NO funds. So... not really a trick.

Perhaps, but my point was really that you can't have any idea what their status is.   Just random people rambling at this point.

What we know is that they've lost $10 millions (and BTC 1400) recently, we also know pretty well how much they earn, what we don't know is their costs - but we can do some estimations. If WhatTheyEarn - $10millions - Costs < 0 - then they are insolvent.

The wired article seems to say that they should probably have more then enough to cover the $10 million.

[jedunnigan]

so its coinlabs fault that gox is insolvent...greeeat..this gets better everday...... gooooosh!

wow, I got 2 withdrawals out of them this week.   all insolvent companies should learn this trick...

Insolvency doesn't imply that they have NO funds. So... not really a trick.

Perhaps, but my point was really that you can't have any idea what their status is.   Just random people rambling at this point.

What we know is that they've lost $10 millions (and BTC 1400) recently, we also know pretty well how much they earn, what we don't know is their costs - but we can do some estimations. If WhatTheyEarn - $10millions - Costs < 0 - then they are insolvent.

If you bothered to read the claim you would also note that they were returned over 7 million. On top of their earnings since april (8 million, as of last month), we know they are fine. Stop spreading FUD. Thanks.

[zby]

so its coinlabs fault that gox is insolvent...greeeat..this gets better everday...... gooooosh!

wow, I got 2 withdrawals out of them this week.   all insolvent companies should learn this trick...

Insolvency doesn't imply that they have NO funds. So... not really a trick.

Perhaps, but my point was really that you can't have any idea what their status is.   Just random people rambling at this point.

What we know is that they've lost $10 millions (and BTC 1400) recently, we also know pretty well how much they earn, what we don't know is their costs - but we can do some estimations. If WhatTheyEarn - $10millions - Costs < 0 - then they are insolvent.

"what we know"?, is the US guv has 5 mil on hold or so, coinlab stole 5 mil or so, you have no idea of their operating costs, and you have no idea of their earnings, otherwise you would of given your estimation.   Sounds accurate to me.

We know that they earn a percentage of the trades and we know the volume of the trades.