Mt.Gox Multi-plaintiff Suit

[dynodog]

This is likely another scam/lie to manipulate the market.  No evidence at all.   Converting your bitcoin to USD will drive the price down.

Unless this person can show who they are and evidence of a lawsuit, you would be wise to ignore this user and his posts.

Agreed.  The claim that the attorney told him to sell bitcoin for cash so that the suit would go forward easier makes no sense at all.  The author should provide a link to the petition that was filed with the court when filed.

Also, simply state the name of the law firm handling the case. 

[caspar.holzinger]

Also, simply state the name of the law firm handling the case. 

From a former quote, here is your lawfirm:

I have contacted the offices of my law firm (Bingham) in Tokyo to begin proceedings to sue Mt.Gox / Tibanne Ltd / Mark Karpeles for my USD funds.  He

[zyk]

Even if they open Bitcoin withdrawal tomorrow. Please Continue this Lawsuit!

on what grounds?  and if you ended up getting back the bitcoins and/or the money in your account, what are the damages?  even if there were damages due to delays in getting customers their bitcoin or money back, given that bitcoin is a new technology, and the company wanted to ensure that customers were not being double paid, the court would likely not find the company liable for any damages due to the delays.   

My gut tells me that a large number of people are not selling bitcoin on mtgox; instead, it's a few whales.  The question is why? 

Cause the whales can withdraw and of course don´t need to speculate about Marks accounting.....

And as its a Limited company why not get everything out of the shell before the idiots come sueing ?

[dafqok]

The delays in fiat withdrawals continue, particularly for USD. Since these are not properly disclosed (or even the need to pay the 5% fee for a "manual withdrawal") on the website

The reason for the 5% fee is explained very well.  They can't send from their normal bank, and have to transfer the funds via domestic transfer first.  This makes two currency exchange fees at 2.5% each, which is a common currency exchange fee in Japanese banks.  USD -> JPY -> USD.  You are obliged to cover the bank fees (see the ToS).  You can find the currency exchange fee the multi-currency trading FAQ.

The reasons for JPY and EUR delays are properly explained IMO.  The reason for USD delays are not explained for legal reasons which they aren't allowed to talk about.  All USD transfers must pass through a US bank, which gives the US government full control.  MagicalTux have given plenty of hints on IRC and Twitter that the US government is involved in blocking those.  Good luck in getting a Japanese court to overrule the US government regarding USD transfers.  AFAIK all attempts of legal action against MtGox in the US to get USD out have failed, and to this day I haven't got a proper explanation of why all the attempts have failed.

If that is true, one should bark at the very system you are trying to ask for help: the governments. IF that is true, this is where anger and discontent shall be unloaded. I of course see validity in terms of money laundry and what not, but not by obfuscating the process of interventions, leading to this utmost alienation of people.

[brheizm]

has anyone else pm the topic starter about this? - and received an answer?! pls respond
i did not ever get answered, but had good reasons to join this suit.

to me it seems like this was made up to drive the price down on mtgox, and with success

[Luno]

has anyone else pm the topic starter about this? - and received an answer?! pls respond
i did not ever get answered, but had good reasons to join this suit.

to me it seems like this was made up to drive the price down on mtgox, and with success

Everything here is considered price fixing. If he is wrong and the court dismisses the complaint, then it's a good thing don't you think?

 

[Kroenen]

If anyone is seriously considering this I would suggest you look at the legal 500 list.

Hughes Hubbard and Reed comes to mind as a massive firms with an international office in Tokoyo.

The Japanese legal precedent regarding contracts is far different from American law in regards to what is considered a contract in their view. A firm representing this case is going to set legal history and more than likely shape all future litigation throughout the westernized world.

The firm representing this case, if there is actually one which is sounding dubious at best, would not be bashful or quite about giving out their name, or actively seeking clients. The only reason they are seeking a small group and speed in this case as they can quickly set a precedent regarding future actions, and take a lead position in seeking further injunctions.

Gox may have a virtual office located within the U.S., but it would be difficult to proceed with any action in this country based solely on that unless there has been clear cut evidence of them committing crimes on U.S. soil, in which a civil action could parallel criminal proceedings. However anyone old enough to remember the Enron and Comp USA debacle should realize any remuneration from said actions will more than likely be non existent. 

This was under most views all speculative action and monetary losses for those in btc will have little to no meaningful value. Those in USD are holding a backed currency which has a non speculative valuation and loosing funds that were in fiat through any action gives cause to this suit.


In summation it would be advisable for those with large sums to locate their own reputable firms and seek advisement from attorneys based in Japan. Hopefully people are not blindly sending money to a group trying to cash in further on the Gox meltdown.

[julz]

So, let's say you impatient folk sue based on all this hearsay and rumour... and it turns out there was enough BTC after all.

It's been what.. a week or so into a technical issue and you guys want to mire MTGox in lawsuits?  Do you know how much value this will eat in legal costs?
I think you've got big dumb balls to get involved with this so soon - as MTGox will go you for costs + damages if you're wrong.

[WompRat]

So, let's say you impatient folk sue based on all this hearsay and rumour... and it turns out there was enough BTC after all.

It's been what.. a week or so into a technical issue and you guys want to mire MTGox in lawsuits?  Do you know how much value this will eat in legal costs?
I think you've got big dumb balls to get involved with this so soon - as MTGox will go you for costs + damages if you're wrong.

MtGox have shown clear disregard for the very large sums of money that some people have entrusted them with.  Their communication has been poor bordering on the incompetent.  To top it off they chose to move offices in the middle of this crisis rather than work non stop until it was fixed.  They may have legitimate reasons why they can’t give people their bitcoins, but there should be no reason not to repay the fiat that is owed.  Either they have it or they don’t and at this point it seems the only way to find out is through a legal process.  Hopefully they will just transfer the funds to the law firm and this can be settled quickly.  If not then they will at least have to explain themselves in court.

[julz]

So, let's say you impatient folk sue based on all this hearsay and rumour... and it turns out there was enough BTC after all.

It's been what.. a week or so into a technical issue and you guys want to mire MTGox in lawsuits?  Do you know how much value this will eat in legal costs?
I think you've got big dumb balls to get involved with this so soon - as MTGox will go you for costs + damages if you're wrong.

MtGox have shown clear disregard for the very large sums of money that some people have entrusted them with.  Their communication has been poor bordering on the incompetent.  To top it off they chose to move offices in the middle of this crisis rather than work non stop until it was fixed.  They may have legitimate reasons why they can’t give people their bitcoins, but there should be no reason not to repay the fiat that is owed.  Either they have it or they don’t and at this point it seems the only way to find out is through a legal process.  Hopefully they will just transfer the funds to the law firm and this can be settled quickly.  If not then they will at least have to explain themselves in court.

I agree that their communication has been woeful.

Moving offices doesn't surprise or concern me. If I had employees working at an office that was being picketed - I'd be doing the same. It doesn't take much for people to be concerned for their safety, and you'd have employees on stress leave or unwilling to come in to work... not to mention getting your landlord and other businesses in the building offside.

Getting them to "explain" things to a Japanese court unfamiliar with Bitcoins sounds like a nightmare process to me.
It's entirely possible the court would go for the simplest (and dumbest) of options and force conversion of all BTC to yen at some low exchange rate for the purposes of resolving this in a way familiar to them.  That would be unfortunate for MTGox BTC holders.

I don't think a legal exercise in fishing for information, which may very well halt business operations, would be in the interests of those with funds in MTGox, fiat or BTC.

As for your claim that 'there should be no reason not to repay the fiat that is owed' - the slow withdrawal issues are a well-known separate issue unrelated to the BTC withdrawal problem.
Certainly there are reports of Euro & Yen withdrawals being processed recently, albeit slowly.  That is a function of their difficulties in processing huge volumes through the traditional banking system with its AML and verification requirements; and is the issue Roger Ver reported on recently when he stated something to the effect that it was not a liquidity issue.

I have significant holdings of BTC on MTGox, and I'm more concerned about the risks of premature legal action than anything.  

[WompRat]

I agree that their communication has been woeful.

Moving offices doesn't surprise or concern me. If I had employees working at an office that was being picketed - I'd be doing the same. It doesn't take much for people to be concerned for their safety, and you'd have employees on stress leave or unwilling to come in to work... not to mention getting your landlord and other businesses in the building offside.

Getting them to "explain" things to a Japanese court unfamiliar with Bitcoins sounds like a nightmare process to me.
It's entirely possible the court would go for the simplest (and dumbest) of options and force conversion of all BTC to yen at some low exchange rate for the purposes of resolving this in a way familiar to them.  That would be unfortunate for MTGox BTC holders.

I don't think a legal exercise in fishing for information, which may very well halt business operations, would be in the interests of those with funds in MTGox, fiat or BTC.

As for your claim that 'there should be no reason not to repay the fiat that is owed' - the slow withdrawal issues are a well-known separate issue unrelated to the BTC withdrawal problem.
Certainly there are reports of Euro & Yen withdrawals being processed recently, albeit slowly.  That is a function of their difficulties in processing huge volumes through the traditional banking system with its AML and verification requirements; and is the issue Roger Ver reported on recently when he stated something to the effect that it was not a liquidity issue.

I have significant holdings of BTC on MTGox, and I'm more concerned about the risks of premature legal action than anything.  

If you have concerns for the safety of the staff then you contact the police who apparently were only too happy to move the protestors when another tenant complained.  I concede there may have been other security issues we are not aware of, but it looks exceedingly cowardly, especially when all the protestors wanted was some reassurance that their bitcoins were safe and a timescale as to when they would be released. 

As the original poster and litigant states,  MtGox uses a Japanese bank .  They seek to transfer what is owed to a Japanese account.  Any issues relating to international transfers are I would argue moot.  Any issues regarding bitcoin are also irrelevant.  A product was sold through their site for an agreed price and that money needs to be returned asap.  Any bitcoins remaining would have to be subject to a separate action should they choose to do so, but the key here is to get the money now. 

I hope you are able to recover all your bitcoins and I understand you are prepared to give them more time.  I know they recovered from one very serious breach in 2011, but to me this feels like the endgame and legal action now is probably better than legal action after the authorities step in.

[dynodog]

[/quote]
  Hopefully they will just transfer the funds to the law firm and this can be settled quickly.
[/quote]

Neither has any chance of happening.

[CompNsci]

Getting them to "explain" things to a Japanese court unfamiliar with Bitcoins sounds like a nightmare process to me.
It's entirely possible the court would go for the simplest (and dumbest) of options and force conversion of all BTC to yen at some low exchange rate for the purposes of resolving this in a way familiar to them.  That would be unfortunate for MTGox BTC holders.

...

I have significant holdings of BTC on MTGox, and I'm more concerned about the risks of premature legal action than anything.  

The appropriate settlement in the case of property owed is fair market value. That's pretty standard in a legal settlement. I agree there is some subtlety there with BTC, but I have more faith in the bankruptcy court figuring it out eventually and fairly (it will take some time) than I do in Mt. Gox at this point.

[CompNsci]

And in any case, it looks like the people who are going to file this suit are going to file it, so debates here are likely not going to affect that.

[repentance]

The latest WSJ article regarding MtGox might be of interest to this thread. It's paywalled, but has been quoted on reddit.  Bolding mine.

www.reddit.com/r/Bitcoin/comments/1ytb3o/japans_authorities_decline_to_step_in_on_bitcoin/

TOKYO—Investors with funds tied up at Mt. Gox are looking for guidance from local authorities on how to get their bitcoin back, but without success, highlighting the regulatory vacuum in which the bitcoin exchange operates in Japan.

Japanese financial authorities decline to take responsibility for the crypto-currency.

Tokyo-based Mt. Gox, which accounted for more than 80% of all bitcoin trading at one point last year, halted all customer bitcoin withdrawals earlier this month, saying a bug in the bitcoin software allowed some users to alter transactions, a flaw that could make fraudulent withdrawals possible.The exchange told customers last week it was still working on restarting bitcoin withdrawals.

On Monday, Mt. Gox chief Mark Karpeles resigned from the board of the Bitcoin Foundation, the most influential trade group advocating for the virtual currency. After the news, which came Sunday evening in New York, Mt. Gox bitcoin continued a recent slide, trading at around $150 late in Tokyo on Monday, while the Coindesk bitcoin index, which tracks the price of the currency on two other major exchanges, traded at $575. At the end of January, Mt. Gox bitcoin was at $939
.
Investors with bitcoins tied up at Mt. Gox have flown from as far away as the U.K. to protest outside the exchange’s offices. Some investors say they have contacted the Financial Services Agency, Japan’s banking watchdog, to ask regulators whether there are any rules protecting Mt. Gox customers, but obtained no clear answers.

Some lawyers and other legal experts say a deposit-taking entity such as Mt. Gox would normally fall under the FSA’s jurisdiction. The FSA, however, said it isn’t the agency’s job to supervise crypto-currency exchanges.

“Bitcoin isn’t a currency; it works as an alternative to currencies, like gold,” an FSA spokesman said Monday. “The FSA is in charge of currency-based services. Therefore, bitcoin exchanges are not a subject to our regulatory oversight.”

Unlike their counterparts in many major economies, including the European Union, China, Russia and the U.S., Japanese authorities have been relatively silent about bitcoin. When asked in December for his view on bitcoin generally, Bank of Japan Gov. Haruhiko Kuroda said that he was “very interested.” He said the central bank’s research arm was looking into the currency, but that he couldn’t comment further.

A Bank of Japan spokesman said Friday that the bank “is not in a position” to regulate bitcoin and its exchanges.

The Ministry of Finance said on Monday that it isn’t its job to supervise bitcoin and related services. The Ministry of Internal Affairs and Communications, which is in charge of information technology and related issues, said, “We are not in a position to make any judgments on this matter.”

Mr. Karpeles told The Wall Street Journal last week that he has discussed the company’s business model with Japanese authorities to ensure the firm was operating within the law. He didn’t elaborate. People with knowledge of Mt. Gox’s business say the exchange had had communications with the FSA. The FSA said Monday it hasn’t corresponded with Mt. Gox recently and hasn’t given the exchange any operational advice.

No country has recognized bitcoin as legal tender, though some accept it as a virtual payment method and have moved to regulate bitcoin exchanges. Mt. Gox registered as a money-services business in the U.S. in June last year after authorities said it wasn’t properly registered in the country.

There are also concerns about how authorities should respond to possible cases of fraud involving bitcoin, even if they don’t recognize bitcoin as a currency. In China, local media reported that three people were arrested for allegedly operating a fraudulent exchange and absconding with investors’ money last fall. The country’s central bank forbids financial institutions from doing bitcoin-related business, though individuals aren’t barred from trading the currency.

In the case of Mt. Gox, investors haven’t put forward fraud allegations but expressed concern that given the potential that bitcoins were improperly withdrawn in the past, the exchange might not be able to meet its commitments.

According to documents seen by The Wall Street Journal, Tibanne Co., which operates Mt. Gox, is expected to generate a small profit in the fiscal year ending in March from exchange transaction fees. The forecast, however, assumes bitcoin prices well above current levels.

Two people briefed on the exchange’s operations said the company has enough money to process all the customer withdrawal requests, saying external factors were behind any payment delays.

Eric Bosma, a 60-year-old part-time health-care worker from Mission, British Columbia, said he has been trading bitcoins for the past six months to try to earn extra income, but hasn’t been able to withdraw the roughly 5.25 bitcoins he has in Mt. Gox. “I have contacted Mt. Gox many, many times in the past two weeks and all I get is what seems to be bot emails,” he said in an email. “All I want is my bitcoin back.”

For more than a week, Londoner Kolin Burges spent his days camped outside the Mt. Gox offices, holding a sign reading “MT. GOX — WHERE IS OUR MONEY”. He had deposited 250 bitcoins at the exchange in early January, thinking to keep them there temporarily, but has been unable to withdraw them.

“I want to get my bitcoin back, or get Mt.Gox to bring back public confidence that the company is solvent and people’s money are safe,” said Mr. Burges as he started his protest on Valentine’s Day. Mr. Burges was later joined by another protester. The two added chairs and a live video stream to their setup. On the stream online, the two could be seen mostly checking their laptops, with signs propped up calling for others to join the protest.

Mt. Gox didn’t respond to phone calls and emailed questions about Mr. Karpeles’s resignation, its financial position or the status of its customers’ bitcoin. In an email interview last week, Mr. Karpeles declined to answer any questions about customers’ funds.

Other people interested in bitcoin are divided over the need for outside regulation.

“Mt. Gox seems to be the microcosm of why self-regulation doesn’t work,” as customers are left unprotected from potential losses, said Boston University professor Mark T. Williams. He acknowledged, though, that Japanese regulators are in a “precarious situation.”

Weighing in on the Mt. Gox matter would force authorities to become an active enforcer of bitcoin businesses, yet continued silence could invite other Japanese businesses to start trading bitcoin, he said.

Many in the bitcoin community say regulation goes against the spirit of the currency.

“Philosophically I’m opposed to the very idea of regulation,” Roger Ver, a well-known, Tokyo-based bitcoin investor said on Monday, though he added he couldn’t speak to the case of Japan. He also declined to speak specifically about Mt. Gox.

Patrick Murck, general counsel at the Bitcoin Foundation, told a U.S. congressional hearing in November that more work needed to be done on the legal framework around bitcoin. “Though challenges exist, Bitcoin does not pose a unique or unsolvable challenge to law enforcement or existing regulatory structures,” he said.

Meanwhile, Japan took a clear stance on regulations for protesters. Mr, Burges and his fellow protester, who spent last week outside of Mt. Gox’s offices, were told by police Friday that registration was needed in order to demonstrate. The two said they planned to continue their protest in other ways.

[ChrisJ]

So, let's say you impatient folk sue based on all this hearsay and rumour... and it turns out there was enough BTC after all.

It's been what.. a week or so into a technical issue and you guys want to mire MTGox in lawsuits?  Do you know how much value this will eat in legal costs?
I think you've got big dumb balls to get involved with this so soon - as MTGox will go you for costs + damages if you're wrong.

MtGox have shown clear disregard for the very large sums of money that some people have entrusted them with.  Their communication has been poor bordering on the incompetent.  To top it off they chose to move offices in the middle of this crisis rather than work non stop until it was fixed.  They may have legitimate reasons why they can’t give people their bitcoins, but there should be no reason not to repay the fiat that is owed.  Either they have it or they don’t and at this point it seems the only way to find out is through a legal process.  Hopefully they will just transfer the funds to the law firm and this can be settled quickly.  If not then they will at least have to explain themselves in court.

I agree that their communication has been woeful.

Moving offices doesn't surprise or concern me. If I had employees working at an office that was being picketed - I'd be doing the same. It doesn't take much for people to be concerned for their safety, and you'd have employees on stress leave or unwilling to come in to work... not to mention getting your landlord and other businesses in the building offside.

Getting them to "explain" things to a Japanese court unfamiliar with Bitcoins sounds like a nightmare process to me.
It's entirely possible the court would go for the simplest (and dumbest) of options and force conversion of all BTC to yen at some low exchange rate for the purposes of resolving this in a way familiar to them.  That would be unfortunate for MTGox BTC holders.

I don't think a legal exercise in fishing for information, which may very well halt business operations, would be in the interests of those with funds in MTGox, fiat or BTC.

As for your claim that 'there should be no reason not to repay the fiat that is owed' - the slow withdrawal issues are a well-known separate issue unrelated to the BTC withdrawal problem.
Certainly there are reports of Euro & Yen withdrawals being processed recently, albeit slowly.  That is a function of their difficulties in processing huge volumes through the traditional banking system with its AML and verification requirements; and is the issue Roger Ver reported on recently when he stated something to the effect that it was not a liquidity issue.

I have significant holdings of BTC on MTGox, and I'm more concerned about the risks of premature legal action than anything.  

You make some good points here that I had not considered, notably that getting a court involved would probably only make things worse. I have however posted a public request on Twitter and Reddit which so far seems to be getting some support.

I am open to suggestions on this. Right now where I am is that I don't think it's wise that we sit back and wait. We have an opportunity to show to the world that we can get organised and bring some much needed closure to this issue. I propose we all start putting pressure on Gox to declare the facts. IF Mark has screwed up and feels it is going to be embarrassing for him then someone needs to go in to the offices and talk him down and tell the truth.

[repentance]

I am open to suggestions on this. Right now where I am is that I don't think it's wise that we sit back and wait. We have an opportunity to show to the world that we can get organised and bring some much needed closure to this issue. I propose we all start putting pressure on Gox to declare the facts. IF Mark has screwed up and feels it is going to be embarrassing for him then someone needs to go in to the offices and talk him down and tell the truth.

Bitcoin Foundation members have tried reaching out to Mark.  Some have offered him both money and technical resources.  

I don't think that he's more likely to listen to users at this point than he is to listen to other business people or to give answers to users that he's not willing to give the media.

MtGox has so many users that it's not reasonable to expect they're all going to be in agreement on how to approach this situation.  It's the right of users to protect their own best interests and to do so in the manner they see fit.  It's the obligation of each user to obtain professional advice about how best to do that.  

Frankly, the "wait and give them a chance to sort things out" approach has historically not ended well in the world of Bitcoin exchanges.  It needs to be acknowledged that such an approach can leave users collectively worse off.

Some people are going to be unhappy with the approaches taken by others.  That is inevitable.  It doesn't, however, mean that those approaches are objectively wrong or should not be taken.

I don't believe there are any options which will bring rapid "closure", though.

[Nagle]

So, let's say you impatient folk sue based on all this hearsay and rumour... and it turns out there was enough BTC after all.
 It's been what.. a week or so into a technical issue and you guys want to mire MTGox in lawsuits?  Do you know how much value this will eat in legal costs? I think you've got big dumb balls to get involved with this so soon - as MTGox will go you for costs + damages if you're wrong.

It's been half a year since Mt. Gox started dragging their feet on withdrawals. The "two week hiatus" on US dollar withdrawals from July 2013 never ended.

Mt. Gox has no counterclaim here. This is debt collection. It doesn't even matter whether Mt. Gox "has the Bitcoins". The only question is whether they're paying their debts, which, clearly, they are not.

That's why it's time to put Mt. Gox into involuntary bankruptcy.

[repentance]

So, let's say you impatient folk sue based on all this hearsay and rumour... and it turns out there was enough BTC after all.
 It's been what.. a week or so into a technical issue and you guys want to mire MTGox in lawsuits?  Do you know how much value this will eat in legal costs? I think you've got big dumb balls to get involved with this so soon - as MTGox will go you for costs + damages if you're wrong.

It's been half a year since Mt. Gox started dragging their feet on withdrawals. The "two week hiatus" on US dollar withdrawals from July 2013 never ended.

Mt. Gox has no counterclaim here. This is debt collection. It doesn't even matter whether Mt. Gox "has the Bitcoins". The only question is whether they're paying their debts, which, clearly, they are not.

That's why it's time to put Mt. Gox into involuntary bankruptcy.

Not just that.  There is every reason to believe based on MtGox's own statements that if withdrawals are resumed they will be even slower than before (and SEPA and Japanese withdrawal times had already blown out prior to this).  Users aren't being given the option of exiting the game if that's not acceptable to them.

Even if MtGox is nominally solvent, this cycle of ever-increasing withdrawal times needs to be broken.  If it's solvent, there is no reason why it cannot return all customer balances while it sorts out its technical issues.  Instead, what it's currently promising is that getting funds out of MtGox is going to be even more difficult when withdrawals resume.  It's unilaterally imposing new terms and conditions without giving users the ability to opt out of accepting them.

That MtGox is not allowing people to withdraw their funds is not "hearsay and rumour".  That it had become increasingly difficult for people to withdraw funds from MtGox even prior to withdrawals being suspended by MtGox is also not "hearsay and rumour".  That MtGox has stated it will be imposing new withdrawal limits and "moderating" the pace of withdrawals when they resume is not "hearsay and rumour".  These are all facts.  People have every right to decide the situation in unacceptable to them and to seek recovery of their funds through other means, given that MtGox itself is suggesting that users won't simply be able to take their funds and go elsewhere when withdrawals resume.

Continuing to allow deposits and trading while they have unaddressed technical issues is at best unethical on the part of MtGox.  Those who have no assurances about when they'll ever be able to withdraw funds from MtGox have every right to take measures to ensure that MtGox is forced to operate transparently and ethically.  MtGox has nothing to fear from such action if it is, indeed, solvent.

[Tegija]

and it died...