Criminal complaint against Mt. Gox and Mark Karpeles

[CompNsci]

While the multi-party lawsuit is an interesting civil case against Mt. Gox, it may be that a better approach for locking down records and increasing pressure on Mt. Gox to fix the withdrawal problem would be reporting them to the criminal justice system, with complaints of fraud.

It appears that both the Antimonopoly Act and the Unfair Competition Prevention Act in Japan may cover making deceptive promises and statements.

The other advantage of a criminal complaint is that it would hold the CEO responsible, versus the corporation itself.

Is there anyone in Japan who could contact the appropriate authorities?

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[Nagle]

If you're in the US, filing a complaint with the U.S. Securities and Exchange Commission is worth doing. They have jurisdiction over broker/dealers who sell directly to US persons, which Mt. Gox does. The SEC treats Bitcoin scams just like other scams, as Trendon Shavers found out. The SEC has a cooperation agreement with the Japan Financial Services Agency, so the SEC can make things happen in Japan. Mt. Gox can be dragged into a US court, as the ongoing Coinbase lawsuit demonstrates.

With all the publicity surrounding Mt. Gox right now, a phone call to the SEC's enforcement division from someone with significant funds stuck in Mt. Gox would probably get some attention. Ten such calls...

[yumei]

Please start your investigations, I will donate everybody who will start a criminal complaint with 1 Bitcoin !

Also I am willing to spend Bitcoins for everybody who helps with information about this case.

Especially because I am thinking that Mark Karpeles is involved into insider trading.

I am very angry that a bitcoin foundation member is fundamentaly harming the bitcoin community.

[smoothie]

If you're in the US, filing a complaint with the U.S. Securities and Exchange Commission is worth doing. They have jurisdiction over broker/dealers who sell directly to US persons, which Mt. Gox does. The SEC treats Bitcoin scams just like other scams, as Trendon Shavers found out. The SEC has a cooperation agreement with the Japan Financial Services Agency, so the SEC can make things happen in Japan. Mt. Gox can be dragged into a US court, as the ongoing Coinbase lawsuit demonstrates.

With all the publicity surrounding Mt. Gox right now, a phone call to the SEC's enforcement division from someone with significant funds stuck in Mt. Gox would probably get some attention. Ten such calls...

I think you meant "coinlab".

[btbrae]

Please start your investigations, I will donate everybody who will start a criminal complaint with 1 Bitcoin !

Also I am willing to spend Bitcoins for everybody who helps with information about this case.

Especially because I am thinking that Mark Karpeles is involved into insider trading.

I am very angry that a bitcoin foundation member is fundamentaly harming the bitcoin community.

So you are really offering 1 Bitcoin to each person who starts a complaint? If you are serious about that you should probably make a topic in the Service Discussion forum.

[lemfuture]

is this winnable?

[superduh]

 o please.
SEC deals with securities - which is what Trendon Shvares offered.
mtgox offers to "securities". all the legal experts here are not really experts.
besides the point Mark claims to be in contact with Japanese authorities so he's done the part for you

[anonuser777]

Funny how people go running to big brother (SEC, etc) to solve a problem. You yourself can personally deal with the issue by suing MtGox directly. The small claims court is not expensive, and MtGox probably wouldn't even show up due to the cost of actually hiring lawyers. If you've lost a significant amount then team up with other grown ups who are suing MtGox in higher courts. Stop whining on forums about it.

[CompNsci]

besides the point Mark claims to be in contact with Japanese authorities so he's done the part for you

Interesting, where did he claim that?

[superduh]

besides the point Mark claims to be in contact with Japanese authorities so he's done the part for you

Interesting, where did he claim that?

In his email interview with the [WS] Journal, Karpeles repeatedly said the company's solvency was confidential but that it had discussed its business model with Japanese authorities "to ensure that we are operating within the law here."

[Armis]

This type of action is EXACTLY what you guys really don't want.  You are literally asking for trouble.  

I'm telling you: Handle it internally, you don't want to invite the govt via any of their departments or agencies involved more that they already are.  


You're asking for the WRONG kind of help.  

If he gets locked up (criminal) or locked down (sec) either way you get locked out (funds frozen).

[CompNsci]

This type of action is EXACTLY what you guy really don't want.  You are literally asking for trouble.  

I'm telling you: Handle it internally, you don't want to invite the govt via any of their departments or agencies involved more that they already are.  


You're asking for the WRONG kind of help.  

If he gets locked up (criminal) or locked down (sec) either way you get locked out (funds frozen).

I suspect you are right. OTOH, I suspect it is inevitable. Some adult supervision is clearly needed here. Karpeles refuses to deal seriously with the situation.

[repentance]

besides the point Mark claims to be in contact with Japanese authorities so he's done the part for you

Mark's statement said that their "business model" is OK in the eyes of the regulators.  That doesn't mean for a minute that they're not breaking any laws. 

It's absolutely appropriate to bring to the attention of the authorities that MtGox has been increasingly restricting the ability of its users to withdraw their funds and ask those authorities to look into whether the company is knowingly continuing to take more user funds while actually insolvent.  They can be forced to disclose the the authorities information which they're not obligated to tell their users.  Action by the authorities is likely to bring a definitive answer about the solvency of MtGox far more quickly than litigation by users.

[anonuser777]

Funny how people go running to big brother (SEC, etc) to solve a problem. You yourself can personally deal with the issue by suing MtGox directly. The small claims court is not expensive, and MtGox probably wouldn't even show up due to the cost of actually hiring lawyers. If you've lost a significant amount then team up with other grown ups who are suing MtGox in higher courts. Stop whining on forums about it.

Your posts makes no sense. small claims court only applies to Residents of the country you are in....They sure as hell Don't apply if your complaint is against an Over seas Company.
So now what smart ass?

You're telling me MtGox has absolutely no assets in the US? I doubt that. A US court can seize anything under their jurisdiction, including a US-based bank account, private jet / company car in the US, whatever. If you've suffered damages then you can sue wherever you want. The only difficulty is collection (and transfer agreements are often in place - e.g. rack up a credit card bill in the USA, then try to run to the UK, and it won't be too difficult for the company to seize your UK assets via a UK court).

Why exactly are Coinlab suing MtGox in the US (Western District of Washington)? Are they smart asses too?

http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.docket.html

EDIT: Yes, coinlab, not coinbase.

[repentance]

Why exactly are Coinbase suing MtGox in the US (Western District of Washington)? Are they smart asses too?

http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.docket.html

That was probably the jurisdiction stipulated in the contract between Coinlab and MtGox.

It's unlikely that MtGox has any significant assets in the US any more.  The whole point of the Coinlab/MtGox deal was to put MtGox at arm's length from US transactions.  They already saw long ago that US based assets would make them vulnerable. The company MtGox set up in the US in order to funnel transactions already had its funds on hand seized.

MtGox customers can certainly launch action in the US against MtGox, but it might not be the optimum legal strategy against a company which isn't based in the US and whose bank accounts are held in Japan and Poland.  There is also no guarantee that MtGox would accept the authority of a US court.  They've refused so far to recognise the authority of NZ law in relation to the Bitcoinica funds still held on MtGox.  Litigation is expensive enough and there is no guarantee that a Japanese court would domesticate any orders made in the US.

If you want to take a US-based route, then using US regulators is likely to result in faster action and a quicker result than protracted litigation initiated by users (especially when you consider that MtGox may have to pay out large amounts when litigation already in progress is determined later this year).

[anonuser777]

Funny how people go running to big brother (SEC, etc) to solve a problem. You yourself can personally deal with the issue by suing MtGox directly. The small claims court is not expensive, and MtGox probably wouldn't even show up due to the cost of actually hiring lawyers. If you've lost a significant amount then team up with other grown ups who are suing MtGox in higher courts. Stop whining on forums about it.

Your posts makes no sense. small claims court only applies to Residents of the country you are in....They sure as hell Don't apply if your complaint is against an Over seas Company.
So now what smart ass?

You're telling me MtGox has absolutely no assets in the US? I doubt that. A US court can seize anything under their jurisdiction, including a US-based bank account, private jet / company car in the US, whatever. If you've suffered damages then you can sue wherever you want. The only difficulty is collection (and transfer agreements are often in place - e.g. rack up a credit card bill in the USA, then try to run to the UK, and it won't be too difficult for the company to seize your UK assets via a UK court).

Why exactly are Coinbase suing MtGox in the US (Western District of Washington)? Are they smart asses too?

http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.docket.html

No matter what you say you CAN'T bring Mtgox to small claims court as you posted.  The Company is based in Japan.  all of things you say the U.S. courts can do is true but not through small Claims court.

Once again your post makes no sense.

"Why exactly are Coinbase suing MtGox in the US (Western District of Washington)? Are they smart asses too?"
This is Not small claims court.

You have no idea what you are talking about. This especially "all of things you say the U.S. courts can do is true but not through small Claims court." If they don't pay up you can request an order to seize property to pay the judgment. Also, you can bring any company you want to a small claims court. If they don't turn up, then they can't dispute your arguments, and you win. The court will issue a judgment in your favor.

What exactly doesn't make sense? If I could explain it any better to you then please let me know.

[anonuser777]

lol ok  small claims court for Over seas companies.....Yep ok you're right .  G/L with that

Yep, not easy collecting your claim. I do wonder how it would work as the Feds do have some of MtGox's assets already (google "Feds Seize Assets From Mt. Gox’s Dwolla Account, Accuse It Of Violating Money Transfer Regulations"). I presume you could make a claim against that, but I would guess that the Feds have #1 priority on that cash and wont give it up easy.

[repentance]

lol ok  small claims court for Over seas companies.....Yep ok you're right .  G/L with that

Yep, not easy collecting your claim. I do wonder how it would work as the Feds do have some of MtGox's assets already (google "Feds Seize Assets From Mt. Gox’s Dwolla Account, Accuse It Of Violating Money Transfer Regulations"). I presume you could make a claim against that, but I would guess that the Feds have #1 priority on that cash and wont give it up easy.

It's possible that money will go to the government in a civil forfeiture and no-one will be able to claim against it.

[superduh]

lol ok  small claims court for Over seas companies.....Yep ok you're right .  G/L with that

Yep, not easy collecting your claim. I do wonder how it would work as the Feds do have some of MtGox's assets already (google "Feds Seize Assets From Mt. Gox’s Dwolla Account, Accuse It Of Violating Money Transfer Regulations"). I presume you could make a claim against that, but I would guess that the Feds have #1 priority on that cash and wont give it up easy.

It's possible that money will go to the government in a civil forfeiture and no-one will be able to claim against it.

that would suck since it's customer's funds and not even mtgox's that they seized. so they hurt the people for doing nothing wrong

[repentance]

lol ok  small claims court for Over seas companies.....Yep ok you're right .  G/L with that

Yep, not easy collecting your claim. I do wonder how it would work as the Feds do have some of MtGox's assets already (google "Feds Seize Assets From Mt. Gox’s Dwolla Account, Accuse It Of Violating Money Transfer Regulations"). I presume you could make a claim against that, but I would guess that the Feds have #1 priority on that cash and wont give it up easy.

It's possible that money will go to the government in a civil forfeiture and no-one will be able to claim against it.

that would suck since it's customer's funds and not even mtgox's that they seized. so they hurt the people for doing nothing wrong

This isn't usually a problem because most licensed money transmitters have more than enough assets to pay out customer balances even when they have to pay very large civil forfeitures.

There's inherent risk in using services you know to be unlicensed and uninsured, especially if they're small.  People might judge using the exchanges as being "worth the risk" of losing their funds to hacks, the operators running with the funds or regulators seizing the service and all its assets, but users know these risks exist and have little cause for complaint when those events actually happen.