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Author Topic: To Bitstamp: Gox's coins are being sold on your exchange  (Read 5350 times)
mintymark
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March 23, 2014, 06:04:26 PM
 #21

The law of dealing with any type of stolen property.  This is an old old law, dating back to biblical times and is represented in Uk, US and most modern legal systems.

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WhatTheGox
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March 23, 2014, 06:04:46 PM
 #22

time for bitstamp to step up
bassclef
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March 23, 2014, 06:05:13 PM
 #23

Any smart thief would not do this. Bitstamp requires KYC/AML verification for any deposits or withdrawls, BTC or fiat, meaning a scanned copy of their ID must be submitted.

It's also likely they may not cash these coins out for some time in order to wait for the investigation to blow over, and also knowing they'll probably be worth more in the future anyway. There is not a lot of incentive for them to sell now.
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March 23, 2014, 06:10:38 PM
 #24

There isn't a central issuing authority to appeal to, that's one of the key basic appeals of Bitcoin and also one of it's biggest flaws.......

Bitcoin transfers are either irreversible or they're not, you cannot have it both ways.

That said there should be legal remedies against deliberate criminal acts, but you cannot undo previous transfers.

The analogy is cash, if someone steals your cash, you have a right to try to reclaim it from the thief, but if he has spent it you cannot trace those dollar bills and demand them back from the new owners, provided they were not complicit in the theft.

In this instance, there is no way of unwinding these movements. The only remedy would be to prove that the recipient knew they were fraudulent, or did not check sufficiently, then they might be liable to make repayment, but it would be from any coins they owned now, not any old ones and only after a court battle I'd imagine. Personally I doubt it could be proved that any movements did not have some plausible reason for existing and may indeed have been genuine.

The bigger issue is that world of Bitcoin wants to be anonymous, unaccountable, untraceable and subject to no rules, until such point as bad things happen and then suddenly people want the comfort and safety that these rules were designed to create in the real real world. You cannot have it both ways folks!
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March 23, 2014, 06:16:30 PM
 #25

The law of dealing with any type of stolen property.  This is an old old law, dating back to biblical times and is represented in Uk, US and most modern legal systems.

The problem with this is I don't think "ownership" of an amount of bitcoin has been legally established to be property.   It truly is nothing but ledger entries on a public database, not like taking control of physical property like blood diamonds or Nazi gold.

I think the legal framework will rely on laws concerning fraud, not stolen property.

If I coerce or fool you into giving me access to your online bank account, transfer the money to another account under my control,  Did I steal your property or did I defraud you?
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March 23, 2014, 06:43:27 PM
 #26

Question is are bitstamp legaly obligated to investigate solely on some online notification? I do not think so and that would be a huge mess and possible abuse by bogus claims.

Are the police legally obligated to investigate if a teen is truly going to kill himself live via Facebook if some random person on the internet informs said suicider's local PO?

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March 23, 2014, 06:51:59 PM
 #27

I think pointless comparisons aside, the authorities take proceeds of crime very seriously because 9 times out of 10 that money goes into other criminal activity and makes their key mandate to curb crime in general that much harder. If you get notified and you do nothing you are asking for trouble.
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March 23, 2014, 06:58:05 PM
 #28

strange:

Deleted Post
« Sent to: franky1 on: Today at 06:43:10 PM »

Quote from: Bitcoin Forum
A reply of yours, quoted below, was deleted by a Bitcoin Forum moderator. Posts are most frequently deleted because they are off-topic, though they can also be deleted for other reasons. In the future, please avoid posting things that need to be deleted.

Quote
Bitstamp has been for a long time bugging people with all kinds of AML stuff in situations where money laundering does not really seem relevant at all.
see for example: https://bitcointalk.org/index.php?topic=406908.0

Now we have a situation where we have a very high probability money laundering ongoing and so now it is time to see whether bitstamp was really serious with the AML stuff or whether the all AML in bitstamp was just bullshit invented in order to bug the little people.
+1

ab8989's message still appears so that cant be the reason (his message being at fault) and deleting the message because of wasted space, well.. they sent me a message informing me they deleted, which takes up more data on their hosted space compared to just leaving the message where it is..

very weird. ohwell my +1 is a valid addition to the topic as it emphasizes the message so here it is back again and also includes alot more writing.

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
pungopete468
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March 23, 2014, 07:13:47 PM
 #29

The problem is the AML law being vague. The law doesn't require an official letter; if the email to Bitstamp was opened then from that moment the burden is shifted to Bitstamp to ensure compliance with the law.

If the Bitcoins were stolen and are linked to Gox; the coins are under control by Bitstamp. The user who deposited the coins isn't in control of those coins. Bitcoin has already been ruled subject to current AML laws. Bitstamp is responsible for the fate of those coins from the moment they opened the email.

As a financial institution, Bitstamp is required to place a hold on those funds and investigate the allegations. That's the law and there are consequences to breaking it.

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alfabitcoin
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March 23, 2014, 07:58:58 PM
Last edit: March 23, 2014, 09:11:08 PM by alfabitcoin
 #30

Question is are bitstamp legaly obligated to investigate solely on some online notification? I do not think so and that would be a huge mess and possible abuse by bogus claims.

Are the police legally obligated to investigate if a teen is truly going to kill himself live via Facebook if some random person on the internet informs said suicider's local PO?
My post were related to prior poster, but i did not quote it, you are free to read it yourself but here is part of it.
I do not see relation here, facebook, police, suicide, wow what if kind of response, a? Hmm, what do you think, call police and ask them?
Further, i believe bitstamp is obligated to do only if ordered from court or law enforcement. And of course they can investigate internally all they want, but after acts  of such investigation are different matter. Investigation can start from different reasons but its usualy closed outside the public.
Also, is bitstamp financial institution regulated with uk FCA? Bitstamp claim that bitcoin is not regulated in the UK.


Quote
After being notified, Bitstamp has a legal obligation to inquire into the origin of these coins
seriouscoin
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March 23, 2014, 08:05:12 PM
 #31

strange:

Deleted Post
« Sent to: franky1 on: Today at 06:43:10 PM »

Quote from: Bitcoin Forum
A reply of yours, quoted below, was deleted by a Bitcoin Forum moderator. Posts are most frequently deleted because they are off-topic, though they can also be deleted for other reasons. In the future, please avoid posting things that need to be deleted.

Quote
Bitstamp has been for a long time bugging people with all kinds of AML stuff in situations where money laundering does not really seem relevant at all.
see for example: https://bitcointalk.org/index.php?topic=406908.0

Now we have a situation where we have a very high probability money laundering ongoing and so now it is time to see whether bitstamp was really serious with the AML stuff or whether the all AML in bitstamp was just bullshit invented in order to bug the little people.
+1

ab8989's message still appears so that cant be the reason (his message being at fault) and deleting the message because of wasted space, well.. they sent me a message informing me they deleted, which takes up more data on their hosted space compared to just leaving the message where it is..

very weird. ohwell my +1 is a valid addition to the topic as it emphasizes the message so here it is back again and also includes alot more writing.


psshhh.... Hazek doesnt like it.....
bananas
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March 23, 2014, 08:07:37 PM
 #32

Legally they have to do something about it once they are warned or they will be complicit. It is valid to anyone or any company.
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March 23, 2014, 08:13:20 PM
 #33

Where would the legal liability begin?  Bitstamp can't be held accountable for not reading every bitcoin forum or respond to a random emails.   However, legal counsel representing the creditors should immediately notify Bitstamp that the funds are suspected stolen.

Please discuss: https://bitcointalk.org/index.php?topic=527955.0

Any better idea or improvements of the concept are highly appreciated!

We just need to start to collect all these addresses more structured.

ex-trader
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March 23, 2014, 08:24:14 PM
 #34

Legally they have to do something about it once they are warned or they will be complicit. It is valid to anyone or any company.

Correct.

If MTGOX still have a balance of coins or cash at BitStamp, then it should be frozen and held accountable to the insolvency practioners in Japan who are liquidating MTGOX.

However, if they were moved on from Bitstamp, or converted to Fiat and withdrawn by MTGOX before Bitstamp had any notice of wrong-doing, then Bitstamp would not liable for the actions of MTGOX. As said they could also simply be customers of MTGOX moving their coins to Bitstamp.

If MTGOX knew it had coins or cash still on deposit at Bitstamp, then they should have been reported to the liquidator as an asset an included in the financial returns.

The chance that this will result in extra coins for the MTGOX customers seems very slim indeed.
alfabitcoin
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March 23, 2014, 08:28:58 PM
 #35

Legally they have to do something about it once they are warned or they will be complicit. It is valid to anyone or any company.

Correct.

If MTGOX still have a balance of coins or cash at BitStamp, then it should be frozen and held accountable to the insolvency practioners in Japan who are liquidating MTGOX.

However, if they were moved on from Bitstamp, or converted to Fiat and withdrawn before MTGOX had any notice of wrong-doing, then Bitstamp would not liable for the actions of MTGOX.
Only if such accounts are held under mtgox name then yes, such funds need to be frozen and trastee informed.
 ( regarding other note, mtgox are not being liquidated at time being, only rehabitilated and under protection).
ifritsultan
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March 23, 2014, 08:44:02 PM
 #36

This is deep shit. Thanks for the post.

BTW: Are you the aquent from the MK&aquent irc-log, which has been posted a few days ago?
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March 23, 2014, 09:00:44 PM
 #37

somehow it's sounds to easy, I doubt any thief with a huge amout of btc, that will trade them just like that directly, and also will be using all sort of means to spread the btc, being it exchanging to other cryptos using other exchange ect ect, another thing, right now it's too hot to exchange the stolen btc, he would either have done it before is there was enough time or will wait a year or two at least
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March 23, 2014, 10:08:26 PM
 #38

8 hours now and no reply from Bitstamp. What on earth are they up to?

I think we need an answer immediately. Either the account is locked or you - bitstamp - do not feel you are in a position to do so. We need to know either way so that we can consider our other legal options available.
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March 23, 2014, 11:02:10 PM
 #39

tl;dr version: Did Gox allow preferred clients to keep shared private keys to BTC on the exchange, which allowed them to independently move their funds out?

I do not know.  However, if Gox did make that accommodation, then it would be smart for any such clients to expeditiously move their funds to wallets that Gox holds no control over,  as soon as they learned of any financial troubles or probable failure of Gox.

If such 'whales' were not willing to trust Gox sufficiently to deposit their BTC with Gox in a manner that they would lose all direct control over them,  then for sure they should not trust Gox now   not to yank the coins out of the shared wallet into a Gox trustee-controlled wallet,  in order to pay other creditors and fund Gox's rehabiliation.

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March 23, 2014, 11:07:37 PM
 #40

somehow it's sounds to easy, I doubt any thief with a huge amout of btc, that will trade them just like that directly, and also will be using all sort of means to spread the btc, being it exchanging to other cryptos using other exchange ect ect, another thing, right now it's too hot to exchange the stolen btc, he would either have done it before is there was enough time or will wait a year or two at least

Don't assume too much. A US president got impeached for getting sucked off.

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