Proposal: Consensus rule to recover 79,956 BTC stolen from MtGox

[MagicalTux]

Some others will suggest that dormant addresses belong to Satoshi can be added to the pool of recovered bitcoin. Then later, each time a hack incident will happe, someone will call for another new consensus rule to recover stolen funds. This will destroy the bitcoin concept in full. No way this will be accepted except for MYgox victims who are few people considering that time when the incident happen.

This case is quite unique for multiple reasons.

The bitcoins haven't moved, can be directly linked to the theft (those do not belong to Satoshi but to the mtgox hack itself). The coins have been tagged, and the hacker clearly knows moving these would trigger news worldwide instantly.

How are you sure that that address really belongs to hacker? It's a great probability but still not 100% sure about this. Maybe time will tell. The hacker can use mixers or even create his own mixer to bury all logs and run away with clean bitcoins. Nothing can stop him from doing so if the address really belong to him, or maybe he is waiting for an exact date. All scenarios are possible.

There aren't many events that affected so many Bitcoin users as MtGox (arguably most bitcoin users had an account on MTGox in 2014), where we both know which bitcoins are the stolen bitcoins and have a legal process that would allow distribution of said coins back to creditors.

There might be events in the future that will affect so many bitcoin usersmore than MTgox incident. Should we then suggest a new consensus rule to recover them as well?

If we have another really clear cut case then why not, but I doubt we'll see future case similarly impacting all of bitcoin users at the time.

We know this address belongs to the hacker thanks to the blockchain. Stolen coins have landed on this address. No intermediary.

[runam0k]

Ok, but what's the argument here, besides 'it's not Ethereum'?

Bitcoin not bending the way Eth did is a very strong argument.

[BlackHatCoiner]

April 1st is in 33 days, not today.

[PrivacyG]

• Unambiguous theft. This isn't a dispute about ownership. Law enforcement in multiple jurisdictions confirmed the hack. There is no question these coins were stolen.

This is the biggest problem.  Bitcoin should be independent from what Law Enforcement decides in any jurisdicstions, even if world wide.  Bitcoin HAS to remain independent if we want it to be any different from all the Central Bank Currencies coming up soon around the world.

There is no question the Coins were stolen.  Yes.  BUT.  The main problem was that these Bitcoin of so many people were at the time sitting in one single hand.  This is NOT the fault of Bitcoin and it should NOT be a thing Bitcoin has to resolve.  It is the people, the victims who have to learn that Bitcoin is here for NO CUSTODY necessary.  Yes this means you can not make Money doing Trading as easy as a Centralized Exchange allows you to do it, but it is the cost we all pay for this independency from the Law Enforcement and from ANY Third Party.

It is a precedent that would change Bitcoin for ever.  It is in fact to me an outrageous request!  I am also going to move FAR away from Bitcoin as soon as things like these are introduced.  If this theft is reversed then what about some Money I may have received that was 26 Transactions ago part of a Wallet owned by Epstein and used in the trafficking! That Money deserves to be given to the victims or spent on preventing future trafficking, right?

In fact.  If Law Enforcement makes the rules then what about making a proposal to hand them the control handle over so when some crime is clearly a crime they can take that Bitcoin right back from the hands of the criminal!  I am presuming it can be written in such a way that multiple courts from multiple countries have to sign some sort of thing digitally in order to provide the required consensus.  How about this?

This large but basic theft is NO THING compared to many other crimes and particularly compared to so many things the leadership of a possible future dystopian society could stage only so Bitcoin becomes more and more restricted.  Bitcoin is NOT about this!

This is outrageous and I agree with what another Member said.  If this happens, I am OUT!

[NotFuzzyWarm]

Ok, but what's the argument here, besides 'it's not Ethereum'?

Bitcoin not bending the way Eth did is a very strong argument.

BTC being immutable is it's key point, one that distinguishes it from most if not all altcoins. The ONE time anything like this was done was many many years to correct effects the bug in Core that allowed a hacker to generate over 1 billion coins. That fix affected only 3 or 4 blocks because the bug was very quickly found after it was exploited.

[cezar1]

If there's one thing i know is not your keys, not your coins - every exchange does some kind of rehypothecation with the bitcoin they're holding.

Exempting Mt Gox holders from this lesson is a bad precedent.

[paraboul]

Ok, but what's the argument here, besides 'it's not Ethereum'?

Bitcoin not bending the way Eth did is a very strong argument.

Sometimes an unlikely event might happen, like your registration date being exactly the same as mine.

[Stalker22]

I do not believe that the risk associated with this proposal is worth the benefit.

I can certainly acknowledge that you have solid PRO arguments concerning this issue, but please consider the issue from an objective viewpoint and on its own merits, in relation to how blockchain works. Many people in the Bitcoin community feel that if you start "fixing" the ledger for one group, it could open the floodgates for governments or other interest groups to intervene, regardless of the justification, which could undermine the very security that Bitcoin is built on, ultimately destroying its value.

On this basis, the proposal would likely have a positive effect on a small group of individuals who have been financially harmed from the hacking event; however, it poses the risk of potentially creating an extremely negative effect for all others involved in the Bitcoin ecosystem. To me, this risk far exceeds the potential benefits.

[MagicalTux]

• Unambiguous theft. This isn't a dispute about ownership. Law enforcement in multiple jurisdictions confirmed the hack. There is no question these coins were stolen.

This is the biggest problem.  Bitcoin should be independent from what Law Enforcement decides in any jurisdicstions, even if world wide.  Bitcoin HAS to remain independent if we want it to be any different from all the Central Bank Currencies coming up soon around the world.

There is no question the Coins were stolen.  Yes.  BUT.  The main problem was that these Bitcoin of so many people were at the time sitting in one single hand.  This is NOT the fault of Bitcoin and it should NOT be a thing Bitcoin has to resolve.  It is the people, the victims who have to learn that Bitcoin is here for NO CUSTODY necessary.  Yes this means you can not make Money doing Trading as easy as a Centralized Exchange allows you to do it, but it is the cost we all pay for this independency from the Law Enforcement and from ANY Third Party.

It is a precedent that would change Bitcoin for ever.  It is in fact to me an outrageous request!  I am also going to move FAR away from Bitcoin as soon as things like these are introduced.  If this theft is reversed then what about some Money I may have received that was 26 Transactions ago part of a Wallet owned by Epstein and used in the trafficking! That Money deserves to be given to the victims or spent on preventing future trafficking, right?

In fact.  If Law Enforcement makes the rules then what about making a proposal to hand them the control handle over so when some crime is clearly a crime they can take that Bitcoin right back from the hands of the criminal!  I am presuming it can be written in such a way that multiple courts from multiple countries have to sign some sort of thing digitally in order to provide the required consensus.  How about this?

This large but basic theft is NO THING compared to many other crimes and particularly compared to so many things the leadership of a possible future dystopian society could stage only so Bitcoin becomes more and more restricted.  Bitcoin is NOT about this!

This is outrageous and I agree with what another Member said.  If this happens, I am OUT!

I should have added this theft is also widely confirmed in community, and as far as I know it is public and shared knowledge that bitcoins on 1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF were stolen from MtGox.

I'm not trying to bring this as a law enforcement issue, but as a community discussion. Those bitcoins are obviously stolen, sitting on an address labelled "MtGox Hacker" for some 15 years. This is a unique case where something can be done. I'm not asking to clawing back funds from people who are not involved in crime (that can happen in real life if you buy stolen property, even if you didn't know about it) but a very specific and unique case.

Some people (faketoshi) have tried to get courts to give them those bitcoins, based on forged documentation. I am trying to appeal to the community.

[MagicalTux]

I do not believe that the risk associated with this proposal is worth the benefit.

I can certainly acknowledge that you have solid PRO arguments concerning this issue, but please consider the issue from an objective viewpoint and on its own merits, in relation to how blockchain works. Many people in the Bitcoin community feel that if you start "fixing" the ledger for one group, it could open the floodgates for governments or other interest groups to intervene, regardless of the justification, which could undermine the very security that Bitcoin is built on, ultimately destroying its value.

On this basis, the proposal would likely have a positive effect on a small group of individuals who have been financially harmed from the hacking event; however, it poses the risk of potentially creating an extremely negative effect for all others involved in the Bitcoin ecosystem. To me, this risk far exceeds the potential benefits.

I'd like to underscore that the "small group of individuals" would be nearly all people involved with Bitcoin in 2014. This is also a very unique case as I do not know any other theft where coins have been clearly tagged and sitting for so long.

So if the threshold for action is "nearly 100% of bitcoin users at the time affected, bitcoins track clear, bitcoins not moving for multiple years" there are no chances for this to happen again.

[MagicalTux]

If there's one thing i know is not your keys, not your coins - every exchange does some kind of rehypothecation with the bitcoin they're holding.

Exempting Mt Gox holders from this lesson is a bad precedent.

Even recovering those 80k BTC wouldn't make people whole as over 550k were stolen and laundered in Russia. I'm bringing this up as these have been sitting unmoving for nearly 15 years, clearly stolen.

[NotFuzzyWarm]

I'd like to underscore that the "small group of individuals" would be nearly all people involved with Bitcoin in 2014

Ah, no. I for one used Core for my cold storage and used Blockchain.com & Coinbase for trading. There were other exchanges around then as well.

[PrivacyG]

I'm not trying to bring this as a law enforcement issue, but as a community discussion. Those bitcoins are obviously stolen, sitting on an address labelled "MtGox Hacker" for some 15 years. This is a unique case where something can be done. I'm not asking to clawing back funds from people who are not involved in crime (that can happen in real life if you buy stolen property, even if you didn't know about it) but a very specific and unique case.

Some people (faketoshi) have tried to get courts to give them those bitcoins, based on forged documentation. I am trying to appeal to the community.

Who do these Bitcoins get sent to?  Who confirms that the recepients are going to be the actual victims of the theft?  If it is any Third Party, there is a lot of room for error and there is a lot of room for injustice.  What happens to the Bitcoin that does not get claimed by the victims?

Bitcoin is once again supposed to never involve any Third Party.  There are many unique cases.  Nancy Guthrie kidnapping is an unique case.  Any Ransom receiving Addresses, any Address displayed on all of these 'Send your Bitcoin to Musk and he will send you 2X!' are clearly and undeniably Addresses belonging to criminals.  Many of them are or were making at least a couple dozen thousand Dollars a month from clearly crime.  What do we do with all of these then and why would the Bitcoin from 'MtGox Hacker' be returned to the victims while victims of torture and much worse are not being handed back their Bitcoin through consensus too?  I would argue the MtGox Hacker UTXO is although large, less important than the kidnap case of Nancy.

If there is one thing this consensus will achieve, it is definitely a lot of distrust in Bitcoin.

[Stalker22]

I'd like to underscore that the "small group of individuals" would be nearly all people involved with Bitcoin in 2014.

Even if thats the case, it still represents a minority compared to total number of users today.  Although we dont have exact figures, I think we can safely reach that conclusion. 

This is also a very unique case as I do not know any other theft where coins have been clearly tagged and sitting for so long.

So if the threshold for action is "nearly 100% of bitcoin users at the time affected, bitcoins track clear, bitcoins not moving for multiple years" there are no chances for this to happen again.

Of course, I already said that I understand your argument, but dont you think such a precedent would have a negative impact on all of us?  From the perspective of the majority, is it worth the risk?

[MagicalTux]

I'm not trying to bring this as a law enforcement issue, but as a community discussion. Those bitcoins are obviously stolen, sitting on an address labelled "MtGox Hacker" for some 15 years. This is a unique case where something can be done. I'm not asking to clawing back funds from people who are not involved in crime (that can happen in real life if you buy stolen property, even if you didn't know about it) but a very specific and unique case.

Some people (faketoshi) have tried to get courts to give them those bitcoins, based on forged documentation. I am trying to appeal to the community.

Who do these Bitcoins get sent to?  Who confirms that the recepients are going to be the actual victims of the theft?  If it is any Third Party, there is a lot of room for error and there is a lot of room for injustice.  What happens to the Bitcoin that does not get claimed by the victims?

Bitcoin is once again supposed to never involve any Third Party.  There are many unique cases.  Nancy Guthrie kidnapping is an unique case.  Any Ransom receiving Addresses, any Address displayed on all of these 'Send your Bitcoin to Musk and he will send you 2X!' are clearly and undeniably Addresses belonging to criminals.  Many of them are or were making at least a couple dozen thousand Dollars a month from clearly crime.  What do we do with all of these then and why would the Bitcoin from 'MtGox Hacker' be returned to the victims while victims of torture and much worse are not being handed back their Bitcoin through consensus too?  I would argue the MtGox Hacker UTXO is although large, less important than the kidnap case of Nancy.

If there is one thing this consensus will achieve, it is definitely a lot of distrust in Bitcoin.

These would be going through the Japanese courts and trustee having jurisdiction over the MtGox bankruptcy case. It's not a perfect solution but considering the number of creditors it's probably the best.

As to criminal addresses (scams, etc), most exchanges are already blocking these from being redeemed, and some miners will not accept said txs. This is not yet a bitcoin-whole rule but will likely evolve over time.

I do not know that people will distrust Bitcoin for allowing people to recover a bit of their loss. If anything this could be fairly positive overall.

[MagicalTux]

This is also a very unique case as I do not know any other theft where coins have been clearly tagged and sitting for so long.

So if the threshold for action is "nearly 100% of bitcoin users at the time affected, bitcoins track clear, bitcoins not moving for multiple years" there are no chances for this to happen again.

Of course, I already said that I understand your argument, but dont you think such a precedent would have a negative impact on all of us?  From the perspective of the majority, is it worth the risk?

It depends on a lot of things, but if this is done properly the main negative impact it would have is for thieves. Of course the question is not to move coins without proper thought, and the main reason I'm trying to bring this into a discussion is to see what everyone thinks about it. It's been 12 years since the start of the bankruptcy and this is probably the last sore point on this whole case. This 1Feex address has been there, always, with ~80kBTC sitting on it that should have been part of the distribution to customers.

What do the majority of Bitcoin holders want? How do you compute the majority? If it's majority in amount, those are likely large companies that have little to no interest into Bitcoin's ideals and just care about making money. If you count as people it might be different, but I doubt a majority would support theft.

[samson]

- Try BIP 9 miner signaling and see how many mining pools would run the activation client. If enough pools participate, it could become another airdrop for everyone not just Mt. Gox customers.

- The recovery window should be unlimited.

If those coins ever move by whatever mechanism then I am going to want my share of them back.

I'm a creditor and have been paid what little was left of my Bitcoin from the bankruptcy - I got about 15% back.

But that did not include these of course as they can't access them.

One thought - if there's ever a post quantum preparation clean up then that might be the time to do something like this.

I would support obtaining a court order to claim these coins.

[gmaxwell]

Perhaps the post went out about a month early....

The trustee and 'creditors' sat on their ass and refused to say anything while a conman filed a financially ruinous lawsuit against a host of former developers over these same coins.  (Okay, Magicaltux wasn't entirely useless there, but anyone with any official standing absolutely was).

And why would anyone be interested in giving more coins to the mtgox trustee while they still haven't paid out all the coins they already have an continue to give all appearances of never completing their task?   More like you should be proposing the seize the assets from the trustee and actually distribute them.

In any case, you don't have to ask anyone's permission: anyone can create a bitcoin hardfork (which this would definitionally be) at any time-- and the free market is free to decide what coin they value.  What no one can do is force anyone else to use it, each person can decide for themselves what currencies they adopt.  There is no question of majorities here-- the validity of blocks is decided autonomously and independently by each user's node and not by any kind of quorum.

In agreement with most of the comments here I think a bitcoin with that kind of malleable ownership would be completely worthless.  If that's what people wanted they could have stuck with paypal and other payments alternatives that existed at the time of Bitcoin's creation and not ever bothered creating Bitcoin to begin with.  Bitcoin is all about biting the bullet.  There are certainly downsides of a system that makes ownership more real than a social compromise... but there are also phenomenal upsides of a currency that is "physically impossible for others to access, no matter for what reason, no matter how good the excuse, no matter what".  It's for those upsides we choose Bitcoin and all its associated costs.

[JackMazzoni]

No way, Bitcoin's reputation would go to zero and bitcoins value would go to zero. Don't make bitcoin lost its credibility because of your carelessness.

[blockdyor]

A hard fork, something like "Bitcoin Mt.Gox," might be the only realistic path to getting those coins back to their rightful owners. There's pretty much zero chance something like this ever gets through Bitcoin Core or @BitcoinKnots.