Filing injunction by May 16 to release seized Mt. Gox bitcoins

[DrApricot]

Tuck Fheman made a powerful argument in a mid-March report stating that the bitcoins disappearing from Mt. Gox resulted from a seizure by one or more government agencies and subsequent gag order:

http://tuckfheman.com/post/79681539135/report-gov-most-certainly-seized-goxs-coins

It is true that very little, if any, information about what happened to the missing bitcoins has ever come to light. The story about Mt. Gox being hacked via the the transaction malleability bug in their software has been pretty thoroughly debunked at least for the vast majority of the missing coins. Also, $27 million in bank deposits is missing, and that most likely did not result from any software bug.

The Japanese government could also be involved, if not completely responsible for this seizure.

Should there be no progress, Tuck calls for an injunction to be filed after May 16 ordering the USG to release the seized bitcoins. Can legal work for filing this injunction somehow be crowd-funded? Who should attend to it?

[wemine]

My MT.GOX account lost probably 1BTC, MT.GOX is not responsible

[CompNsci]

That is a very interesting article, thanks for posting it.

Raises the idea that in fact it was a government seizure of the cold wallets back to the level of possible, rather than a crazy conspiracy theory.

[traderash@aol.com]

Mark did say that the Bitcoins were not lost, "just temporarily unavailable." It seems to make the most sense given the circumstances. Either that or we have to assume Karpeles is a complete idiot or a criminal genius. I find bot of those scenarios hard to swallow. A government seizure is the only explanation that takes into account all the facts assuming we our facts are accurate.

It seems illogical that we would not have any explanation about the "lost" Bitcoins after all this time. Any investigation should have been done a long time ago. Since we have heard nothing and the trail could be getting exponentially colder by the hour, it would seem that the powers that be would know this and must be doing it for a good reason (hopefully).

With Karpeles not being in jail and no lost Bitcoin explanation, it seems very likely that Karpeles is still ratting on all is Silk Road buddies. It would be nice to at least know if the Government has our coins or not though. I don't think it would hinder any investigation by confirming or denying the allegation.

I am all for filing a motion to compel/surrender and watching how the government responds. If they say F*** Off that is a good indication or if they deny there was any seizure/freeze then at least we can move forward.

[CompNsci]

Interesting, but what sort of action would this be?

[DrApricot]

Interesting, but what sort of action would this be?

I'm not sure what Tuck had in mind, nor am I any lawyer, but the basis should probably be something like the "innocent owner defence" in asset seizure.

See: 18 U.S. Code § 983 - General rules for civil forfeiture proceedings
http://www.law.cornell.edu/uscode/text/18/983

d) Innocent Owner Defense.—
(1) An innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute. The claimant shall have the burden of proving that the claimant is an innocent owner by a preponderance of the evidence.
(2)
(A) With respect to a property interest in existence at the time the illegal conduct giving rise to forfeiture took place, the term “innocent owner” means an owner who—
(i) did not know of the conduct giving rise to forfeiture; or
(ii) upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property.

Each "innocent owner" would then have to file a motion with the court, yet s/he must have legal standing in order to do so, and be represented by legal counsel.

It's a little confusing, because the agency behind the forfeiture is supposed to give notice, and any person losing the property have time to answer. With a "gag order" in place, this process sounds problematic at best.

It does not seem possible for a putative seizure of Mt. Gox's bitcoins and cash to have taken place without at least tacit, if not full, cooperation of the Japanese authorities. Perhaps the laws in Japan are rather different.

This whole affair is certainly not in the best interests of Japan's reputation as an attractive investment destination, since no investor would ever wish to be subject to any such government confiscation.

[renfr]

Why the 16th May?

[Aquent]

Why the 16th May?

The assumption is that the coins were seized in or around 16th of May.

The question of standing can be addressed by making the allegation that it is the gov who seized it. The gov would then have to accept or deny it.

[Imerman2]

Interesting, but what sort of action would this be?

I'm not sure what Tuck had in mind, nor am I any lawyer, but the basis should probably be something like the "innocent owner defence" in asset seizure.

See: 18 U.S. Code § 983 - General rules for civil forfeiture proceedings
http://www.law.cornell.edu/uscode/text/18/983

d) Innocent Owner Defense.—
(1) An innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute. The claimant shall have the burden of proving that the claimant is an innocent owner by a preponderance of the evidence.
(2)
(A) With respect to a property interest in existence at the time the illegal conduct giving rise to forfeiture took place, the term “innocent owner” means an owner who—
(i) did not know of the conduct giving rise to forfeiture; or
(ii) upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property.

Each "innocent owner" would then have to file a motion with the court, yet s/he must have legal standing in order to do so, and be represented by legal counsel.

It's a little confusing, because the agency behind the forfeiture is supposed to give notice, and any person losing the property have time to answer. With a "gag order" in place, this process sounds problematic at best.

It does not seem possible for a putative seizure of Mt. Gox's bitcoins and cash to have taken place without at least tacit, if not full, cooperation of the Japanese authorities. Perhaps the laws in Japan are rather different.

This whole affair is certainly not in the best interests of Japan's reputation as an attractive investment destination, since no investor would ever wish to be subject to any such government confiscation.

It seems to me it would be easier to conduct a freedom of information act request on information regarding Mt. Gox's customers Bitcoins.  This information should not give away anything about ongoing criminal investigations and should be accepted.  It would simply request different bureacracies such as the FBI or other likely involved agencies to release information as to the whereabouts and/or ownership powers over customers' Bitcoins.  Gets rid of the step of a legal case against the government which could take years.

After the request gives back information you would know whether the story is true or not, and the government would be able to continue its investigation, so it should be an easier way then forcing it to court from the get go.

[DrApricot]

Interesting, but what sort of action would this be?

I'm not sure what Tuck had in mind, nor am I any lawyer, but the basis should probably be something like the "innocent owner defence" in asset seizure.

See: 18 U.S. Code § 983 - General rules for civil forfeiture proceedings
http://www.law.cornell.edu/uscode/text/18/983

d) Innocent Owner Defense.—

It seems to me it would be easier to conduct a freedom of information act request on information regarding Mt. Gox's customers Bitcoins.  This information should not give away anything about ongoing criminal investigations and should be accepted.  It would simply request different bureacracies such as the FBI or other likely involved agencies to release information as to the whereabouts and/or ownership powers over customers' Bitcoins.  Gets rid of the step of a legal case against the government which could take years.

After the request gives back information you would know whether the story is true or not, and the government would be able to continue its investigation, so it should be an easier way then forcing it to court from the get go.

I'd be very surprised if someone hasn't already done a FOIA request, and imagine if the bitcoins and cash were actually seized, that there would be some kind of attempt to control political fallout from having ticked off tens of thousands of investors through collapsing Mt. Gox. Please keep in mind that the Japanese government could be involved too, if not completely responsible. Does Japan have a FOIA law?

[Aquent]

Interesting, but what sort of action would this be?

I'm not sure what Tuck had in mind, nor am I any lawyer, but the basis should probably be something like the "innocent owner defence" in asset seizure.

See: 18 U.S. Code § 983 - General rules for civil forfeiture proceedings
http://www.law.cornell.edu/uscode/text/18/983

d) Innocent Owner Defense.—
(1) An innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute. The claimant shall have the burden of proving that the claimant is an innocent owner by a preponderance of the evidence.
(2)
(A) With respect to a property interest in existence at the time the illegal conduct giving rise to forfeiture took place, the term “innocent owner” means an owner who—
(i) did not know of the conduct giving rise to forfeiture; or
(ii) upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property.

Each "innocent owner" would then have to file a motion with the court, yet s/he must have legal standing in order to do so, and be represented by legal counsel.

It's a little confusing, because the agency behind the forfeiture is supposed to give notice, and any person losing the property have time to answer. With a "gag order" in place, this process sounds problematic at best.

It does not seem possible for a putative seizure of Mt. Gox's bitcoins and cash to have taken place without at least tacit, if not full, cooperation of the Japanese authorities. Perhaps the laws in Japan are rather different.

This whole affair is certainly not in the best interests of Japan's reputation as an attractive investment destination, since no investor would ever wish to be subject to any such government confiscation.

It seems to me it would be easier to conduct a freedom of information act request on information regarding Mt. Gox's customers Bitcoins.  This information should not give away anything about ongoing criminal investigations and should be accepted.  It would simply request different bureacracies such as the FBI or other likely involved agencies to release information as to the whereabouts and/or ownership powers over customers' Bitcoins.  Gets rid of the step of a legal case against the government which could take years.

After the request gives back information you would know whether the story is true or not, and the government would be able to continue its investigation, so it should be an easier way then forcing it to court from the get go.

That's a very good idea

[itsunderstood]

Mark did say that the Bitcoins were not lost, "just temporarily unavailable." It seems to make the most sense given the circumstances. Either that or we have to assume Karpeles is a complete idiot or a criminal genius. I find bot of those scenarios hard to swallow. A government seizure is the only explanation that takes into account all the facts assuming we our facts are accurate.

It seems illogical that we would not have any explanation about the "lost" Bitcoins after all this time. Any investigation should have been done a long time ago. Since we have heard nothing and the trail could be getting exponentially colder by the hour, it would seem that the powers that be would know this and must be doing it for a good reason (hopefully).

With Karpeles not being in jail and no lost Bitcoin explanation, it seems very likely that Karpeles is still ratting on all is Silk Road buddies. It would be nice to at least know if the Government has our coins or not though. I don't think it would hinder any investigation by confirming or denying the allegation.

I am all for filing a motion to compel/surrender and watching how the government responds. If they say F*** Off that is a good indication or if they deny there was any seizure/freeze then at least we can move forward.

Wow, just like I said in the epic MtGox theft thread, and was ridiculed.

I knew I was right, thanks for coming to see the light.  Were you watching the big thread when the crash and theft went down?