Funds “frozen” in TyGrr-Bot’s MtGox account.

[TyGrr-PR]

Good day TyGrr-Bot shareholders and the Bitcoin community,

We are here to inform that significant amount of funds were frozen in the Tygrr-Bot’s Mt Gox account. The name of the account is “TyGrr-Bot”. The TyGrr-Bot account was set up by Chaang-Noi’s wife as she is a key member of the TyGrr-Bot operation. The account was AML verified and approved by Mt. Gox.

Magical Tux was made aware. Magical Tux personally gave permission to Chaang-Noi to allow his wife to set up an account and have it AML verified. The AML was not only approved but the limit on the account was raised when requested.

On April 19th Chaang-Noi’s wife sent an international wire to her own bank account in Thailand. The name on the bank account matches the name on the AML verification documents.

After this international wire was sent Chaang-Noi contacted Mt Gox staff (Not Magical Tux) to find out if an AML verified account could send money to their spouse. It was repeatedly made clear by a member of Mt Gox staff that this would not be a problem.

Two international wires were then sent to Chaang-Noi’s bank account in the USA.

Chaang-Noi’s wife opened a Mt Gox support ticket on the 27th and Mark Karpeles responded on the 28th. Less than 5 hours after his first response Mark Karpeles reported that these attempted transaction were illegal and were being reported to law enforcement agencies. Mark also noted that the funds could not be returned to the Mt Gox account because of “risk”. Terrorism and money laundering were mentioned however as no one has seen the copy of the police report we do not know what really has happened. Information about this has been requested twice but not yet responded to.

We have reason to suspect that Magical Tux is Mark Karpeles but this information has not been confirmed. If this is true we are confused by Mt Gox’s actions. Nevertheless we are ready to go to any court to defend charges made against us.

We would like to provide supporting information.

All of Chaang-Noi’s personal chats with Magical Tux in #MtGox on freenode on edited and in full
Chaang-Noi> Hello, are you around?
<MagicalTux> yes
<Chaang-Noi> would it be best to use my wifes id and a telephone bill with her name?
<MagicalTux> that'd work
<Chaang-Noi> im going to ahve to wait a while for the bill to come in :/
<Chaang-Noi> the address will be in thai. I assume that will be okay?
<MagicalTux> we'll try
<Chaang-Noi> how long does this normaly take? and do i risk getting my funds frozen while you look into this?
<MagicalTux> can take a couple of business days
<Chaang-Noi> okay that is not too bad. Thanks



<Chaang-Noi> Hello,
<Chaang-Noi> I would like to check on my account being verified. It has been about 10 days so far and I have heard nothing back.
<Chaang-Noi> Hi
<Chaang-Noi> About 2 weeks ago you asked me to send you my documents to get verified.
<Chaang-Noi> I did this but no responce.
<Chaang-Noi> I was told it would take 3 business days.
<Chaang-Noi> Is there anything I can do to help?
<Chaang-Noi> I wont add funds until I am verrified, I can not risk it getting frozen
<MagicalTux> what's your account ?
<Chaang-Noi> do you want the user name?
<MagicalTux> yes
<Chaang-Noi> TyGrr-Bot
<MagicalTux> I can see an email was sent to you on Mon 02 Apr 2012 confirming you were aml verified
<Chaang-Noi> oh, wow, let me check and see if i got that, if so i deeply apoligize!
<Chaang-Noi> Yes, I am very sorry about the trouble. I do have the e-mail!
<Chaang-Noi> can I at any time expand my limit?
<Chaang-Noi> i would like to leave it low now but might need to expand it later.
<Chaang-Noi> also I would like to say you guys seemed to verify me in about 24 hours. this was unexpected and why i missed it. again that you.
<MagicalTux> [17:26:20] <Chaang-Noi> can I at any time expand my limit?  <- email info@mtgox.com for more details
<Chaang-Noi> thanks mate! very happy you got the verification done in a day! thats awesome! peace!


<Chaang-Noi> Hi, Would you like to try and resolve the issue of the frozen TyGrr-Bot account here and now?


We would like to add supporting E-mails from Mt. Gox.

April 2nd
Dear TyGrr-Bot,

We are pleased to inform you that the identification documentation you have submitted has been reviewed, and your account has been upgraded to "Verified" status.

If you would like to request a withdrawal limit increase (up to 10x your current daily limit, and up to 5x your current monthly limit), please reply back to this email with the below.


Wallet (BTC/USD/ETC):
New Daily Limit:

Wallet (USD/EUR/ETC):
New Monthly Limit:

We sincerely apologize for the delays and any inconvenience which you have suffered in relation to the account verification process. If you continue to experience any issues, please do not hesitate to contact Mt.Gox Support.

April 19th
Hello,

We are pleased to inform you that the limits which you requested have now been applied to your account.

If you would like to make further enquiries in relation to this, please do not hesitate to contact Mt.Gox Support.

Kind regards,

Mt.Gox Support
Email: aml@mtgox.com

April 28th

Hi,
We confirmed transfers going to two different individuals, in two different countries. Because of financial laws on terrorism and money laundering, we are required to identify the owner of each account opened on MtGox, and ensure transactions are done by the individual registered with us.
Since this was not the case, we are investigating the issue and may forward the case to the appropriate law enforcement if required.
In the meantime we will need notarized physical copies of identification for both individuals you tried to transfer funds to, including original or notarized copy of utility bill. If your notary offers it, please also ask for an apostille.

Thanks,
Mark
MtGox.com Team


April 28th

Hi,
Please rest assured that this case is indeed being reported to the police. Until we understand why you have multiple identities in different countries, we cannot take the risk of executing the operations requested.
Thanks,
Mark
MtGox.com Team


We are very confused by this reaction as the photo on Chaang-Noi’s avatar has not only a photo of Chaang-Noi but also of his wife who is AML verified.
A request has been sent to for a clarification as to why the documents need to be resent as has a second request for information about the ongoing police investigation.
We are also confused as to why this was reported to law enforcement as what we have done is not a crime in Thailand, Japan or the USA. If this violated the policy of MT. Gox we would like to know why this policy has not been posted on the Mt Gox website or in its terms of service.

The point of this thread is not to attack Mt Gox but is to be informative of actions that have already taken place and to seek clarification of AML law and Mt Gox's policy.

We are willing to work with Mt Gox and law enforcement to resolve this issue as quickly as possible. Chaang-Noi and his wife’s lawyer in the USA have been made aware of the situation.

We have notified Mt Gox of this thread and hope they will take part or at least make note of helpful ideas for the betterment of the bitcoin world.


Local rules.

This thread was started to inform TyGrr-Bot stockholders and the community of the above situation. I would request that all questions or comments about TyGrr-Bot to be done in the TyGrr-Bot thread as it is not directly related. I would request that there is no trolling or off topic comments. I would request that there are no personal attacks in the thread on anyone involved, particularly Mt Gox staff. Helpful and polite productive criticism of policy is welcomed.

What we hope to accomplish is positive discussion on conflict resolution. Also positive discussion on related topics such as AML law, if you are an expert on the issue please inform the community.

[1715377073]

1715377073

[TyGrr-PR]

E-mail just sent to us.

Hi,

We request documents proving the link between the owner of the account and the individual listed as recipient of the withdraw request. As you may know, we only allow withdraws to be done to yourself as we do not provide financial services. This means you can not use our service to pay other people.

Considering you have refused to help us solve this case by providing details and that several factors cause the withdraw requests to be considered high risk, we cannot take responsibility and will forward the case to a court of law to investigate, forwarding them all the details and requesting all funds to be held and subsequently released by the court.

You may also want to know that if you intent to publicly discredit us for abiding to the law, it will at best hinder any attempt to recover funds through legal ways, and at worse force us to raise charges.


And our response.

Mark,

We are trying to resolve the situation and we are not trying to discredit. We are not lawyers and do not know if you are following the law or not. What we requested was specific information on how we can help you solve the problem. We asked you for a clerification of what documents you need. You let us know you needed some documents noterized on the 28th but we are asking for more specific information. We are not refusing to work with you and only giving us 2 day (one of them Sunday) for us to comply seems unreasonable. Can you be more clear as to what documents will help you to see that their are "links" between two married people? I assure you that the situation here is that a spouse is not paying a spouse. Mt Gox staff informed us that what we were doing would be fine. We are very unsure of the law and the policy and that is why we asked. Did the Mt Gox staff member give us bad advice? Was this wire request so bad that we now need the courts to get involved? Please send us all information needed to resolve the situation.

Thank you.

[TyGrr-PR]

New and productive e-mail just now from Mark.

Hi,

If it's about two married people, then it should be easy. We need the following documents:

- Marriage registration certificate (if not in english, please join translation)
- ID of the withdraw recipient
- Proof of address for withdraw recipient

You can scan and upload the documents via https://mtgox.com/forms/verification after logging in.


Thanks,
Mark
MtGox.com Team



This is something that can be done. We will comply soon. 

[MagicalTux]

Considering you are releasing your own version of the facts, I hereby request your authorization to release all the details we have to allow everyone reading this to be able to understand our position, which you make deliberately sound "bad".

[TyGrr-PR]

Considering you are releasing your own version of the facts, I hereby request your authorization to release all the details we have to allow everyone reading this to be able to understand our position, which you make deliberately sound "bad".

We understand that we have left out some information that would make your actions seem more reasonable. In fairness we wold like to list the ones that come to mind. If we are leaving anything out please PM and either we will give you permission or will state it for you. I am wiling to make this very fair and open. However permission to post all of our personal information is not really reasonable.

The last name of Chaang-Noi's wife was not legally changed until after AML verification. At the time of AML verification Chaang-Noi's wife did not have the same last name as Chaang-Noi. The AML verified last name however is on the marriage certificate and we also have dated documents to support this.

The other fact that we think you would like to make is that Chaang-Noi acted like an unprofessional asshole. The TyGrr operation does not deny this.

Documents TyGrr will send to Mt. Gox include,

Marriage certificate in Thai and translated into English.
Passport of Chaang-Noi.
Passport of Chaang-Noi's wife with the new name.
National ID of Chaang-Noi's wife with the new last name.
(more current) proof of residence.
Legal document showing when the name change happened in both Thai and in English.

We are willing to provide more documents upon request. We will also post more information about this case on the request of Mt. Gox.

Thank you.

[vampire]

@Goat : You need to set up a company (a legal entity, so both you and your wife are shareholders, worse case a joint account. This way you could have used a single MTGox account with your wife. Just say sorry to MtGox and ask them to fund back the money into the bot account. And wire into your's wife account. I don't think challenging them right now will do any good for anyone.

I don't know about international laws, but in US husband and wife are two different legal entities. Meaning my wife cannot do anything with an account under my name.

[Tachikoma]

I guess this explains why there have been no updates on the status of TyGrr-Bot. I hope you can resolve the issues with Mt. Gox, an official update in the original topic wouldn't be a bad thing neither.

[check_status]

@Goat : You need to set up a company (a legal entity, so both you and your wife are shareholders, worse case a joint account. This way you could have used a single MTGox account with your wife. Just say sorry to MtGox and ask them to fund back the money into the bot account. And wire into your's wife account. I don't think challenging them right now will do any good for anyone.

I don't know about international laws, but in US husband and wife are two different legal entities. Meaning my wife cannot do anything with an account under my name.

This is off topic as well as wrong.

That's a state, not federal issue.  In most jurisdictions in the US, spouses are considered part of the single entity for LLCs.  

You are wrong. vampire is on topic and is making sensible suggestions in the right direction.

Adding to vampires line of thought; It is usually good business practice and sensible accounting to have a business banking account being operated as Tygrr-Bot, into which Mt. Gox Tygrr-Bot account funds get transferred into. Then from Tygrr-Bot business bank account all employees and share holders can receive payments or transfers.

[Polvos]

Use another exchange. It's known in the forum that MtGox is freezing some clients assets at their will.

[Red Emerald]

Use another exchange. It's known in the forum that MtGox is freezing some clients assets at their will.

Running an arbitrage bot without including the largest exchange would not be optimal.  Besides, it looks to me like Gox was just doing their due diligence.  Better that they froze the account and then deal with it quickly than potentially letting funds be stolen IMHO.

[LordGreynick]

Doesn't sound like Goat is trying to steal his own money. Sounds like Mt Gox are selectively holding onto funds without good reason and then using AML legislation (in which jurisdiction, Japan?) as an excuse to take their client's money.

There's no other way to look at it... Its common practice for wives/spouses to have access to joint accounts / business accounts. Trying to quote AML laws when working across multiple jurisdictions is a legal nightmare at best and instead of looking after their customers, Mt Gox is swallowing the cash up and then blaming AML.

Here in Australia, husbands and wives generally use a family trust when they want to share assets etc

The only recourse I can see is to sue Mt Gox in Japan and do it soon before they close up shop and the directors jump ship with all our money.

[Maged]

Doesn't sound like Goat is trying to steal his own money. Sounds like Mt Gox are selectively holding onto funds without good reason and then using AML legislation (in which jurisdiction, Japan?) as an excuse to take their client's money.

There's no other way to look at it... Its common practice for wives/spouses to have access to joint accounts / business accounts. Trying to quote AML laws when working across multiple jurisdictions is a legal nightmare at best and instead of looking after their customers, Mt Gox is swallowing the cash up and then blaming AML.

Here in Australia, husbands and wives generally use a family trust when they want to share assets etc

The only recourse I can see is to sue Mt Gox in Japan and do it soon before they close up shop and the directors jump ship with all our money.

Without the other side of the story, you're missing out on a lot.

[rjk]

Doesn't sound like Goat is trying to steal his own money. Sounds like Mt Gox are selectively holding onto funds without good reason and then using AML legislation (in which jurisdiction, Japan?) as an excuse to take their client's money.

There's no other way to look at it... Its common practice for wives/spouses to have access to joint accounts / business accounts. Trying to quote AML laws when working across multiple jurisdictions is a legal nightmare at best and instead of looking after their customers, Mt Gox is swallowing the cash up and then blaming AML.

Here in Australia, husbands and wives generally use a family trust when they want to share assets etc

The only recourse I can see is to sue Mt Gox in Japan and do it soon before they close up shop and the directors jump ship with all our money.

You must admit though, since his wife didn't have the same last name, it wasn't known that she was indeed his wife. Additionally, most any financial institution would regard several sudden payouts to several accounts with some suspicion.

[stochastic]

Doesn't sound like Goat is trying to steal his own money. Sounds like Mt Gox are selectively holding onto funds without good reason and then using AML legislation (in which jurisdiction, Japan?) as an excuse to take their client's money.

There's no other way to look at it... Its common practice for wives/spouses to have access to joint accounts / business accounts. Trying to quote AML laws when working across multiple jurisdictions is a legal nightmare at best and instead of looking after their customers, Mt Gox is swallowing the cash up and then blaming AML.

Here in Australia, husbands and wives generally use a family trust when they want to share assets etc

The only recourse I can see is to sue Mt Gox in Japan and do it soon before they close up shop and the directors jump ship with all our money.

How can you assume this is Goat or his wife requesting the money?  What paperwork across jurisdictions can prove that his wife is the person requesting the money?  What paperwork would be OK to show a marriage between Goat and his wife?  This is why banks do not allow anyone other than who is specifically named on an account from withdrawing money.  MtGox's TOS state that an account holder can only transfer money to another account that they have in their own name.

It would be better to get a registered company to take care of the TyGrr-Bot business, then open a business bank account in that name.  The people that are responsible for money can be on the business bank account.  It seems from the information left there that these accounts were personal accounts, which is a big mistake to do when running a business.

[Rothgar]

Doesn't sound like Goat is trying to steal his own money. Sounds like Mt Gox are selectively holding onto funds without good reason and then using AML legislation (in which jurisdiction, Japan?) as an excuse to take their client's money.

There's no other way to look at it... Its common practice for wives/spouses to have access to joint accounts / business accounts. Trying to quote AML laws when working across multiple jurisdictions is a legal nightmare at best and instead of looking after their customers, Mt Gox is swallowing the cash up and then blaming AML.

Here in Australia, husbands and wives generally use a family trust when they want to share assets etc

The only recourse I can see is to sue Mt Gox in Japan and do it soon before they close up shop and the directors jump ship with all our money.

This is ridiculous.  I'm convinced that MtGox is reputable.  They are big enough to be under the scrutiny of governments and be a hacking target.  These facts make these crazy requirements needed.  If the directors were going to jump ship, they would have already.

[Smoovious]

Doesn't sound like Goat is trying to steal his own money. Sounds like Mt Gox are selectively holding onto funds without good reason and then using AML legislation (in which jurisdiction, Japan?) as an excuse to take their client's money.

There's no other way to look at it... Its common practice for wives/spouses to have access to joint accounts / business accounts. Trying to quote AML laws when working across multiple jurisdictions is a legal nightmare at best and instead of looking after their customers, Mt Gox is swallowing the cash up and then blaming AML.

Here in Australia, husbands and wives generally use a family trust when they want to share assets etc

The only recourse I can see is to sue Mt Gox in Japan and do it soon before they close up shop and the directors jump ship with all our money.

You must admit though, since his wife didn't have the same last name, it wasn't known that she was indeed his wife. Additionally, most any financial institution would regard several sudden payouts to several accounts with some suspicion.

As well as, if I read it right, the payouts were to two different non-contiguous continents also. You'd typically expect spouses to have their accounts within the same geographic region, so this would count as another red flag, begging to be verified.

-- Smoov

[check_status]

As well as, if I read it right, the payouts were to two different non-contiguous continents also. You'd typically expect spouses to have their accounts within the same geographic region, so this would count as another red flag, begging to be verified.

-- Smoov

You forget the part where they asked Mt. Gox first before they did anything, Mt. Gox said it's OK, then after they made the transaction decided it was illegal and froze the account. WTF!

[TyGrr-PR]

Here at TyGrr we do not fully understand AML law but are very willing to work with Mt. Gox to help them stay operating legally. This is why we asked them about everything before we did anything and why were were AML verified.

We are happy to send them the requested documents now that they have made clear and specific requests. We understand that some red flags we raised and we are happy to work with Mt. Gox directly to clear them. However the prospect of having to go to Japan to defend in court is not ideal for anyone involved.

Thank you.

[stochastic]

As well as, if I read it right, the payouts were to two different non-contiguous continents also. You'd typically expect spouses to have their accounts within the same geographic region, so this would count as another red flag, begging to be verified.

-- Smoov

You forget the part where they asked Mt. Gox first before they did anything, Mt. Gox said it's OK, then after they made the transaction decided it was illegal and froze the account. WTF!

Where is the documentation of that in the OP?  I did not see that.

[LordGreynick]

Doesn't sound like Goat is trying to steal his own money. Sounds like Mt Gox are selectively holding onto funds without good reason and then using AML legislation (in which jurisdiction, Japan?) as an excuse to take their client's money.

There's no other way to look at it... Its common practice for wives/spouses to have access to joint accounts / business accounts. Trying to quote AML laws when working across multiple jurisdictions is a legal nightmare at best and instead of looking after their customers, Mt Gox is swallowing the cash up and then blaming AML.

Here in Australia, husbands and wives generally use a family trust when they want to share assets etc

The only recourse I can see is to sue Mt Gox in Japan and do it soon before they close up shop and the directors jump ship with all our money.

This is ridiculous.  I'm convinced that MtGox is reputable.  They are big enough to be under the scrutiny of governments and be a hacking target.  These facts make these crazy requirements needed.  If the directors were going to jump ship, they would have already.

Normally I would agree, but look at all the threads with people that have tried to wire funds out of their Mt Gox accounts and still don't have their funds a month later.

There isn't just 1 or 2, there are so far around half a dozen and they're all over the world.

[check_status]

As well as, if I read it right, the payouts were to two different non-contiguous continents also. You'd typically expect spouses to have their accounts within the same geographic region, so this would count as another red flag, begging to be verified.

-- Smoov

You forget the part where they asked Mt. Gox first before they did anything, Mt. Gox said it's OK, then after they made the transaction decided it was illegal and froze the account. WTF!

Where is the documentation of that in the OP?  I did not see that.

I can't explain your inability to comprehend what you read nor can I determine which portions you did not read. Try P3 for a start.

[stochastic]

As well as, if I read it right, the payouts were to two different non-contiguous continents also. You'd typically expect spouses to have their accounts within the same geographic region, so this would count as another red flag, begging to be verified.

-- Smoov

You forget the part where they asked Mt. Gox first before they did anything, Mt. Gox said it's OK, then after they made the transaction decided it was illegal and froze the account. WTF!

Where is the documentation of that in the OP?  I did not see that.

Then you can't read.  Seriously, I'd have to paste the first 20% of the OP.

Actually I was being an ass because all that was said about getting prior approval to have his wife send money to Chaang-Noi's US bank account was:

Magical Tux was made aware. Magical Tux personally gave permission to Chaang-Noi to allow his wife to set up an account and have it AML verified. The AML was not only approved but the limit on the account was raised when requested.

also

After this international wire was sent Chaang-Noi contacted Mt Gox staff (Not Magical Tux) to find out if an AML verified account could send money to their spouse. It was repeatedly made clear by a member of Mt Gox staff that this would not be a problem.

No actual emails or irc chats were posted discussing this, so I don't see this as documentation to prove that a proper request was made.  MagicalTux can't release the communication so it is only one person's version of the facts.

I heard this was being resolved so that is good.  It seems like what is needed for any of the TyGrr businesses is to separate the businesses from each other, get proper business bank accounts, and properly verify identification for the money managers of the businesses.

It amazes me that people will test the most mundane things before going at it for real, but when it comes to big things they don't.  Test all withdraw options before putting a lot of money into anything.

[Bigpiggy01]

Thailand along with several other countries that have active terrorist cells or the equivalent, are on a "watch list" with most reputable financial institutuions so transfers in and out of these locations take more time and documents than what is required for countries not on watch lists.

So watchlist + even the slightest inconsistency =

[Smoovious]

As well as, if I read it right, the payouts were to two different non-contiguous continents also. You'd typically expect spouses to have their accounts within the same geographic region, so this would count as another red flag, begging to be verified.

-- Smoov

You forget the part where they asked Mt. Gox first before they did anything, Mt. Gox said it's OK, then after they made the transaction decided it was illegal and froze the account. WTF!

Well, yes they did... and then when they were actually made, 2 different continents...

When someone tells me something needs to be sent to their wife, I pretty much expect the same address unless told differently, and then, it is still typically in the same general area.

But, if I'm sending something to someone's wife, and that her address ends up on the other side of the freakin' planet? Yeah, that's a serious WTF moment.

I wouldn't tend to ask the husband "is she also in North America?" That would just be stupid.

Sorry, but this situation, as described by the participants, would make me feel uncomfortable too, to the point of freezing everything, and wanting some verification/confirmation of who I'm dealing with.

Cuz... if I allowed it to go through, and it turned out to be a scammer who hacked their accounts? That, is SOOO much worse.

MtGox is handling it properly and professionally. It is Goat who is turning this into the major whiney bitch-fest it has become, which is additionally suspicious.

-- Smoov

[rjk]

MtGox is handling it properly and professionally. It is Goat who is turning this into the major whiney bitch-fest it has become, which is additionally suspicious.

I must add my +1 to this.

[stochastic]

As well as, if I read it right, the payouts were to two different non-contiguous continents also. You'd typically expect spouses to have their accounts within the same geographic region, so this would count as another red flag, begging to be verified.

-- Smoov

You forget the part where they asked Mt. Gox first before they did anything, Mt. Gox said it's OK, then after they made the transaction decided it was illegal and froze the account. WTF!

Where is the documentation of that in the OP?  I did not see that.

I can't explain your inability to comprehend what you read nor can I determine which portions you did not read. Try P3 for a start.

Directly quote in the OP where people from mtgox state that it is ok to wire money from his wife's mtgox account to his bank account in America.  I only see emails stating that his wife account is verified and asking how long it will take for verification to be completed.

While I personally don't like mtgox's verification procedures, but it is a price we have to pay since bitcoins are not accepted everywhere.  From what I read in the OP they seemed to respond professionally.

[TyGrr-PR]

As stated in the OP the approval to send the wire to an account that was not of the AML owner was done by a Mt. Gox support member that was not M Tux. This is not disputed and we have the logs. However to protect the other staff member who it now seems might have given bad advice we will not list his name or his logs unless Mt. Gox would like to claim the events never happened.

@BigPiggy 

The TyGrr operations are happy to work with Mt. Gox to help them stay operating legally and under the very unclear for us AML laws. We are happy to submit to them documents that they have now requested. Threats of law enforcement and frozen funds being sent to court is what we objected to as being unreasonable. Keep in mind the account was AML verified and we have so far this morning uploaded 5 new documents with several more coming shortly.

Thank you.

[Bigpiggy01]

@BigPiggy

The TyGrr operations are happy to work with Mt. Gox to help them stay operating legally and under the very unclear for us AML laws. We are happy to submit to them documents that they have now requested. Threats of law enforcement and frozen funds being sent to court is what we objected to as being unreasonable. Keep in mind the account was AML verified and we have so far this morning uploaded 5 new documents with several more coming shortly.

Glad to see it

I once had to spend three weeks trying to pay a Pakistani pine nut supplier and had a similar issue, so I know this can be a SLOW and PAINFUL process that does no one any good.

[TyGrr-PR]

We uploaded 10 documents as requested and then received this e-mail.

Dear TyGrr-Bot,

We regret to inform you that the identification documentation you have submitted has been reviewed, and your request has been temporarily denied.

Reasons(s)

One individual's identity may only be linked to one account. If you have more than one account and wish to submit AML information for all of your accounts you will need to contact support (support@mtgox.com) to merge your accounts first. Please do not resubmit your AML request until after your accounts have been merged.

We sincerely apologize for any inconvenience this may cause, but it would be greatly appreciated if you resubmit the requested clarification(s) above.

Otherwise, if you would like to make further enquiries in relation to this, please do not hesitate to contact Mt.Gox Support.




We only followed the directions of Mark,



Hi,

If it's about two married people, then it should be easy. We need the following documents:

- Marriage registration certificate (if not in english, please join translation)
- ID of the withdraw recipient
- Proof of address for withdraw recipient

You can scan and upload the documents via https://mtgox.com/forms/verification after logging in.


Thanks,
Mark
MtGox.com Team



However TyGrr is more than happy to follow the directions of Mt. Gox as we trust that they are following all laws and this is something we support. We will ask for information about the merging process and how to accomplish it.

Thank you.

[finway]

So, no full story.

[rjk]

Listen, NO ONE CARES, because it is just a one sided rant. Going public with this without letting MtGox tell their side of the story just shows how you cannot be trusted to run a competent business.

If you have any balls to speak of, you will give authorization to MtGox to reply with their side of the story, including any information that may be normally protected under their privacy policy.

Otherwise, I would recommend that you delete all postings related to this incident and stop digging your own grave.

[check_status]

The facts:
1. Chang-noi was attempting to link 2 identities to one account and contacted Mt. Gox support via IRC for how to proceed
2. Mt. Gox allowed and instructed identity 2 to setup and then assisted to get AML approval
3. Identity 1 or 2 attempted to transfer funds to identity 2's account
4. Then and only then did Mt. Gox react to a potential illegal action

While much can be assumed as to why Mt. Gox allowed the situation to escalate to an account achieving frozen status, it is clear from what the OP posted, Mt. Gox failed to ask proper follow up questions during the initial support incident. Had Mt. Gox asked a few more questions they could have prevented any interruption in service of the customers account. Mt. Gox failed to act responsibly early on and had allowed a situation to escalate until frozen funds were the result. Mt. Gox had a mental pause moment and they should work to restore the account to the previous conditions before the incident and apologize for the failure on their part to clarify the correct legal requirements limiting such account activity.

Both parties are guilty of acting irresponsibly carrying out business transactions in a manner that is uncommon to standard business practices employed by the majority of legitimate businesses acting responsibly.

[likuidxd]

The facts:

3. Identity 1 attempted to transfer funds to identity 2's account
4. Then and only then did Mt. Gox react to a potential illegal action
2. Mt. Gox allowed and instructed identity 2 to setup and then assisted to get AML approval
1. Chang-noi was attempting to link 2 identities to one account and contacted Mt. Gox support via IRC for how to proceed

While much can be assumed as to why Mt. Gox and Tygrr allowed the situation to escalate to an account achieving frozen status, it is clear from what the OP posted, Mt. Gox and Tygrr failed to ask proper follow up questions during the initial support incident. Had Mt. Gox and Tygrr asked a few more questions they could have prevented any interruption in service. Mt. Gox and Tygrr failed to act responsibly early on and had allowed a situation to escalate until frozen funds were the result. Mt. Gox and Tygrr had a mental pause moment and they should work to restore the account to the previous conditions before the incident.

Both parties are guilty of acting irresponsibly carrying out business transactions in a manner that is uncommon to standard business practices employed by the majority of legitimate businesses acting responsibly.

FTFY

Removed your stamp No mockery intended; paraphrasing you

[galambo]

Mr. James, do you now understand why it is a bad idea for your service to issue counterfeit securities?

[check_status]

The facts:

3. Identity 1 attempted to transfer funds to identity 2's account
4. Then and only then did Mt. Gox react to a potential illegal action
2. Mt. Gox allowed and instructed identity 2 to setup and then assisted to get AML approval
1. Chang-noi was attempting to link 2 identities to one account and contacted Mt. Gox support via IRC for how to proceed

While much can be assumed as to why Mt. Gox and Tygrr allowed the situation to escalate to an account achieving frozen status, it is clear from what the OP posted, Mt. Gox and Tygrr failed to ask proper follow up questions during the initial support incident. Had Mt. Gox and Tygrr asked a few more questions they could have prevented any interruption in service. Mt. Gox and Tygrr failed to act responsibly early on and had allowed a situation to escalate until frozen funds were the result. Mt. Gox and Tygrr had a mental pause moment and they should work to restore the account to the previous conditions before the incident.

Both parties are guilty of acting irresponsibly carrying out business transactions in a manner that is uncommon to standard business practices employed by the majority of legitimate businesses acting responsibly.

FTFY

You mock me sir. You have added distortion to my post. I  demand you remove the space below 'The facts:' to maintain my formatting!

[galambo]

Just to recap: "Goat" claims that his high dividend is from arbitrage income, made by constantly shifting bitcoins into and out of various currencies.

Now he claims that he attempted to sell some "significant" number of bitcoins and transfer the proceeds to a bank in Thailand. This transaction was denied by Mt. Gox, the largest bitcoin exchange.

Does this suggest to you "Goat" had ever made any transactions from Bitcoin to any currency, the claimed arbitrage, prior to this moment?

Does this suggest to you that he was attempting to withdraw the entire amount raised by selling counterfeit securities?

Is the transfer of proceeds from the sale of counterfeit securities between international banks considered money laundering?

[MarketNeutral]

Just to recap: "Goat" claims that his high dividend is from arbitrage income, made by constantly shifting bitcoins into and out of various currencies.

Now he claims that he attempted to sell some "significant" number of bitcoins and transfer the proceeds to a bank in Thailand. This transaction was denied by Mt. Gox, the largest bitcoin exchange.

Does this suggest to you "Goat" had ever made any transactions from Bitcoin to any currency, the claimed arbitrage, prior to this moment?

Does this suggest to you that he was attempting to withdraw the entire amount raised by selling counterfeit securities?

Is the transfer of proceeds from the sale of counterfeit securities between international banks considered money laundering?

Seeking investors and suggesting a possible return on investment is one thing, but selling actual shares/securities is something far more regulated and scrutinized. I don't have a dog in this fight either way, but I work in finance and know that selling shares is serious business.

[galambo]

Just to recap: "Goat" claims that his high dividend is from arbitrage income, made by constantly shifting bitcoins into and out of various currencies.

Now he claims that he attempted to sell some "significant" number of bitcoins and transfer the proceeds to a bank in Thailand. This transaction was denied by Mt. Gox, the largest bitcoin exchange.

Does this suggest to you "Goat" had ever made any transactions from Bitcoin to any currency, the claimed arbitrage, prior to this moment?

Does this suggest to you that he was attempting to withdraw the entire amount raised by selling counterfeit securities?

Is the transfer of proceeds from the sale of counterfeit securities between international banks considered money laundering?

Seeking investors and suggesting a possible return on investment is one thing, but selling actual shares/securities is something far more regulated and scrutinized. I don't have a dog in this fight either way, but I work in finance and know that selling shares is serious business.

I recently tried to explain to Mr. James of GLBSE the difference between issuing and providing custodianship for shares, and the services a stock exchange provides. Perhaps you can do a better job.

[MarketNeutral]

Just to recap: "Goat" claims that his high dividend is from arbitrage income, made by constantly shifting bitcoins into and out of various currencies.

Now he claims that he attempted to sell some "significant" number of bitcoins and transfer the proceeds to a bank in Thailand. This transaction was denied by Mt. Gox, the largest bitcoin exchange.

Does this suggest to you "Goat" had ever made any transactions from Bitcoin to any currency, the claimed arbitrage, prior to this moment?

Does this suggest to you that he was attempting to withdraw the entire amount raised by selling counterfeit securities?

Is the transfer of proceeds from the sale of counterfeit securities between international banks considered money laundering?

Seeking investors and suggesting a possible return on investment is one thing, but selling actual shares/securities is something far more regulated and scrutinized. I don't have a dog in this fight either way, but I work in finance and know that selling shares is serious business.

I recently tried to explain to Mr. James of GLBSE the difference between issuing and providing custodianship for shares, and the services a stock exchange provides. Perhaps you can do a better job.

Depends what types of shares you're talking about (preferred, callable, convertible, common, etc), but generally speaking when one buys and sells shares, they're issued via proxy in a street name, such as "Cede & Co." / DTC (google it), which theoretically improves liquidity. A custodian account, such as those held with a custodian bank or a private family fund, may hold shares in the name of the actual title holder. Custodian accounts offer a layer of legal protection against various kinds of risk, and if they're properly established in the name of the trustee, then they provide bona fide ownership rights without exemption (although this is rare). Custodian accounts are designed to unambiguously establish title and ownership as specifically as possible.

Regardless of how shares are held, the exchange is simply a regulated (vs. OTC) market whose "market makers" (google it) provide liquidity --- bid / ask --- under mutually agreed upon terms. For example, the NYSE only holds shares of a stock insofar as a market maker must maintain those shares for liquidity purposes --- not investment purposes. A computer typically performs this function. Think of an exchange as a meeting place where everyone gets together to make deals.

I don't know how this relates to GLBSE, as I don't follow the GLBSE, but now I'm curious and am going to have to check it out!

[galambo]

I don't know how this relates to GLBSE, as I don't follow the GLBSE, but now I'm curious and am going to have to check it out!

Its not as complicated as you are probably thinking.

GLBSE a website where you create a bitcoin denominated securities without providing any information as to who you are.

Additionally, It's not a decentralized service and it is ran by a guy that lives in the UK, and the servers are in the United States.

I recently tried to explain to him that this is a terrible idea.

The person that started this thread is the "founder" of one of these GLBSE companies. Their claim was that they were making arbitrage trades between BTC and unspecified currency. It appears this person is now trying to make like Sam Israel III with the principal.

It wouldn't be funny, but this is probably over a very tiny amount of money.

[galambo]

In defense of Mt.Gox's new policies:

http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-A001.html

[Raoul Duke]

Additionally, It's not a decentralized service and it is ran by a guy that lives in the UK, and the servers are in the United StatesPortugal.

FTFY

[zer0]

Just pay the tiny extra fees to transfer MtGoxUSD to a third party who will send you a wire. Eliminates all the problems of directly dealing with exchanges and their microscope examinations of outgoing funds they legally have to do. #bitcoin-otc is full of such people same with all of Gox's partners, or trade here with somebody reliable.

When you want to buy bitcoins do the same thing, avoid all the deposit holds and rules by buying GoxUSD. All these problems evaporate I've never had any withdrawal issues doing this. Sure it costs an extra $20-60 per $1,000 but who cares if it means no hassles, no holds, no endless ID notaries and DNA testing. 

[MarketNeutral]

I don't know how this relates to GLBSE, as I don't follow the GLBSE, but now I'm curious and am going to have to check it out!

Its not as complicated as you are probably thinking.

GLBSE a website where you create a bitcoin denominated securities without providing any information as to who you are.

Additionally, It's not a decentralized service and it is ran by a guy that lives in the UK, and the servers are in the United States.

I recently tried to explain to him that this is a terrible idea.

The person that started this thread is the "founder" of one of these GLBSE companies. Their claim was that they were making arbitrage trades between BTC and unspecified currency. It appears this person is now trying to make like Sam Israel III with the principal.

It wouldn't be funny, but this is probably over a very tiny amount of money.

That's all there is to it? I'll do my own due diligence, but a big thank you for the information. Very interesting, and clearly, having some securities on an exchange or two doesn't preclude bitcoin from still being in its "wild west" infancy.

Should be interesting to see where the chips fall on so many of these "investments."

I love the enthusiasm and entrepreneurial spirit that accompanies bitcoin users and speculators, but operating something like a legit exchange is no small task. I can't wait to dig into the nuts and bolts of GLBSE.

[MarketNeutral]

What some of you lack understanding of is that MT Gox not only has to abide by the laws of Japan, but also must abide by the laws of the nations of the account holders, the nation where the servers are located, every nation they have connected treaty(ies) with and do business in, and the nations that the data is passed through, else MT Gox would hold legal (civil and criminal) responsibility and liability.

In case you do not understand this, that is how the United States Department of Justice had arrested and extradition of the megaupload principles.

Red tape delays are part of the process.

They have not only the right, but the responsibility to protect themselves, their customers, and their ASSEtS.

Another issue is that laws regarding bitcoin are somewhat still open to interpretation and/or without precedent. Lots of gray area. Who issues and is responsible for bitcoin, a government? No. Is it a supranational currency like the SDR? No. Is it backed by something tangible? No. Etc.

[TyGrr-PR]

Very good news from the Mt. Gox AML department.


"Hello,

We apologise, Mark hadn't fowarded that conversation onto us. In that case, what you have already submitted is fine, your account will be approved immediately. For AML2 status, we need hard-copies of the documentation you have already submitted, notarised and apostilled.

We sincerely apologise for the inconvenience."



We are looking into gaining AML2 status so we do not run into these issues again. We will contact them and ask specificity what documents they would like to have notarized and mailed to them.

We would like to thank Mt. Gox for responding quickly to the issues despite having a week long holiday.

[dirtydiego]

Very good news from the Mt. Gox AML department.


"Hello,

We apologise, Mark hadn't fowarded that conversation onto us. In that case, what you have already submitted is fine, your account will be approved immediately. For AML2 status, we need hard-copies of the documentation you have already submitted, notarised and apostilled.

We sincerely apologise for the inconvenience."



We are looking into gaining AML2 status so we do not run into these issues again. We will contact them and ask specificity what documents they would like to have notarized and mailed to them.

We would like to thank Mt. Gox for responding quickly to the issues despite having a week long holiday.

glad you guys got through to them!!!!!     now team MTGOX how about getting to all the money you owe me?please

[miernik]

Please rest assured that this case is indeed being reported to the police. Until we understand why you have multiple identities in different countries, we cannot take the risk of executing the operations requested.

This is absolutely ridiculous. Reporting their own customer to the police, just because a customer attempted to make a transfer to a believed third-party?

I am thinking of removing my MtGox account, because honestly Mark - this is just unacceptable behavior.

Even if your own invented internal company policy decided that you do not process transfers to third-party - it is completely enough to inform the customer that we do not process such transfers, and that's it. Calling the police? I am speechless. I thought you are someone who could be trusted, and not someone who reports to police for any slightest mistake. Banks make such mistakes routinely, for example transfers from joint accounts having the data of only one account owner in the transfer info, or old address after change of address, or even the banks address instead of customers address - I've all seen this. People change address, change names, have joint accounts, all these things happen routinely, and nobody calls the police the moment one sees some inconsistency. At worst the transfer gets reversed, and that's it. If you are calling the police for such things, that's my end of relationship with MtGox, sorry.

Anyway, a reporting a non-existent crime to the police is a crime in itself. Not only its wasting police time, but also wrongly accusing an innocent person.

Besides that what is the big deal with transfers to a third party? There are several currency-exchange websites, which all have to comply with AML regulations too, and many of them have no problem with transferring to third-party accounts.

See:

http://currencyfair.com/
http://currencyfair.com/perfectfor

http://transferwise.com/

for example. They both explicitly allow transfers of the exchanged amount to an account of a third-party.

And BTW both of them, as well as ANY other of many online financial websites handling money, like Moneybookers.com Neteller.com or even Paypal, a passport and a bank statement (or two) is sufficient ID.

I never seen any other financial service which refuses bank statements (thus excluding the half of the population which doesn't pay house bills) as AML verification. And I've signed up to a countless amount of financial services. All of them have to be compliant with AML laws, and yet none of them where as ridiculous as MtGox, and have such a customer-is-a-criminal-by-default-prove-you-are-not attitude.

[Raoul Duke]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

[stochastic]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

Hopefully the Bitcoinica/Intersango thing will eventually turn into a new full-fledge spot exchange.

[Raoul Duke]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

Hopefully the Bitcoinica/Intersango thing will eventually turn into a new full-fledge spot exchange.

Don't hold your hopes for Intersango... Haven't you seen the thread where they locked the bitcoins of a dude who told them he wanted to withdraw the BTC to a silk road address?
Yeah, that was stupid of him

[doldgigger]

What some of you lack understanding of is that MT Gox not only has to abide by the laws of Japan, but also must abide by the laws of the nations of the account holders, the nation where the servers are located, every nation they have connected treaty(ies) with and do business in, and the nations that the data is passed through, else MT Gox would hold legal (civil and criminal) responsibility and liability.

This is not very accurate. While it is true that international business involves laws of multiple countries, they will by far not all be applicable.

A smart exchange service operator will carefully choose appropriate jurisdictions in order to provide reliable service to the customers.

In case you do not understand this, that is how the United States Department of Justice had arrested and extradition of the megaupload principles.

Red tape delays are part of the process.

They have not only the right, but the responsibility to protect themselves, their customers, and their ASSEtS.

As different testimonials on this forum show, they have no interest in protecting their customers. Even if they really chose some bad jurisdictions for running a business like this, they could have placed prominent warnings for their customers in order to avoid bad surprises like this one. I understand they make good money from not doing so (every frozen account means more money for them to invest), so it is not surprising (although also not very legitimate-looking) that they chose this route.

The bottom line is that you cannot expect a regular customer to understand the legal implications of running a bitcoin exchange. On the other hand, the exchange operator has to. But a good exchange operator will also do his best to keep his customers informed so they don't run into traps. A bad exchange operator will happily wait for customers to run into situations where there is some excuse for freezing funds.

[doldgigger]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

1. Make agreements with as many agencies capable of threatening a person's livelihood.
2. Report any vague evidence you have about your customers to these agencies.
3. Hope for many customers to lose their freedom so they can't access their accounts anymore.
4. Reinvest their money.
5. Profit!

One may or may not like this way of doing business, but at least they could go without transaction fees by now, considering all the people with frozen funds, extremely long money transfer times and proactive engagement in new ventures targeted at creating hassle for more customers.

[doldgigger]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

It may also be illegal under many countries' laws not to tell a customer that you transmit information about them to a foreign country.

[dirtydiego]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

Hopefully the Bitcoinica/Intersango thing will eventually turn into a new full-fledge spot exchange.

He is just saving his ass from legal us problems, I don't see what's wrong with mark doing that? I do see it wrong for it taking as long as it is to get my withdraw funds available to me when I'm already a verified member soon headed to trusted member if they resolve my issues. Please address this issue on my wire transfer and withdraws pending, thank you. I know you guys had a long vacation with golden week, welcome back but please get to work. Thank you!
dirtydiego
mtgox verified member

[Raoul Duke]

At least Paypal returns frozen funds back after 180 days...

[dirtydiego]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

Hopefully the Bitcoinica/Intersango thing will eventually turn into a new full-fledge spot exchange.

Don't hold your hopes for Intersango... Haven't you seen the thread where they locked the bitcoins of a dude who told them he wanted to withdraw the BTC to a silk road address?
Yeah, that was stupid of him

you're joking right lol and the award to the worlds dumbest criminal goes too....

[dirtydiego]

At least Paypal returns frozen funds back after 180 days...

is mtgox really not returning funds? what happens to that money? although in mtgox defense it doesn't take much to be honest and submit your verification and for go these problems which I'm hoping will happen for me this week although I'm already verified.....

[Raoul Duke]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

Hopefully the Bitcoinica/Intersango thing will eventually turn into a new full-fledge spot exchange.

Don't hold your hopes for Intersango... Haven't you seen the thread where they locked the bitcoins of a dude who told them he wanted to withdraw the BTC to a silk road address?
Yeah, that was stupid of him

you're joking right lol and the award to the worlds dumbest criminal goes too....

No, I'm not joking. That shit really happened lol award well deserved

[Nefario]

Heh, I like that, the LOL award.

[stochastic]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

Hopefully the Bitcoinica/Intersango thing will eventually turn into a new full-fledge spot exchange.

Don't hold your hopes for Intersango... Haven't you seen the thread where they locked the bitcoins of a dude who told them he wanted to withdraw the BTC to a silk road address?
Yeah, that was stupid of him

you're joking right lol and the award to the worlds dumbest criminal goes too....

Well the only real hope is to get a network of hand to hand exchanges....

[doldgigger]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

Hopefully the Bitcoinica/Intersango thing will eventually turn into a new full-fledge spot exchange.

He is just saving his ass from legal us problems, I don't see what's wrong with mark doing that?

Complying with legal obligations is one thing. Actively searching for opportunities to hand over more confidential customer data to various agencies around the globe is another. I am not aware of any law which would make it necessary for MtGox to hand over data to the DEA by itself. And, if you see how many of their customers MtGox pissed on by now (just look around on the forums...), I'm sure they would immediately post it in order to repair some of their reputation if there was any.

On the other hand, MtGox' new business model of tracing back user identities for accounts which are suspected to use certain marketplaces raises some privacy concerns. If there was an actual crime investigation involved upon which data is requested, MtGox can send this information to the customers whose privacy was violated, and these customers can seek the help of a lawyer to defend themselves. On the other hand, if MtGox loosens their privacy terms in order to play police themselves and just sends data about users using certain marketplaces out (without any crime involved), we experience a shift from constitutional democracies to a more totalitarian model.

[doldgigger]

At least Paypal returns frozen funds back after 180 days...

is mtgox really not returning funds? what happens to that money? although in mtgox defense it doesn't take much to be honest and submit your verification and for go these problems which I'm hoping will happen for me this week although I'm already verified.....

I think MtGox would be well advised to advertise a maximum freeze time (and to honour it) in order to improve their reputation. This way, using that exchange is still a bit lottery-like, but at least the damage done is somehow limited.

[miernik]

Complying with legal obligations is one thing. Actively searching for opportunities to hand over more confidential customer data to various agencies around the globe is another. I am not aware of any law which would make it necessary for MtGox to hand over data to the DEA by itself. And, if you see how many of their customers MtGox pissed on by now (just look around on the forums...), I'm sure they would immediately post it in order to repair some of their reputation if there was any.

On the other hand, MtGox' new business model of tracing back user identities for accounts which are suspected to use certain marketplaces raises some privacy concerns. If there was an actual crime investigation involved upon which data is requested, MtGox can send this information to the customers whose privacy was violated, and these customers can seek the help of a lawyer to defend themselves. On the other hand, if MtGox loosens their privacy terms in order to play police themselves and just sends data about users using certain marketplaces out (without any crime involved), we experience a shift from constitutional democracies to a more totalitarian model.

+1000

And trying to comply with every law out there in the world will NEVER work, as trying to comply with some absurd law of a remote country on the other side of the globe, you can actually violate the law of the country in which you sit in  - e.g. the remote country wants freezing accounts and releasing information, on the contrary local law forbids freezing accounts without LOCAL court order and has strict privacy laws. Just a potential example.

I believe it would be the best if MtGox stopped trying to comply with laws worldwide, just stick to a single jurisdiction - where they actually sit their asses and can be arrested. Comply ONLY with Japanese law, Japanese AML and Japanese court orders. And ignore everything else. Close all foreign bank accounts, and keep only account in Japan. Rely on other people/companies selling MtGox codes worldwide.

Then the customer could actually know what to expect, could be quoted specific laws on which specific actions are taken.

Single jurisdiction exchange is the only way to operate sanely. Otherwise there will ALWAYS be some law somewhere in the world on which some exchange freezing/data-release/etc action could be based, and there is always some law you would break, no matter what you do. Stick to Japan, forget US and other bullshit. For US its best not to ever visit it also, because they've crazy laws and crazy law enforcement, and trying to play world policeman.

Think Neteller: http://www.theregister.co.uk/2007/01/17/neteller_founders_arrested/
http://www.justice.gov/usao/nys/pressreleases/January07/netellerarrestspr.pdf

No non-US Bitcoin exchange executive worldwide should ever visit US nor hold US bank accounts. That's the only feasible way to operate.

[doldgigger]

Didn't you knew that Mark offered himself and his company to be DEA snitches?
Or is it bitches instead of snitches? I always get confused...

http://uk.reuters.com/article/2011/06/15/financial-bitcoin-idUKN1510930920110615

All financial institutes are snitches whether in the US or not as if they don't comply with US financial disclosures then they will be cut out of the US financial industry.  It may also be illegal under US law to tell a customer they are calling the police or submitting a SAR.

Hopefully the Bitcoinica/Intersango thing will eventually turn into a new full-fledge spot exchange.

Don't hold your hopes for Intersango... Haven't you seen the thread where they locked the bitcoins of a dude who told them he wanted to withdraw the BTC to a silk road address?
Yeah, that was stupid of him

you're joking right lol and the award to the worlds dumbest criminal goes too....

Well the only real hope is to get a network of hand to hand exchanges....

Do you mean hard cash for bitcoins? If so: this would really be nice to have, and if these things start opening up in all places, we will have a secure world-wide cash-transfer system...

On the other hand, there are considerable resources involved in properly operating such an exchange. You'll need quite some physical security in order to cope with possible robbing attempts operating such an exchange would attract. If it weren't so sad, I would laugh my now (the largest BTC exchange accuses us as being criminals one by one, pushing us into becoming victims of real criminals...)

However, I think the whole bitcoin thing became big because of internet possibilities, and it can still use them to grow further. We just need to avoid creating single points of failure, like MtGox strives to be one. What we need is a common API for exchanges, and ideally a free software to operate one. This way, exchanges can be easily interchanged, and after some time more reliable ones will emerge because through the fiercer competition, no one can afford to pull MtGox-like stunts without quickly losing customers. Another thing that would allow to expand on this approach would be some mechanism by which customers and exchanges can prove that certain transactions have happened. This way, we could put up a secure rating system for exchanges by which new users can constantly follow which exchanges have the highest chance of correctly processing transactions.

Finally, I'd like to write some words to all currently operating and future exchange operators.

We cannot neglect that there are some problems involved with different countries' laws. Some may have chosen a bad jurisdiction to operate the exchange on. But if the exchange runs well and it's just some local law that is creating the risk for you to have to piss on your customers, please consider to move the exchange to another country. If you don't have the opportunities or the balls to operate it yourself in another country, I'm sure someone would pay a good price for a well-running exchange.

Another thing is the US financial crime regulation which is striving to have effects on other countries. One might argue that these effects may still be limited by local laws (after all, it's your local politicians protecting your local people's privacy rights who have to fight this out with the US). But in many cases, it may be better to have two separate legal entities, one with US financial business connections and a pure non-US entity. These should still work together rather seamlessly in order to provide a nice user experience, but this approach limits the data where US authorities may even think about requesting access...