World's First Bitcoin Lawsuit - Cartmell v. Bitcoinica

[proudhon]

I knew my odds of getting any of the 150+ bitcoins I had in bitcoinica (just sitting there, not in any position) were always low and ever decreasing, but I'm assuming this lawsuit means that the chances of me getting any of that back have dropped to essentially zero.  That was a lot easier to shrug off when they were trading for $4.something a pop.

[ninjarobot]

This is what the plaintiffs are asking for:

1) for the return of all monies in the accounts of Plaintiffs;
2) for all other general, special, incidental and consequential damages;
3) for attorney's fees, as alleged int the causes of action above;
4) for exemplary and punitive damages, as alleged int the causes of action above;
5) for prejudgment and post-judgement interest to the full extend permitted by law;
6) for costs of suit incurred by Plaintiffs herein; and
7) for such other and further relief as the Court may deem just and proper

So basically 100% reimbursement + reimbursement of all legal costs + interest + damages + other relief

Since the plaintiffs represent only 4 out of the approx. 5000 Customers. How will this affect the other claimants if they are successful?

We can't win other customers' deposits.  It's our expectation that a receiver will take over and distribute the claims and we'll get our cut of that, and anything we're short will have to come from the people found responsible.

So this lawsuit should not affect the pro-rata reimbursement of depositors? I certainly hope so, as I am really starting to feel like a financial rape victim here.

[proudhon]

This is what the plaintiffs are asking for:

1) for the return of all monies in the accounts of Plaintiffs;
2) for all other general, special, incidental and consequential damages;
3) for attorney's fees, as alleged int the causes of action above;
4) for exemplary and punitive damages, as alleged int the causes of action above;
5) for prejudgment and post-judgement interest to the full extend permitted by law;
6) for costs of suit incurred by Plaintiffs herein; and
7) for such other and further relief as the Court may deem just and proper

So basically 100% reimbursement + reimbursement of all legal costs + interest + damages + other relief

Since the plaintiffs represent only 4 out of the approx. 5000 Customers. How will this affect the other claimants if they are successful?

Basically, if you're not one of these 4, and you haven't already gotten something back, then you're not going to get anything back, ever.  The good news is that this is closure for everyone else waiting around for their bitcoins/USD.

[ElectricMucus]

The OP topic makes this sound like an achievement this one is better.

[vampire]

July 7th - Amir released the Bitcoinica source code
July 11th - Amir announces Mt.Gox account theft.

Amir announced on 13th, and theft was on 12th?

BTW any proof that it was Amir who released the source code. (Aside from the GIT logs in the .tar?)

[nibor]

$460k law suit! Even if that is split evenly 4 ways and you pro-rata to BTC/USD of 5 that is still at least $52k each.

Who would be so stupid to have had that much cash stored in the trust of a company/people they did not know?

This shows an amazing level of lack of due diligence that seems to be normal in the bitcoin world!

edit - added details to keep someone happy who complained for some reason.

[Littleshop]

This is what the plaintiffs are asking for:

1) for the return of all monies in the accounts of Plaintiffs;
2) for all other general, special, incidental and consequential damages;
3) for attorney's fees, as alleged int the causes of action above;
4) for exemplary and punitive damages, as alleged int the causes of action above;
5) for prejudgment and post-judgement interest to the full extend permitted by law;
6) for costs of suit incurred by Plaintiffs herein; and
7) for such other and further relief as the Court may deem just and proper

So basically 100% reimbursement + reimbursement of all legal costs + interest + damages + other relief

Since the plaintiffs represent only 4 out of the approx. 5000 Customers. How will this affect the other claimants if they are successful?

Basically, if you're not one of these 4, and you haven't already gotten something back, then you're not going to get anything back, ever.  The good news is that this is closure for everyone else waiting around for their bitcoins/USD.

I disagree.  This lawsuit might suck up all of the US assets but if people in other countries file as well they might see something. 

[repentance]

I disagree.  This lawsuit might suck up all of the US assets but if people in other countries file as well they might see something. 

It depends who they file against.  It's likely that a cascade of insolvencies is going to happen in the not too distant future.  Even if those involved have personal assets, not all jurisdictions recognise the claims of overseas creditors in the case of personal insolvency.  The issue of disputed debt also complicates some potential remedies (especially low cost ones).

[ninjarobot]

From the Summons:

NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information below.

You have 30 CALENDAR DAYS after the summons and legal papers are served on you to file a written response at this court and have a copy served on the plaintiff. A letter or phone call will not protect you.

 Is there a chance the Intersango guys might not respond within 30 days? If so, what would happen in this case?

[repentance]

From the Summons:

NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information below.

You have 30 CALENDAR DAYS after the summons and legal papers are served on you to file a written response at this court and have a copy served on the plaintiff. A letter or phone call will not protect you.

 Is there a chance the Intersango guys might not respond within 30 days? If so, what would happen in this case?

The plaintiffs would likely seek default judgement.

It depends on whether the defendants take other action, though.  From what I've read, it's absurdly easy for foreign entities to seek bankruptcy protection in the US and such protection goes way beyond what is common in many other nations.

[tgmarks]

From the Summons:

NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information below.

You have 30 CALENDAR DAYS after the summons and legal papers are served on you to file a written response at this court and have a copy served on the plaintiff. A letter or phone call will not protect you.

 Is there a chance the Intersango guys might not respond within 30 days? If so, what would happen in this case?

I can't image that they would do nothing.  Like he said, bankruptcy can go a long way, but that is just one of several possible reactions that could occur.

[Philj]

From the Summons:

NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information below.

You have 30 CALENDAR DAYS after the summons and legal papers are served on you to file a written response at this court and have a copy served on the plaintiff. A letter or phone call will not protect you.

 Is there a chance the Intersango guys might not respond within 30 days? If so, what would happen in this case?

Clearly that notice isn't showing them any fucking respect, so its doubtful they will respond.

[teflone]

From the Summons:

NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information below.

You have 30 CALENDAR DAYS after the summons and legal papers are served on you to file a written response at this court and have a copy served on the plaintiff. A letter or phone call will not protect you.

 Is there a chance the Intersango guys might not respond within 30 days? If so, what would happen in this case?

Clearly that notice isn't showing them any fucking respect, so its doubtful they will respond.

lmfao!

[MPOE-PR]

We'd hoped that our offer would both push Bitcoinica to resolve the claims faster, and give them more room for error.  If they resolved all the claims within 6 months and paid us an equal pro rata share, they'd have immunity from us.  Coincidentally, the amount of funds stolen only 2 days after this offer was made was nearly 100% of what we were owed at the time.

This would seem to be veering towards criminal. A DA might even prosecute ex officio.

[P_Shep]

Made the BBC:

http://www.bbc.com/news/technology-19244210

[dopamine]

Just read it and they got at least 50% of there claim, I'm still sitting on a fat 0 on my claim.

[repentance]

Made the BBC:

http://www.bbc.com/news/technology-19244210

It's a pity they picked it up from Arstechnica, which ran a story based on an Verge article which had substantial inaccuracies.

[Vod]

I hope the lawsuit will eventually lead to criminal charges against the officers of the corporation.  They did not file a police report, even after the hacker was identified.

[makomk]

I hope the lawsuit will eventually lead to criminal charges against the officers of the corporation.  They did not file a police report, even after the hacker was identified.

Zhou Tong isn't even named as a defendant in the lawsuit despite being the only person who claims to know the hacker's identity, and despite claiming to have promised the hacker that Bitcoinica LP would not start a police investigation into him. Also, who are the actual officers of the corporation in the first place? Zhou's certainly acting a lot like one, but...

[Vod]

I hope the lawsuit will eventually lead to criminal charges against the officers of the corporation.  They did not file a police report, even after the hacker was identified.

Zhou Tong isn't even named as a defendant in the lawsuit despite being the only person who claims to know the hacker's identity, and despite claiming to have promised the hacker that Bitcoinica LP would not start a police investigation into him. Also, who are the actual officers of the corporation in the first place? Zhou's certainly acting a lot like one, but...

I believe the officers of the corporation feel they are untouchable because the corporation is a separate legal entity.  In Canada at least (a commonwealth country), a director of a corporation is REQUIRED to do whatever is necessary to protect the assets of said corporation.  So while they cannot be held financially responsible for Bitcoinica's debts, they can be held criminally (and hence civilly) liable for failing to do anything about the crime that was committed against their public business.  Basically, they did nothing while the money was taken.  I'm sure they paid themselves handsomely, however, out of what was left.

All they had to do was pick up the phone and call the police.  The fact they did not do this leads me to believe they profited from the hack.