6 ms·

Bitcoins lost in Mt. Gox debacle ‘not subject to ownership’

49 points by fortytw2 11y ago

keithpeter 11y ago
"The judge said it is evident bitcoins do not possess the properties of tangible entities and acknowledged that they also do not offer exclusive control because transactions between users are structured in such a way that calls for the involvement of a third party." I found this an interesting view of property but I suspect it may need a shift in definition over the next few decades.
- juliangregorian 11y ago
  I mean really, any student could tell you that property rights require enforcement.
- realusername 11y ago
  If I want to nitpick, music and video files are in the same category, they are not "tangible entities" either but they are protected by law.
  - tajen 11y ago
    I'll follow you;) In the law, copyrighted materials are defined as the product of the human mind, including imagination. If the blockchain contained a few characters typed by a human, then each bitcoins could be copyrighted. That would be funny.
- graeham 11y ago
  I did as well. How do financial instruments (bonds, mutual funds, sporting bets) compare? Surely these would have protection from theft, even electronic versions. But calling Bitcoin a 'Financial Instrument' might open additional problems (regulation?)
  - Cthulhu_ 11y ago
    The way I see it, you can't have a decentralised, unregulated currency as well as protection from theft from a government / legal system - the two are mutually exclusive. If you want your money to have some protection, use a regular currency with a regular bank - even if that bank goes out of business and its owners go to trial for embezzlement, you'll still get at least part of your money back.
    - taejo 11y ago
      If you have a chair in your front yard, and I walk off with it, that's theft. You wouldn't say "chairs are decentralised and unregulated, you can't expect protection from the government". If I burn it, you wouldn't say "I should have bought regular, fireproof furniture." I can't give it back to you, but I should still compensate you.
  - s73v3r 11y ago
    You can't really point to a particular Bitcoin and say, "That's my Bitcoin."
- patio11 11y ago
  You're welcome to take it up with the Japanese Diet, but in 2015, 有形固定資産 ("tangible real property") is a thing which you can demand a bankrupt entity surrender to you if you can demonstrate ownership of it. The court held, sensibly, that BTC is not tangible real property. See earlier layman's explanation here for more detail, if you're curious: https://news.ycombinator.com/item?id=10018631 https://news.ycombinator.com/item?id=10018631 You will probably not find wonderful reporting on this subject because the generalist press routinely does not understand complicated specialist subjects (as is readily apparent to technically inclined people any time they stumble their way through our world). "有形固定資産 and 資産権 actually describe two different things" is a bit beyond most reporters trying to work their way through this story, including for the obvious reason.
  - fortytw2 11y ago
    What does 資産権 translate as? Google says "asset rights" but that doesn't quite sound right/make a lot of sense in this context
    - patio11 11y ago
      Property rights (財産権) in an asset. I could have written 財産権 there, too, and it may have been a better call for what I was going for.
  - rasz_pl 11y ago
    Isnt Japan one of the countries where you can go to prison for 'stealing' ingame items? Something is not right here.
    - patio11 11y ago
      Japan has extensive protection of non-tangible property rights! In addition to Arcanite Reapers and Bitcoin we have, you know, things that actually matter, too, like copyrights and and fishing rights and mineral rights and all the sorts of things you would expect a highly developed first world nation to recognize! Newspapers suggesting that a distinction between tangible and intangible assets means intangible assets cannot be owned should run this conclusion by their local attorney!
- deleted 11y ago
  [deleted]
- madaxe_again 11y ago
  It's an absurd view of property in this day and age. I mean, can I not pay for electricity in Japan because I can't handle it, and it can be shared? Can I steal a few ¥bn worth of electronic bonds, credit swaps, options, futures from a Japanese company then stick them the finger because they didn't really own them as they're all intangible? Can I not pay for my cell phone service because I can't handle the RF waves? Can I republish books by Japanese authors abroad and trample copyright, because the words aren't tangible? I assume media piracy is legal too? No? Shock horror. I don't know about the tort system in Japan, but if it's anything like most legal systems, this judgment reinforces the law and re-asserts that if you can't physically touch it, you're welcome to steal it. Oh right, this is actually just the Japanese legal system doing what they do best, and going "corporate entity must be right, be deferential, be deferential!".
  - s73v3r 11y ago
    You can't point to a specific Bitcoin and say, "That's my Bitcoin.". You can say that you are owed X amount of BTC, but you cannot say that you are owed a specific coin. Thus, it's like cash.
MikeNomad 11y ago
I am confused: If BC is not subject to ownership claims, how can anyone be harmed by the bankruptcy, etc? No one has "lost" anything through mismanagement, blah blah.
- makomk 11y ago
  If I'm understanding correctly, the court found that he couldn't claim ownership of a particular, tangible set of bitcoins out of Mt Gox's holdings, but he's still a creditor of Mt Gox because they did owe him a specific number bitcoins.
  - pbhjpbhj 11y ago
    >they did owe him a specific number bitcoins // That doesn't make any sense though unless bitcoins can be owned. If you could claim as a creditor for something that was of worth but couldn't be owned then one could say something like "I told Mt.Gox employees a joke, therefore I claim financial remuneration for the value of that experience I gave them.".
    - andrewla 11y ago
      As I understand it, the distinction is not whether or not you can own bitcoins. The distinction is whether or not you can own _particular_ bitcoins. If, say, a "sell it on ebay" store went bankrupt, I could say, "those are my Air Jordans", and I would get those particular shoes back. On the other hand, if a bank goes bankrupt, I can't say "I deposited those particular bills with those serial numbers". The court has ruled that bitcoins follow the latter principle, so if each depositor gets back 50% of the deposited bitcoins, I can't get back 100% by pointing to the particular bitcoins I deposited.
      - saalweachter 11y ago
        How about the analogy of robbing a bank vault versus robbing safe deposit boxes? If half the money is stolen from the bank vault, everyone at the bank has lost half their money (ignoring insurance, etc). If the contents of half the safe deposit boxes are stolen, you don't distribute the remaining safe deposit boxes among all the customers; half lost everything and half lost nothing.
725686 11y ago
Proponentes of cryptocurrencies highlight the fact that it is not controlled/manipulated by governments and banks, but when something goes wrong they go running to daddy government for help.
- icebraining 11y ago
  So, it's inconsistent to think that the State should only perform some tasks? Are only complete statism and complete anarchism the valid positions?
  - deleted 11y ago
    [deleted]
rwallace 11y ago
Either I'm misunderstanding this or other people are, because I'm seeing other people interpret this as saying Japanese law doesn't allow ownership of intangible things, which of course it does. My take on it is that this is specifically about a provision of bankruptcy law. Suppose you lend (not give or sell) your car to a company that then goes bankrupt with the vehicle in its possession, and you go along to reclaim it. The officials handling the case might say "Okay, let's check the blue book value of the car and you'll get your pro rata percentage of that money when everything is settled." To which you can reply "No, you don't understand. I'm not saying the company owes me money. I'm saying that's my car, license number such and such, it doesn't belong to the company at all, so it's not part of the bankruptcy proceedings, it belongs to me and I want it back right now." And assuming you have the documentation to prove it, the law will support your case. In this case the court has ruled that you can't point to a particular bitcoin and say that's my bitcoin, because bitcoin has the properties of money rather than of particular tangible objects, so all you can say is you are owed a certain amount of bitcoins. And so the owner of such will get his pro rata percentage after everything is settled, instead of getting the whole lot right now. Am I understanding it correctly?
- ska 11y ago
  As far as I can see, yes, you are understanding it correctly. This discussion seems full of misinterpreting a term of art as something closer to colloquial meaning, and then drawing inferences from that. Such inferences by nature will usually be deeply flawed.
- SCAQTony 11y ago
  Your second to last paragraph; that is an interesting concept! Imagine if the court orders this beast to pay back the victims in Bitcoins with the exact amount of bitcoins they had lost rather than the dollar value. Since he will be paying them back in Bitcoins that have lost 75% or more of their value when he exits jail, he may still own 6-figures in "cash" worth of Bitcoins.
  - ams6110 11y ago
    I don't think a bankruptcy court would accept settlement in bitcoins; since bankruptcy settlements are based on a share of the remaining asset value in the bankrupt entity.
javert 11y ago
This story is a victim of poor reporting and translation. There is a reddit comment that clears it up and is extremely fascinating in its own right: https://www.reddit.com/r/Bitcoin/comments/3fztzt/tokyo_court_bitcoin_not_subject_to_ownership/cttk8f8 https://www.reddit.com/r/Bitcoin/comments/3fztzt/tokyo_court...

49 points by fortytw2 11y ago

"The judge said it is evident bitcoins do not possess the properties of tangible entities and acknowledged that they also do not offer exclusive control because transactions between users are structured in such a way that calls for the involvement of a third party." I found this an interesting view of property but I suspect it may need a shift in definition over the next few decades.

juliangregorian 11y ago
I mean really, any student could tell you that property rights require enforcement.
realusername 11y ago
If I want to nitpick, music and video files are in the same category, they are not "tangible entities" either but they are protected by law.
- tajen 11y ago
  I'll follow you;) In the law, copyrighted materials are defined as the product of the human mind, including imagination. If the blockchain contained a few characters typed by a human, then each bitcoins could be copyrighted. That would be funny.
graeham 11y ago
I did as well. How do financial instruments (bonds, mutual funds, sporting bets) compare? Surely these would have protection from theft, even electronic versions. But calling Bitcoin a 'Financial Instrument' might open additional problems (regulation?)
- Cthulhu_ 11y ago
  The way I see it, you can't have a decentralised, unregulated currency as well as protection from theft from a government / legal system - the two are mutually exclusive. If you want your money to have some protection, use a regular currency with a regular bank - even if that bank goes out of business and its owners go to trial for embezzlement, you'll still get at least part of your money back.
  - taejo 11y ago
    If you have a chair in your front yard, and I walk off with it, that's theft. You wouldn't say "chairs are decentralised and unregulated, you can't expect protection from the government". If I burn it, you wouldn't say "I should have bought regular, fireproof furniture." I can't give it back to you, but I should still compensate you.
- s73v3r 11y ago
  You can't really point to a particular Bitcoin and say, "That's my Bitcoin."
patio11 11y ago
You're welcome to take it up with the Japanese Diet, but in 2015, 有形固定資産 ("tangible real property") is a thing which you can demand a bankrupt entity surrender to you if you can demonstrate ownership of it. The court held, sensibly, that BTC is not tangible real property. See earlier layman's explanation here for more detail, if you're curious: https://news.ycombinator.com/item?id=10018631 https://news.ycombinator.com/item?id=10018631 You will probably not find wonderful reporting on this subject because the generalist press routinely does not understand complicated specialist subjects (as is readily apparent to technically inclined people any time they stumble their way through our world). "有形固定資産 and 資産権 actually describe two different things" is a bit beyond most reporters trying to work their way through this story, including for the obvious reason.
- fortytw2 11y ago
  What does 資産権 translate as? Google says "asset rights" but that doesn't quite sound right/make a lot of sense in this context
  - patio11 11y ago
    Property rights (財産権) in an asset. I could have written 財産権 there, too, and it may have been a better call for what I was going for.
- rasz_pl 11y ago
  Isnt Japan one of the countries where you can go to prison for 'stealing' ingame items? Something is not right here.
  - patio11 11y ago
    Japan has extensive protection of non-tangible property rights! In addition to Arcanite Reapers and Bitcoin we have, you know, things that actually matter, too, like copyrights and and fishing rights and mineral rights and all the sorts of things you would expect a highly developed first world nation to recognize! Newspapers suggesting that a distinction between tangible and intangible assets means intangible assets cannot be owned should run this conclusion by their local attorney!
deleted 11y ago
[deleted]
madaxe_again 11y ago
It's an absurd view of property in this day and age. I mean, can I not pay for electricity in Japan because I can't handle it, and it can be shared? Can I steal a few ¥bn worth of electronic bonds, credit swaps, options, futures from a Japanese company then stick them the finger because they didn't really own them as they're all intangible? Can I not pay for my cell phone service because I can't handle the RF waves? Can I republish books by Japanese authors abroad and trample copyright, because the words aren't tangible? I assume media piracy is legal too? No? Shock horror. I don't know about the tort system in Japan, but if it's anything like most legal systems, this judgment reinforces the law and re-asserts that if you can't physically touch it, you're welcome to steal it. Oh right, this is actually just the Japanese legal system doing what they do best, and going "corporate entity must be right, be deferential, be deferential!".
- s73v3r 11y ago
  You can't point to a specific Bitcoin and say, "That's my Bitcoin.". You can say that you are owed X amount of BTC, but you cannot say that you are owed a specific coin. Thus, it's like cash.

MikeNomad 11y ago

I am confused: If BC is not subject to ownership claims, how can anyone be harmed by the bankruptcy, etc? No one has "lost" anything through mismanagement, blah blah.

makomk 11y ago
If I'm understanding correctly, the court found that he couldn't claim ownership of a particular, tangible set of bitcoins out of Mt Gox's holdings, but he's still a creditor of Mt Gox because they did owe him a specific number bitcoins.
- pbhjpbhj 11y ago
  >they did owe him a specific number bitcoins // That doesn't make any sense though unless bitcoins can be owned. If you could claim as a creditor for something that was of worth but couldn't be owned then one could say something like "I told Mt.Gox employees a joke, therefore I claim financial remuneration for the value of that experience I gave them.".
  - andrewla 11y ago
    As I understand it, the distinction is not whether or not you can own bitcoins. The distinction is whether or not you can own _particular_ bitcoins. If, say, a "sell it on ebay" store went bankrupt, I could say, "those are my Air Jordans", and I would get those particular shoes back. On the other hand, if a bank goes bankrupt, I can't say "I deposited those particular bills with those serial numbers". The court has ruled that bitcoins follow the latter principle, so if each depositor gets back 50% of the deposited bitcoins, I can't get back 100% by pointing to the particular bitcoins I deposited.
    - saalweachter 11y ago
      How about the analogy of robbing a bank vault versus robbing safe deposit boxes? If half the money is stolen from the bank vault, everyone at the bank has lost half their money (ignoring insurance, etc). If the contents of half the safe deposit boxes are stolen, you don't distribute the remaining safe deposit boxes among all the customers; half lost everything and half lost nothing.

725686 11y ago

Proponentes of cryptocurrencies highlight the fact that it is not controlled/manipulated by governments and banks, but when something goes wrong they go running to daddy government for help.

icebraining 11y ago
So, it's inconsistent to think that the State should only perform some tasks? Are only complete statism and complete anarchism the valid positions?
- deleted 11y ago
  [deleted]

rwallace 11y ago

Either I'm misunderstanding this or other people are, because I'm seeing other people interpret this as saying Japanese law doesn't allow ownership of intangible things, which of course it does. My take on it is that this is specifically about a provision of bankruptcy law. Suppose you lend (not give or sell) your car to a company that then goes bankrupt with the vehicle in its possession, and you go along to reclaim it. The officials handling the case might say "Okay, let's check the blue book value of the car and you'll get your pro rata percentage of that money when everything is settled." To which you can reply "No, you don't understand. I'm not saying the company owes me money. I'm saying that's my car, license number such and such, it doesn't belong to the company at all, so it's not part of the bankruptcy proceedings, it belongs to me and I want it back right now." And assuming you have the documentation to prove it, the law will support your case. In this case the court has ruled that you can't point to a particular bitcoin and say that's my bitcoin, because bitcoin has the properties of money rather than of particular tangible objects, so all you can say is you are owed a certain amount of bitcoins. And so the owner of such will get his pro rata percentage after everything is settled, instead of getting the whole lot right now. Am I understanding it correctly?

ska 11y ago
As far as I can see, yes, you are understanding it correctly. This discussion seems full of misinterpreting a term of art as something closer to colloquial meaning, and then drawing inferences from that. Such inferences by nature will usually be deeply flawed.
SCAQTony 11y ago
Your second to last paragraph; that is an interesting concept! Imagine if the court orders this beast to pay back the victims in Bitcoins with the exact amount of bitcoins they had lost rather than the dollar value. Since he will be paying them back in Bitcoins that have lost 75% or more of their value when he exits jail, he may still own 6-figures in "cash" worth of Bitcoins.
- ams6110 11y ago
  I don't think a bankruptcy court would accept settlement in bitcoins; since bankruptcy settlements are based on a share of the remaining asset value in the bankrupt entity.

javert 11y ago

This story is a victim of poor reporting and translation. There is a reddit comment that clears it up and is extremely fascinating in its own right: https://www.reddit.com/r/Bitcoin/comments/3fztzt/tokyo_court_bitcoin_not_subject_to_ownership/cttk8f8 https://www.reddit.com/r/Bitcoin/comments/3fztzt/tokyo_court...