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For what its worth, customers' fund are not "business assets". He had no legal right to spend that money. Now, he may have thought he could use it to float som

For what its worth, customers' fund are not "business assets". He had no legal right to spend that money. Now, he may have thought he could use it to float some funds, and put them back, and no one would be any wiser, but that's definitely illegal. He may not be a bad person, and he may not be an idiot in the larger scheme of things, but this was an idiotic move, and a terrible (and unethical) decision, that may very well have legal repercussions.

toyg 9y ago
> He had no legal right to spend that money. But that's not real money. All the protections and rights of legal money do not necessarily apply to cryptocurrencies, bitcoin being the sole cryptocurrency with a degree of legal respectability. This bot was more like a club where people tipped in to play a game together. It can be argued that it's like you chipped in to buy donuts for your local club to play "pass the donut", and the club later sold the donuts to stay open. The service was free so it's hard to find a breach of contract anywhere, especially if the company went bankrupt. Such is the joy of "privatized money".
- reverend_gonzo 9y ago
  Regardless of whether or not it is money, one thing is for sure, and that is, it is property. The donut analogy doesn't work, because in your case, you are donating donuts to the club. This is more like you lend a TV to the club, with the caveat that you still own it, and can take it back at any time. The club decides to pawn in, thinking it will just buy it back when it has money again, and you won't have any idea. But then it can't, and it sold property that wasn't its to sell in the first place.
JustAnotherPat 9y ago
He didn't spend anybody's money. He spent their dogecoin which is a bunch of made up gibberish.
- ifdefdebug 9y ago
  FWIW, he had no right to spend his customer's made up gibberish either.
  - AdamSC1 9y ago
    Had no moral right. Did he have a legal right? That's more complicated. (Still don't think he should have)
- cl0wnshoes 9y ago
  Made up gibberish worth an estimated 140-400k USD based on the wallets ranking (top 100). Somehow that gibberish was transformed into "real" money to pay the bills.
criley2 9y ago
"For what its worth, customers' fund are not "business assets". He had no legal right to spend that money. Now, he may have thought he could use it to float some funds, and put them back, and no one would be any wiser, but that's definitely illegal." This is true, and the comparison with banks fractional reserve isn't 1:1 The banks aren't taking your money to pay their bills, they're using your money along a legally defined path of creating and selling investment products with the government in a well-defined position to protect your savings as a guarantor. I suspect that the Dogecoin business could have leveraged customer deposits in investment products similarly, but would likely require an insane amount of bureaucracy and i-dotting before they could do it.
AdamSC1 9y ago
Terrible move, yes. As for legality, that depends on jurisdiction. Cryptocurrencies are not recognized as a legal tender currency in many areas. In some areas they are, in other areas they are considered an asset like a stock, in others a collectable and in some places have no more legal rights than the gold you earn in World of Warcraft. I agree he had no moral right to spend that money, but legal becomes highly debatable. It will be interesting to see if there are any small claims cases that rise out of it as it could actually push forward legislation on crypto.
- lilbobbytables 9y ago
  It is not highly legally debatable. Debatable, maybe. Highly? I highly doubt that. > no more legal rights than the gold you earn in World of Warcraft Undoubtedly, if a company offered some sort of account to store that gold, they'd be in deep shit if they took gold from those accounts and sold it to pocket the money. It doesn't matter if it's cryptocurrency, collectible, stock, etc, it still is not a business asset. If you've got my Jesus shaped collectable potato chips in storage you can't sell them to keep your business afloat. If you're a brokerage whom I have an account with for my stocks or asset trading, you can't sell my assets to keep your business afloat. If you're a bank storing my currency, there are very specific rules that govern you, and my money is FDIC insured. This isn't a bank, period. You can't just change the rules saying "well, banks don't always have your cash on hand, so this guy doesn't have to either". There are rules around how all of that works anyways - and he wasn't operating within them. This is more akin to paypal, or some type of digital wallet. As it's an "account" where you can "send and receive dogecoins". There is no reasonable expectation that anyone else should have access to the dogecoins in your account. There's weird grey area around that shit, but suffice to say my assets are NOT your business assets.
  - AdamSC1 9y ago
    No. If a company let you store world of warcraft cold and took some of that gold they'd go out of business, but it wouldn't likely have straight forward legal ramifications unless their terms of service had very clear expectations of what "holding" your gold meant. Further, in many digital assets like world of warcraft technically the creating company (Blizzard) still owns the asset regardless of what you do with it or where it goes. If you are storing currency, that is legally defined as currency by your legal jurisdiction (usually the state level) then there are very specific rules for money transmission and money service business licensed businesses. And your accounts are insured upto the legal required amount of $100,000 by the FDIC. However, many states have NOT classified cryptocurrency as a currency nor required exchanges and services operating solely in cryptocurrency to get a license as a financial service (different if it allows exchanging of crypto and traditional currency). Because of this it is unclear what the legal doctrine is that would apply to it. Now if I had as you said "a jesus shaped collectable potato chip" in storage that belonged to you, can I sell it? That depends. For example, for a storage facility if your payments are late I certainly can. For plenty of digital assets accounts your funds are taken by the company after X days of inactivity. Then you have services like PayPal which terms of service allows them to freeze your accounts and keep the funds for anything that violates their terms of service (rules designed by them, which you agree to on sign up). So was Dogetipbot in the legal clear for doing this? Probably not. There is some level of negligence, some level of consumer loss and can probably be a tort case. But was it flat out illegal? No. It was at worst a civil case, but that depends on their terms of service and the legal standing of cryptocurrency in various jurisdictions. Disclaimer: Not a lawyer, not legal advice.
fixermark 9y ago
Legally (depending on jurisdiction), it's barely "money." The notion that he had any legal rights is a bit vacant. Morally, I think "spreading the risk you've brought upon yourself to your creditors without their knowledge or consent" is generally considered a financial dick move though. ;)

toyg 9y ago

> He had no legal right to spend that money. But that's not real money. All the protections and rights of legal money do not necessarily apply to cryptocurrencies, bitcoin being the sole cryptocurrency with a degree of legal respectability. This bot was more like a club where people tipped in to play a game together. It can be argued that it's like you chipped in to buy donuts for your local club to play "pass the donut", and the club later sold the donuts to stay open. The service was free so it's hard to find a breach of contract anywhere, especially if the company went bankrupt. Such is the joy of "privatized money".

reverend_gonzo 9y ago
Regardless of whether or not it is money, one thing is for sure, and that is, it is property. The donut analogy doesn't work, because in your case, you are donating donuts to the club. This is more like you lend a TV to the club, with the caveat that you still own it, and can take it back at any time. The club decides to pawn in, thinking it will just buy it back when it has money again, and you won't have any idea. But then it can't, and it sold property that wasn't its to sell in the first place.

JustAnotherPat 9y ago

He didn't spend anybody's money. He spent their dogecoin which is a bunch of made up gibberish.

ifdefdebug 9y ago
FWIW, he had no right to spend his customer's made up gibberish either.
- AdamSC1 9y ago
  Had no moral right. Did he have a legal right? That's more complicated. (Still don't think he should have)
cl0wnshoes 9y ago
Made up gibberish worth an estimated 140-400k USD based on the wallets ranking (top 100). Somehow that gibberish was transformed into "real" money to pay the bills.

criley2 9y ago

"For what its worth, customers' fund are not "business assets". He had no legal right to spend that money. Now, he may have thought he could use it to float some funds, and put them back, and no one would be any wiser, but that's definitely illegal." This is true, and the comparison with banks fractional reserve isn't 1:1 The banks aren't taking your money to pay their bills, they're using your money along a legally defined path of creating and selling investment products with the government in a well-defined position to protect your savings as a guarantor. I suspect that the Dogecoin business could have leveraged customer deposits in investment products similarly, but would likely require an insane amount of bureaucracy and i-dotting before they could do it.

AdamSC1 9y ago

Terrible move, yes. As for legality, that depends on jurisdiction. Cryptocurrencies are not recognized as a legal tender currency in many areas. In some areas they are, in other areas they are considered an asset like a stock, in others a collectable and in some places have no more legal rights than the gold you earn in World of Warcraft. I agree he had no moral right to spend that money, but legal becomes highly debatable. It will be interesting to see if there are any small claims cases that rise out of it as it could actually push forward legislation on crypto.

lilbobbytables 9y ago
It is not highly legally debatable. Debatable, maybe. Highly? I highly doubt that. > no more legal rights than the gold you earn in World of Warcraft Undoubtedly, if a company offered some sort of account to store that gold, they'd be in deep shit if they took gold from those accounts and sold it to pocket the money. It doesn't matter if it's cryptocurrency, collectible, stock, etc, it still is not a business asset. If you've got my Jesus shaped collectable potato chips in storage you can't sell them to keep your business afloat. If you're a brokerage whom I have an account with for my stocks or asset trading, you can't sell my assets to keep your business afloat. If you're a bank storing my currency, there are very specific rules that govern you, and my money is FDIC insured. This isn't a bank, period. You can't just change the rules saying "well, banks don't always have your cash on hand, so this guy doesn't have to either". There are rules around how all of that works anyways - and he wasn't operating within them. This is more akin to paypal, or some type of digital wallet. As it's an "account" where you can "send and receive dogecoins". There is no reasonable expectation that anyone else should have access to the dogecoins in your account. There's weird grey area around that shit, but suffice to say my assets are NOT your business assets.
- AdamSC1 9y ago
  No. If a company let you store world of warcraft cold and took some of that gold they'd go out of business, but it wouldn't likely have straight forward legal ramifications unless their terms of service had very clear expectations of what "holding" your gold meant. Further, in many digital assets like world of warcraft technically the creating company (Blizzard) still owns the asset regardless of what you do with it or where it goes. If you are storing currency, that is legally defined as currency by your legal jurisdiction (usually the state level) then there are very specific rules for money transmission and money service business licensed businesses. And your accounts are insured upto the legal required amount of $100,000 by the FDIC. However, many states have NOT classified cryptocurrency as a currency nor required exchanges and services operating solely in cryptocurrency to get a license as a financial service (different if it allows exchanging of crypto and traditional currency). Because of this it is unclear what the legal doctrine is that would apply to it. Now if I had as you said "a jesus shaped collectable potato chip" in storage that belonged to you, can I sell it? That depends. For example, for a storage facility if your payments are late I certainly can. For plenty of digital assets accounts your funds are taken by the company after X days of inactivity. Then you have services like PayPal which terms of service allows them to freeze your accounts and keep the funds for anything that violates their terms of service (rules designed by them, which you agree to on sign up). So was Dogetipbot in the legal clear for doing this? Probably not. There is some level of negligence, some level of consumer loss and can probably be a tort case. But was it flat out illegal? No. It was at worst a civil case, but that depends on their terms of service and the legal standing of cryptocurrency in various jurisdictions. Disclaimer: Not a lawyer, not legal advice.

fixermark 9y ago

Legally (depending on jurisdiction), it's barely "money." The notion that he had any legal rights is a bit vacant. Morally, I think "spreading the risk you've brought upon yourself to your creditors without their knowledge or consent" is generally considered a financial dick move though. ;)