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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

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.
  - reverend_gonzo 9y ago
    > 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. Wrong. If you have money stored in a bank that is insured by the FDIC (and pays depositor's insurance), then you are insured. If you have a cash deposit with a brokerage that is not FDIC insured, and their CEO spends customer's money (that they are not allowed to), and go bankrupt, you are absolutely not insured by the FDIC, and will have to go to court to try to reclaim assets. This happened, see MF Global. In that case, the CEO (Jon Corzine) was very well connected and was able to sidestep prosecution and jail time. I'm going to bet that this clown is not well connected. Fortunately for him, all he embezzled was this bullshit toy currency, so hopefully, for him, its so irrelevant that he gets away unscathed.
    - matwood 9y ago
      For brokerage accounts SIPC kicks in. It took some time but according to the SIPC all funds were returned to MF Global customers: http://webcache.googleusercontent.com/search?q=cache:ORsA-jtNcToJ:www.sipc.org/news-and-media/news-releases/20160209+&cd=1&hl=en&ct=clnk&gl=us&client=safari http://webcache.googleusercontent.com/search?q=cache:ORsA-jt...
- nebabyte 9y ago
  > If you've got my Jesus shaped collectable potato chips in storage you can't sell them to keep your business afloat. With examples that small-fry, you're getting into 'small claims' territory, which basically amounts to you having your little slapfight in front of a judge until he tells one of you or the other to knock it off. > This is more akin to paypal, or some type of digital wallet Minus any of the user agreements, established business licenses, regulations, and other financial grunt work that it took to get PP up and running (and even then, they have free reign to freeze your account with little to no recourse if they think you're out of line - plenty of stories of people being burned by this) This is "more akin to" handing off your trading cards to the guy at work running the betting pool and trusting him not to fuck you over, except (A) trading cards are much easier to explain and (B) in this case you don't even know the guy.
  - lilbobbytables 9y ago
    > small-fry heh > Minus any of the user agreements... Exactly. Which is why I think comparing it to anything financial (banks, PP, etc) is silly in the first place. Replace collectable potato chips with baseball cards and you're back to the example I was trying to portray. If someone was holding your property (baseball cards) and sold them out from under you, then it seems like there would be good ground for a civil case.
- Double_Cast 9y ago
  This happened in Eve Online. Some guy acted as a defacto bank, built trust over several years, then blew all the credits on a flagship. Held legally accountable? Lmao. Guile is part of the game and all your credits belong to Eve.
  - fixermark 9y ago
    That'd have been a hilarious court case though. "But your honor, ISK is part of the EVE Online game, and it's in the nature of the game to build up a bunch of in-game assets and then get screwed out of them by other players. Players find this fun and continue to come back to it. "Exhibit A is the relevant value-lost-per-day in dumb territory disputes and ultimately meaningless fun-fights. As our expert witness, we're calling a psychologist who can explain the sort of masochism that factors into a person's enjoyment of this experience..." ;)
- fixermark 9y ago
  > 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. We've actually had situations similar to this play out. Star Wars Galaxies had a counterfeiting bug, and Sony responded to people exploiting the bug by zeroing out the money---regardless of whether the holder was a counterfeiter or a victim of a counterfeit---and banning a subset of players who were holding the money. While the path from "take player money" to "sell the money and pocket the value" isn't direct, deleting money from accounts has the side-effect of making all the remaining money more valuable; in essence, Sony boosted the per-player value of the remaining accounts and future created accounts (though that likely wasn't the intent of their actions; they were just punishing cheaters). Check the legal history to see what the ramifications were. To my memory: there were none. Game space money bought with real money isn't real money (should it be? Excellent question; I don't believe the law has caught up with that question yet).
  - lilbobbytables 9y ago
    That's still quite different. It is Sony's in game currency that they messed with themselves. Meaning, it's theirs to issue/manipulate it as they please. If a third party did that, it seems as though it would be much different.

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.
- reverend_gonzo 9y ago
  > 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. Wrong. If you have money stored in a bank that is insured by the FDIC (and pays depositor's insurance), then you are insured. If you have a cash deposit with a brokerage that is not FDIC insured, and their CEO spends customer's money (that they are not allowed to), and go bankrupt, you are absolutely not insured by the FDIC, and will have to go to court to try to reclaim assets. This happened, see MF Global. In that case, the CEO (Jon Corzine) was very well connected and was able to sidestep prosecution and jail time. I'm going to bet that this clown is not well connected. Fortunately for him, all he embezzled was this bullshit toy currency, so hopefully, for him, its so irrelevant that he gets away unscathed.
  - matwood 9y ago
    For brokerage accounts SIPC kicks in. It took some time but according to the SIPC all funds were returned to MF Global customers: http://webcache.googleusercontent.com/search?q=cache:ORsA-jtNcToJ:www.sipc.org/news-and-media/news-releases/20160209+&cd=1&hl=en&ct=clnk&gl=us&client=safari http://webcache.googleusercontent.com/search?q=cache:ORsA-jt...
nebabyte 9y ago
> If you've got my Jesus shaped collectable potato chips in storage you can't sell them to keep your business afloat. With examples that small-fry, you're getting into 'small claims' territory, which basically amounts to you having your little slapfight in front of a judge until he tells one of you or the other to knock it off. > This is more akin to paypal, or some type of digital wallet Minus any of the user agreements, established business licenses, regulations, and other financial grunt work that it took to get PP up and running (and even then, they have free reign to freeze your account with little to no recourse if they think you're out of line - plenty of stories of people being burned by this) This is "more akin to" handing off your trading cards to the guy at work running the betting pool and trusting him not to fuck you over, except (A) trading cards are much easier to explain and (B) in this case you don't even know the guy.
- lilbobbytables 9y ago
  > small-fry heh > Minus any of the user agreements... Exactly. Which is why I think comparing it to anything financial (banks, PP, etc) is silly in the first place. Replace collectable potato chips with baseball cards and you're back to the example I was trying to portray. If someone was holding your property (baseball cards) and sold them out from under you, then it seems like there would be good ground for a civil case.
Double_Cast 9y ago
This happened in Eve Online. Some guy acted as a defacto bank, built trust over several years, then blew all the credits on a flagship. Held legally accountable? Lmao. Guile is part of the game and all your credits belong to Eve.
- fixermark 9y ago
  That'd have been a hilarious court case though. "But your honor, ISK is part of the EVE Online game, and it's in the nature of the game to build up a bunch of in-game assets and then get screwed out of them by other players. Players find this fun and continue to come back to it. "Exhibit A is the relevant value-lost-per-day in dumb territory disputes and ultimately meaningless fun-fights. As our expert witness, we're calling a psychologist who can explain the sort of masochism that factors into a person's enjoyment of this experience..." ;)
fixermark 9y ago
> 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. We've actually had situations similar to this play out. Star Wars Galaxies had a counterfeiting bug, and Sony responded to people exploiting the bug by zeroing out the money---regardless of whether the holder was a counterfeiter or a victim of a counterfeit---and banning a subset of players who were holding the money. While the path from "take player money" to "sell the money and pocket the value" isn't direct, deleting money from accounts has the side-effect of making all the remaining money more valuable; in essence, Sony boosted the per-player value of the remaining accounts and future created accounts (though that likely wasn't the intent of their actions; they were just punishing cheaters). Check the legal history to see what the ramifications were. To my memory: there were none. Game space money bought with real money isn't real money (should it be? Excellent question; I don't believe the law has caught up with that question yet).
- lilbobbytables 9y ago
  That's still quite different. It is Sony's in game currency that they messed with themselves. Meaning, it's theirs to issue/manipulate it as they please. If a third party did that, it seems as though it would be much different.