4 ms·

This guy doesn't really have a leg to stand on. Just like when the flash crash happened on the real stock market, transactions are going to be rolled back. On

This guy doesn't really have a leg to stand on. Just like when the flash crash happened on the real stock market, transactions are going to be rolled back. One thing that has become abundantly clear from reading all of the comments on the Bitcoin forums is that the investing knowledge of most BTC traders is much less than your average equities, fixed income, or ForEx trader. MtGox is a pretty low budget operation, but even a low budget operation isn't just going to let someone steal the equivalent of $10,000,000 USD and not reverse the transactions. It would be like your bank telling you "sorry, someone transferred money out of your account without your authorization, but we're just going to let them keep it because, hey, they won it fair and square by hacking your account." (As I write this last line I realize there was recently a court case regarding this exact issue, ETF fraud, but it occurred over many days and the company had authorized an agreement that they would check their account balance daily for fraudulent transactions.)

mbreese 15y ago
I had transactions in the flash crash that weren't rolled back and I lost a big chunk of cash (well, for me). I just don't see how an exchange that doesn't have builtin failsafes/circuit breakers can just roll back trades. I think that in this case, the exchange should be liable. He was just exploiting the market.
- illumin8 15y ago
  Not everyone's transactions were rolled back by the NYSE, but there were some people that had bought shares for 0.01 that did get rolled back.
- davemabe 15y ago
  There are trades that get "busted" (i.e. rolled back) every day in the US stock markets. I've had it happen several times. This is part of normal market activity. In my experience it has seemed pretty subjective - some trades that I thought for sure would have been busted weren't and others were. There's some speculation that when some more powerful market participants (read: Goldman Sachs) are on the losing end of a questionable trade they complain to the exchange and get the trade busted far more frequently than when it happens to less powerful participants.
tptacek 15y ago
A regional bank in New England recently prevailed with exactly that argument in court.
- uxp 15y ago
  More background: In that particular case, the password of an account was obtained on the customer's computer (a keylogger or a phishing attack targeted at the customer directly), as opposed to the bank's network being attacked and the customer chosen at random. Basis of the ruling was that the bank could have prevented the attacker from withdrawing money, which could have been flagged as suspicious, but it was up to the customer to protect his account, not the bank to act as guardian to every customer. In regards to this MtGox issue using the same argument, if it is known that an attack did happen, an that attack was directed at MtGox directly, then yes, they should roll back that trade because someone is out money/BTC due to an attack that could not have been prevented by that account holder. The only way to legitimately know who is responsible for the sell off is to be transparent, however, it seems that MtGox hasn't fully released details of the incident and we are all speculating on what exactly happened.

mbreese 15y ago

I had transactions in the flash crash that weren't rolled back and I lost a big chunk of cash (well, for me). I just don't see how an exchange that doesn't have builtin failsafes/circuit breakers can just roll back trades. I think that in this case, the exchange should be liable. He was just exploiting the market.

illumin8 15y ago
Not everyone's transactions were rolled back by the NYSE, but there were some people that had bought shares for 0.01 that did get rolled back.
davemabe 15y ago
There are trades that get "busted" (i.e. rolled back) every day in the US stock markets. I've had it happen several times. This is part of normal market activity. In my experience it has seemed pretty subjective - some trades that I thought for sure would have been busted weren't and others were. There's some speculation that when some more powerful market participants (read: Goldman Sachs) are on the losing end of a questionable trade they complain to the exchange and get the trade busted far more frequently than when it happens to less powerful participants.

tptacek 15y ago

A regional bank in New England recently prevailed with exactly that argument in court.

uxp 15y ago
More background: In that particular case, the password of an account was obtained on the customer's computer (a keylogger or a phishing attack targeted at the customer directly), as opposed to the bank's network being attacked and the customer chosen at random. Basis of the ruling was that the bank could have prevented the attacker from withdrawing money, which could have been flagged as suspicious, but it was up to the customer to protect his account, not the bank to act as guardian to every customer. In regards to this MtGox issue using the same argument, if it is known that an attack did happen, an that attack was directed at MtGox directly, then yes, they should roll back that trade because someone is out money/BTC due to an attack that could not have been prevented by that account holder. The only way to legitimately know who is responsible for the sell off is to be transparent, however, it seems that MtGox hasn't fully released details of the incident and we are all speculating on what exactly happened.