6 ms·

You can say that, but when MtGox went bankrupt, and also lost 4 fifths of its stored crypto, the court just heaped together all assets into one big pile and all

by tinco 4y ago

You can say that, but when MtGox went bankrupt, and also lost 4 fifths of its stored crypto, the court just heaped together all assets into one big pile and all creditors into one big pile and let them fight it out. So now there's a bunch of assholes including but not limited to Peter Vessenes, that are suing the bankrupt entity for billions (completely frivolous of course) and all the depositors have waited for 8 years now to get a fraction back that the vultures have been picking on. It's completely unfair, but the courts simply don't distinguish between someone who partners with an exchange, and someone who deposits money at an exchange.

danaris 4y ago
And that's largely because of the lack of regulation that so many cryptocurrency fans tout. If it's not legally regulated as a currency, or a security, or anything of the sort, then why would it be considered to belong to you, and not Mt Gox, once you've given it to them? All you have is a digital account that's basically the legal equivalent of an IOU on a napkin. Welcome to your libertarian utopia.
- anon291 4y ago
  An IOU on a napkin has legal weight.
- tinco 4y ago
  Let the record show that I have always supported (explicit) regulation of cryptocurrency. In addition I have always held the opinion that Ripple is a security, not a cryptocurrency, and that it should never have been tolerated by the SEC. The reality there is that no one is actually doing anything about anything unless there's a big scandal. Maybe FTX will change things.
- kinnth 4y ago
  Defi is not this. In defi exchanges you place your coins into a smart contract or have them always on your account. If anything a crypto exchange is a misnomer as it's not even needed. The only reason it exists is because smart contracts didn't exist when they first started.
  - charcircuit 4y ago
    >The only reason it exists is because smart contracts didn't exist when they first started. Calm down. That is not true. Smart contract based exchanges do not let people exchange real money into crypto. There will always need to be offchain exchanges for trading USD for crypto. Additionally, trading off chain is much cheaper than on chain. Centralized exchanges will always exist because people want on / off ramps, people want low fees, and because people are willing to trust others.
    - LawTalkingGuy 4y ago
      >> smart contracts didn't exist when they first started. > Calm down. That is not true. It pretty much is. Bitcoin's solution to scripting exploits was to weaken scripting. It would have been impractical to use BTC for defi and more work was undergoing to fix those problems. The weasels snuck in at the beginning and now that we can do without them they're already in the walls. > Smart contract based exchanges do not let people exchange real money into crypto. For trading there are a couple of options (aside from Tether, which is a scam) for pegging a trade to USD. For on/offramp, you are sorta right. If I want to trade for strawberries I need someone holding strawberries, and I have a risk he'll give me raspberries. > Centralized exchanges will always exist because people want on / off ramps, people want low fees On/off ramps don't require centralization, they only require one legally bound actor, and we can all pick our fave. You may trust a lawyer near you, I may trust my local gold bullion store for up to $5k at a time, etc. Low fees are far better achieved by a channel or rollup based solution, where the assets are essentially on-chain the entire time. > and because people are willing to trust others. This is bad argument. You're trying to make trust virtuous even though removing the need for trust is far better for society - removing risk and friction for everyone.
    - oblio 4y ago
      > Additionally, trading off chain is much cheaper than on chain. How this does not wake up all the idiots, I will never understand. How come your superior technology is inferior in one of the crucial axes of trading technology???
- somenameforme 4y ago
  If you let somebody borrow your car and they steal it, that's still a crime. You don't need to be a regulated and registered automotive lender to make it anymore or less of a crime. The law has surprisingly strong enforcement of even informal agreements (such as e.g. an email), and these agreements were anything but informal. Incidentally, protection of property rights is one of the primary roles of the government in a libertarian ideology. It's not anarchy.
  - JumpCrisscross 4y ago
    > you let somebody borrow your car and they steal it, that's still a crime Agreed. But there is no public requirement to direct prosecutorial resources towards your recovery. If the criminal is prosecuted, recovery is a secondary concern, an enforcement cost often borne by the victims through civil action.
- johannes1234321 4y ago
  > And that's largely because of the lack of regulation that so many cryptocurrency fans tout. In next sentence they will tell you, that you shouldn't have kept the private keys at the exchange. Use your own wallet and keep your copy of the Blockchain.
  - lottin 4y ago
    Your "own wallet" is just a piece of software, so it could potentially steal your "coins" could it not?
    - wizeman 4y ago
      Hardware wallets, which are recommended for holding significant amounts of cryptocurrency, are designed so that even if your normal computing devices get hacked or trojaned, the software running on them cannot steal the coins. This is because the private keys are securely stored in the hardware wallet, which never reveals them to the outside world. The user has to physically confirm a transfer on the hardware wallet itself before funds can be spent (which is why they usually have either a small touchscreen or a non-touch screen plus physical buttons).
      - lottin 4y ago
        > The user has to physically confirm a transfer on the hardware wallet And once the user has confirmed the transfer, the software could send the coins to a different address, right?
        wizeman 4y ago
        > And once the user has confirmed the transfer, the software could send the coins to a different address, right? No, the destination address and amount to send need to be confirmed on the hardware wallet. The hardware wallet cryptographically signs the entire transaction with the private key, so the software in the user's computer or mobile phone cannot change the transaction without the signature becoming invalid.
deleted 4y ago
[deleted]
stefan_ 4y ago
Crypto isn't money. You are not a bank customer depositing cash. I'm not sure why their customers should be creditors at all, it's a bit like asking GMail for your emails back when Google goes bankrupt.
- anamexis 4y ago
  Let's not forget that "crypto" here is short for cryptocurrency.
  - singlow 4y ago
    Well, I call my crypto BabyCoins, so when you confiscate them you are kidnapping right?
- tinco 4y ago
  > a bit like asking GMail for your emails back when Google goes bankrupt. And I sure as heck would want by e-mails back if Google goes bankrupt. Google shouldn't own them, they're just an exchange for e-mails. The idea that another entity would buy those e-mails and do with them what they like is ridiculous, regardless of any juristic reality.
  - arcticbull 4y ago
    I'm not so sure actually. I think your hypothetical is actually exactly what would happen.
- rchaud 4y ago
  Gmail lets you download your emails to a POP setup on your local disk. That's more than reasonable IMO.
- IanCal 4y ago
  As much as tech-bros think that the legal system is stupid, it's usually had to deal with many variations on a theme and has ended up with broad definitions around things of value. It doesn't matter if that thing is chickens, a right to land, potential mining rights or a stamp worth millions. A weird techno thing that has a public dollar value is not hard for it to work with.
bombcar 4y ago
The exchanges work very hard to not distinguish between those legally, because if they admit it, they're admitting bank-like aspects and regulations kick in, which they're often trying to avoid.
rippercushions 4y ago
Well, let's not forget that BTC has gone up from $300 to $15,000 in the meantime, meaning those fractions are still worth 50x what they were back in 2014. Although who knows what the value of BTC will be once the funds are released, which is itself an event that's likely to crash the market through oversupply.
- kibwen 4y ago
  > Well, let's not forget that BTC has gone up from $300 to $15,000 Depending on how one measures. Prior to Gox's implosion, BTC was $1,000, which is the price people were actually depositing at. Meanwhile, the fact that we're denominating in USD means that we have to account for inflation if we want to compare historical data, which means the current price is more like $13,000 in 2014. There's quite the difference between 13x and 50x.
  - tinco 4y ago
    I prefer to use the trustee's watermark which reflects the value of Bitcoin after the price manipulation of fake Bitcoin being sold by MtGox had been taken out of the market at $460. But your point is made even stronger if you consider that same money could have been safely invested with a steady interest of 2-4%. And that's if you disregard that the sort of risky investments that that sort of play money could have gone to, nearly all of those investments have been extremely lucrative the past 8 years.
- throwaway2037 4y ago
  I don't understand this comment. Replace with Apple/Google/Amazon/Tesla stock. It sounds like the same story. What are you saying?
jandrese 4y ago
MtGox was pretty much stripped bare long before it was finally closed down. In fact it was effectively insolvent before it was even bought out by the last owner and running in pure Ponzi mode while the guy tried to make creative "investments" to get the exchange solvent again. Even with the incredible bull market on Bitcoin he couldn't make it work. So nobody should expect to get much of anything out of the remains of MtGox. https://en.cryptonomist.ch/2022/08/15/mt-gox-how-bitcoin-stolen/ https://en.cryptonomist.ch/2022/08/15/mt-gox-how-bitcoin-sto...
- jonas21 4y ago
  Despite these issues, and despite and the hack, creditors are still set to make at least a 4x return (in USD) based on appreciation of the bitcoin that wasn't stolen. [1] https://www.bloomberg.com/news/articles/2022-07-07/mt-gox-creditors-inch-closer-to-repayment-as-bitcoin-dump-looms https://www.bloomberg.com/news/articles/2022-07-07/mt-gox-cr...
MrStonedOne 4y ago
mtsr 4y ago
To do this legally, one can have a separate legal entity to hold on to third party assets. In the Netherlands this can be done using a foundation (stichting derdengelden). Any transactions of third party assets go through this entity and don’t touch the company at all. And this entity doesn’t take on any risk, whatsoever. Fees etc, of course, happen separately and are paid to the company. So in closing: this has nothing to do with fairness and everything with the exchanges (whether purposefully or through negligence) not working this way.
- danuker 4y ago
  What is there to gain? When one type of depositors can't be repaid, the liability of the rest of the company is limited? What makes you think the whole company was more than a front for an exit scam? Dividends could have gone to the owners well before it went bankrupt.

by tinco 4y ago

danaris 4y ago

And that's largely because of the lack of regulation that so many cryptocurrency fans tout. If it's not legally regulated as a currency, or a security, or anything of the sort, then why would it be considered to belong to you, and not Mt Gox, once you've given it to them? All you have is a digital account that's basically the legal equivalent of an IOU on a napkin. Welcome to your libertarian utopia.

anon291 4y ago
An IOU on a napkin has legal weight.
tinco 4y ago
Let the record show that I have always supported (explicit) regulation of cryptocurrency. In addition I have always held the opinion that Ripple is a security, not a cryptocurrency, and that it should never have been tolerated by the SEC. The reality there is that no one is actually doing anything about anything unless there's a big scandal. Maybe FTX will change things.
kinnth 4y ago
Defi is not this. In defi exchanges you place your coins into a smart contract or have them always on your account. If anything a crypto exchange is a misnomer as it's not even needed. The only reason it exists is because smart contracts didn't exist when they first started.
- charcircuit 4y ago
  >The only reason it exists is because smart contracts didn't exist when they first started. Calm down. That is not true. Smart contract based exchanges do not let people exchange real money into crypto. There will always need to be offchain exchanges for trading USD for crypto. Additionally, trading off chain is much cheaper than on chain. Centralized exchanges will always exist because people want on / off ramps, people want low fees, and because people are willing to trust others.
  - LawTalkingGuy 4y ago
    >> smart contracts didn't exist when they first started. > Calm down. That is not true. It pretty much is. Bitcoin's solution to scripting exploits was to weaken scripting. It would have been impractical to use BTC for defi and more work was undergoing to fix those problems. The weasels snuck in at the beginning and now that we can do without them they're already in the walls. > Smart contract based exchanges do not let people exchange real money into crypto. For trading there are a couple of options (aside from Tether, which is a scam) for pegging a trade to USD. For on/offramp, you are sorta right. If I want to trade for strawberries I need someone holding strawberries, and I have a risk he'll give me raspberries. > Centralized exchanges will always exist because people want on / off ramps, people want low fees On/off ramps don't require centralization, they only require one legally bound actor, and we can all pick our fave. You may trust a lawyer near you, I may trust my local gold bullion store for up to $5k at a time, etc. Low fees are far better achieved by a channel or rollup based solution, where the assets are essentially on-chain the entire time. > and because people are willing to trust others. This is bad argument. You're trying to make trust virtuous even though removing the need for trust is far better for society - removing risk and friction for everyone.
  - oblio 4y ago
    > Additionally, trading off chain is much cheaper than on chain. How this does not wake up all the idiots, I will never understand. How come your superior technology is inferior in one of the crucial axes of trading technology???
somenameforme 4y ago
If you let somebody borrow your car and they steal it, that's still a crime. You don't need to be a regulated and registered automotive lender to make it anymore or less of a crime. The law has surprisingly strong enforcement of even informal agreements (such as e.g. an email), and these agreements were anything but informal. Incidentally, protection of property rights is one of the primary roles of the government in a libertarian ideology. It's not anarchy.
- JumpCrisscross 4y ago
  > you let somebody borrow your car and they steal it, that's still a crime Agreed. But there is no public requirement to direct prosecutorial resources towards your recovery. If the criminal is prosecuted, recovery is a secondary concern, an enforcement cost often borne by the victims through civil action.
johannes1234321 4y ago
> And that's largely because of the lack of regulation that so many cryptocurrency fans tout. In next sentence they will tell you, that you shouldn't have kept the private keys at the exchange. Use your own wallet and keep your copy of the Blockchain.
- lottin 4y ago
  Your "own wallet" is just a piece of software, so it could potentially steal your "coins" could it not?
  - wizeman 4y ago
    Hardware wallets, which are recommended for holding significant amounts of cryptocurrency, are designed so that even if your normal computing devices get hacked or trojaned, the software running on them cannot steal the coins. This is because the private keys are securely stored in the hardware wallet, which never reveals them to the outside world. The user has to physically confirm a transfer on the hardware wallet itself before funds can be spent (which is why they usually have either a small touchscreen or a non-touch screen plus physical buttons).
    - lottin 4y ago
      > The user has to physically confirm a transfer on the hardware wallet And once the user has confirmed the transfer, the software could send the coins to a different address, right?
      - wizeman 4y ago
        > And once the user has confirmed the transfer, the software could send the coins to a different address, right? No, the destination address and amount to send need to be confirmed on the hardware wallet. The hardware wallet cryptographically signs the entire transaction with the private key, so the software in the user's computer or mobile phone cannot change the transaction without the signature becoming invalid.

deleted 4y ago

[deleted]

stefan_ 4y ago

Crypto isn't money. You are not a bank customer depositing cash. I'm not sure why their customers should be creditors at all, it's a bit like asking GMail for your emails back when Google goes bankrupt.

anamexis 4y ago
Let's not forget that "crypto" here is short for cryptocurrency.
- singlow 4y ago
  Well, I call my crypto BabyCoins, so when you confiscate them you are kidnapping right?
tinco 4y ago
> a bit like asking GMail for your emails back when Google goes bankrupt. And I sure as heck would want by e-mails back if Google goes bankrupt. Google shouldn't own them, they're just an exchange for e-mails. The idea that another entity would buy those e-mails and do with them what they like is ridiculous, regardless of any juristic reality.
- arcticbull 4y ago
  I'm not so sure actually. I think your hypothetical is actually exactly what would happen.
rchaud 4y ago
Gmail lets you download your emails to a POP setup on your local disk. That's more than reasonable IMO.
IanCal 4y ago
As much as tech-bros think that the legal system is stupid, it's usually had to deal with many variations on a theme and has ended up with broad definitions around things of value. It doesn't matter if that thing is chickens, a right to land, potential mining rights or a stamp worth millions. A weird techno thing that has a public dollar value is not hard for it to work with.

bombcar 4y ago

The exchanges work very hard to not distinguish between those legally, because if they admit it, they're admitting bank-like aspects and regulations kick in, which they're often trying to avoid.

rippercushions 4y ago

Well, let's not forget that BTC has gone up from $300 to $15,000 in the meantime, meaning those fractions are still worth 50x what they were back in 2014. Although who knows what the value of BTC will be once the funds are released, which is itself an event that's likely to crash the market through oversupply.

kibwen 4y ago
> Well, let's not forget that BTC has gone up from $300 to $15,000 Depending on how one measures. Prior to Gox's implosion, BTC was $1,000, which is the price people were actually depositing at. Meanwhile, the fact that we're denominating in USD means that we have to account for inflation if we want to compare historical data, which means the current price is more like $13,000 in 2014. There's quite the difference between 13x and 50x.
- tinco 4y ago
  I prefer to use the trustee's watermark which reflects the value of Bitcoin after the price manipulation of fake Bitcoin being sold by MtGox had been taken out of the market at $460. But your point is made even stronger if you consider that same money could have been safely invested with a steady interest of 2-4%. And that's if you disregard that the sort of risky investments that that sort of play money could have gone to, nearly all of those investments have been extremely lucrative the past 8 years.
throwaway2037 4y ago
I don't understand this comment. Replace with Apple/Google/Amazon/Tesla stock. It sounds like the same story. What are you saying?

jandrese 4y ago

MtGox was pretty much stripped bare long before it was finally closed down. In fact it was effectively insolvent before it was even bought out by the last owner and running in pure Ponzi mode while the guy tried to make creative "investments" to get the exchange solvent again. Even with the incredible bull market on Bitcoin he couldn't make it work. So nobody should expect to get much of anything out of the remains of MtGox. https://en.cryptonomist.ch/2022/08/15/mt-gox-how-bitcoin-stolen/ https://en.cryptonomist.ch/2022/08/15/mt-gox-how-bitcoin-sto...

jonas21 4y ago
Despite these issues, and despite and the hack, creditors are still set to make at least a 4x return (in USD) based on appreciation of the bitcoin that wasn't stolen. [1] https://www.bloomberg.com/news/articles/2022-07-07/mt-gox-creditors-inch-closer-to-repayment-as-bitcoin-dump-looms https://www.bloomberg.com/news/articles/2022-07-07/mt-gox-cr...

MrStonedOne 4y ago

mtsr 4y ago

To do this legally, one can have a separate legal entity to hold on to third party assets. In the Netherlands this can be done using a foundation (stichting derdengelden). Any transactions of third party assets go through this entity and don’t touch the company at all. And this entity doesn’t take on any risk, whatsoever. Fees etc, of course, happen separately and are paid to the company. So in closing: this has nothing to do with fairness and everything with the exchanges (whether purposefully or through negligence) not working this way.

danuker 4y ago
What is there to gain? When one type of depositors can't be repaid, the liability of the rest of the company is limited? What makes you think the whole company was more than a front for an exit scam? Dividends could have gone to the owners well before it went bankrupt.