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As I understand it, for those who don't want to read the legal docs: This past February, MtGox and Coinlab announced a partnership. Coinlab, a Silicon Valley

As I understand it, for those who don't want to read the legal docs: This past February, MtGox and Coinlab announced a partnership. Coinlab, a Silicon Valley venture-backed company, was to handle MtGox's US and Canadian transactions. This was a massive announcement; news of it alone caused a 40% increase in the value of bitcoins. MtGox (allegedly) breached the contract, however, by not giving Coinlab exclusive access to the North American market. MtGox was supposed to transfer North American clients to Coinlab. From the doc: "Defendants have breached the exclusivity provisions of the Agreement by directly servicing customers in the United States and Canada since the Agreement took effect". The suit is for $75 million, an amount that Coinlab claims is "likely underestimates the actual damages." EDIT: Shame the damages they're demanding are in USD rather than bitcoin :)

carbocation 14y ago
> This was a massive announcement; news of it alone caused a 40% increase in the value of bitcoins. Either that, or it was announced as one of the bubbles was frothing. But that's a nitpick; I'm interested in hearing what MtGox has to say in their defense, and I'd love to see the agreement ("Exhibit A", not attached as far as I can see).
- wmf 14y ago
  Exhibit A: http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.1.1.pdf http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192... RECAP'ed docket: http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.docket.html http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192... (via BitcoinTalk https://bitcointalk.org/index.php?topic=193888.0;all https://bitcointalk.org/index.php?topic=193888.0;all )
hkmurakami 14y ago
I read the document and was quite surprised that MtGox had agreed to an exclusive agreement in the first place with Coinlab. I would have thought that MtGox would have the upper hand in negotiations since they're really the only option given their dominance as an exchange player. Do we have any insight as to why they even agreed to an exclusive agreement for US/Canada transactions?
- gkoberger 14y ago
  If I had to guess? "Oh God we're so overwhelmed..."
  - rdl 14y ago
    It wouldn't be a bad idea IFF there were rev-share. If MtGox made $x/yr for their customers now, servicing the US ones badly, selling the US market to a better-capitalized, better-operated US entity might make them more money. In a rapidly growing market like bitcoin, selling their entire future earning potential without revshare would be pretty silly, though.
    - wmf 14y ago
      It's a 60% MtGox / 40% CoinLab rev share for existing customers according to the contract. But by my reading it also says that MtGox will continue to (badly) operate the exchange, so I'm not sure what the point is. Maybe they think improved regulatory compliance is worth giving up 40%.
eli 14y ago
Gawker has an article, but you pretty much nailed it: http://gawker.com/massive-bitcoin-business-partnership-devolves-into-75-487857656 http://gawker.com/massive-bitcoin-business-partnership-devol...
ricardobeat 14y ago
Coinlab's website say the transition should be completed by May 6th[1]. Their latest update was April 10, where he mentions going to Tokyo to sort out the details[2], looks like the deal soured in the past few weeks. [1] http://coinlab.com/transition http://coinlab.com/transition [2] http://coinlab.com/status-4-10 http://coinlab.com/status-4-10
betterunix 14y ago
"EDIT: Shame the damages they're demanding are in USD rather than bitcoin :)" Are they suing in a US court? Then the damages will be stated in the currency that the court deals in, in other words, USD.
malloreon 14y ago
> EDIT: Shame the damages they're demanding are in USD rather than bitcoin :) I'm guessing their lawyers prefer to be paid in real money and not internet funbux.
- camus 14y ago
  man you made my day ;)
loceng 14y ago
Proving $75 million in damages is going to be pretty hard IMHO, especially since, at least in Canada, you have to show you tried to limit those damages immediately upon finding out there was a breech. This will be an expensive legal battle anyway.

carbocation 14y ago

> This was a massive announcement; news of it alone caused a 40% increase in the value of bitcoins. Either that, or it was announced as one of the bubbles was frothing. But that's a nitpick; I'm interested in hearing what MtGox has to say in their defense, and I'd love to see the agreement ("Exhibit A", not attached as far as I can see).

wmf 14y ago
Exhibit A: http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.1.1.pdf http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192... RECAP'ed docket: http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192566/gov.uscourts.wawd.192566.docket.html http://ia601700.us.archive.org/8/items/gov.uscourts.wawd.192... (via BitcoinTalk https://bitcointalk.org/index.php?topic=193888.0;all https://bitcointalk.org/index.php?topic=193888.0;all )

hkmurakami 14y ago

I read the document and was quite surprised that MtGox had agreed to an exclusive agreement in the first place with Coinlab. I would have thought that MtGox would have the upper hand in negotiations since they're really the only option given their dominance as an exchange player. Do we have any insight as to why they even agreed to an exclusive agreement for US/Canada transactions?

gkoberger 14y ago
If I had to guess? "Oh God we're so overwhelmed..."
- rdl 14y ago
  It wouldn't be a bad idea IFF there were rev-share. If MtGox made $x/yr for their customers now, servicing the US ones badly, selling the US market to a better-capitalized, better-operated US entity might make them more money. In a rapidly growing market like bitcoin, selling their entire future earning potential without revshare would be pretty silly, though.
  - wmf 14y ago
    It's a 60% MtGox / 40% CoinLab rev share for existing customers according to the contract. But by my reading it also says that MtGox will continue to (badly) operate the exchange, so I'm not sure what the point is. Maybe they think improved regulatory compliance is worth giving up 40%.

eli 14y ago

Gawker has an article, but you pretty much nailed it: http://gawker.com/massive-bitcoin-business-partnership-devolves-into-75-487857656 http://gawker.com/massive-bitcoin-business-partnership-devol...

ricardobeat 14y ago

Coinlab's website say the transition should be completed by May 6th[1]. Their latest update was April 10, where he mentions going to Tokyo to sort out the details[2], looks like the deal soured in the past few weeks. [1] http://coinlab.com/transition http://coinlab.com/transition [2] http://coinlab.com/status-4-10 http://coinlab.com/status-4-10

betterunix 14y ago

"EDIT: Shame the damages they're demanding are in USD rather than bitcoin :)" Are they suing in a US court? Then the damages will be stated in the currency that the court deals in, in other words, USD.

malloreon 14y ago

> EDIT: Shame the damages they're demanding are in USD rather than bitcoin :) I'm guessing their lawyers prefer to be paid in real money and not internet funbux.

camus 14y ago
man you made my day ;)

loceng 14y ago

Proving $75 million in damages is going to be pretty hard IMHO, especially since, at least in Canada, you have to show you tried to limit those damages immediately upon finding out there was a breech. This will be an expensive legal battle anyway.