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>Its interesting to me that typically this would be a simple "hey you filled out the forms wrong" kind of thing Why do you think that? A currency exchange is a

>Its interesting to me that typically this would be a simple "hey you filled out the forms wrong" kind of thing Why do you think that? A currency exchange is a business for grownups. Grownups with lawyers and accountants who can fill in forms correctly.

ChuckMcM 14y ago
I've got family members who work in the Justice system, my grandfather was a the US Attorney. It costs a lot of money to try and prosecute a case, the various enforcement agencies have budgets and there is incentive to not waste money on prosecutions that can be dealt with inexpensively. So when something comes up, you see if you can "resolve" it simply. So in this case the forms get updated, the Mt. Gox guys become registered as an MSB and go through the paperwork to meet the necessary standards, and if they can't they shut down. The enforcement interests of the state are served. Similarly if you are accused of violating a law the prosecutor will often offer you a plea deal of some form. This is effectively saying "Ok, let's assume I can prove all of this and your guilty and you will be fined and possibly go to prison. I'm willing to forego that lengthy process if you simply admit wrongdoing to this set of charges and accept this sentence for it." Of course sometimes the prosecutor has a different agenda and they want to "send a message" to people who might consider a similar path. This ranges from the small, police officers citing seatbelt violations, to the absurd like telling Aaron Schwartz he would spend 30 years in prison. A friend of mine who was registering his business as a consultant in Santa Clara county screwed up and put down his business as "consulate." He signed the document that said that was what he was trying to do, and not surprisingly it is illegal to represent yourself as a diplomat when you aren't one. But he didn't get a DHS agent throwing him down in the street, he got a call from the County clerk when the State Department returned the application saying essentially "wtf?" They had a laugh, he updated and amended the form and didn't serve any prison time. :-) Generally, its been my experience that "the man" isn't really out to get you. And maximizing compliance with the existing laws of the land trumps prosecuting every single violation. So skipping the first step [1] of just calling up and getting clarification seems unusual to me, given my experience with folks who prosecute people for a living. [1] This is an assumption on my part, for all I know they may have called and said "Did you really mean to say 'no' here? Looks like you should have said 'yes'." And he may said "I said 'no' and I meant it."
- dragonwriter 14y ago
  > So skipping the first step of just calling up and getting clarification seems unusual to me, given my experience with folks who prosecute people for a living. I think you are looking at it from the perspective of the crime being misrepresentation on the form. That's not the crime at issue, though. The crime at issue is actually operating the money transmitting business without the required licenses, the representation on the form that he was not operating a money transmitting business may be evidence that there was a deliberate attempt at concealment or something like that, but its not the fundamental prohibited act. Saying "yes" on the form wouldn't have made things less criminal, just more easily detected.
  - ChuckMcM 14y ago
    Actually I was trying to look at it from the perspective of the state. One of the roles of the state is to ensure compliance with the laws of the land (to implement the rule of law). The state is also interested in economic activity, and the promotion of it. So there are two outcomes: 1) Mt Gox gets shut down, its creators go to prison. State enforces the rules which is good, but also cuts out some economic growth (people lose their jobs, retail space leases get broken, etc etc) 2) Mt Gox gets brought into compliance. State enforces the rules (now they are in compliance when before they weren't) economic contribution remains intact so people still have their jobs Etc. Universally governments prefer #2 over #1, for violations involving process compliance, because #2 costs less and doesn't impact tax revenues long term. They insure future compliance with fines and/or periodic audits. All bets are off if innocent civilians are endangered or gross damage to the property occurs etc. Or, like in Enron's case, the tax payers are massively ripped off. So when Walmart creates rules that make their workers work overtime that isn't paid, the response is a fine and regular audits. Not shutting down Walmart or locking their stores where violations occurred. The whole theory of government is predicated on ensuring compliance rather than locking everyone up. The latter isn't scalable and its not the best thing for the people being governed.
    - dragonwriter 14y ago
      > The whole theory of government is predicated on ensuring compliance rather than locking everyone up. Part of ensuring compliance is ensuring that people take reasonable care to comply before being caught not complying. That involves imposing consequences for people failing to comply when they have reasonable notice from which they should have known the requirements, whether or not they actually did know.

ChuckMcM 14y ago

I've got family members who work in the Justice system, my grandfather was a the US Attorney. It costs a lot of money to try and prosecute a case, the various enforcement agencies have budgets and there is incentive to not waste money on prosecutions that can be dealt with inexpensively. So when something comes up, you see if you can "resolve" it simply. So in this case the forms get updated, the Mt. Gox guys become registered as an MSB and go through the paperwork to meet the necessary standards, and if they can't they shut down. The enforcement interests of the state are served. Similarly if you are accused of violating a law the prosecutor will often offer you a plea deal of some form. This is effectively saying "Ok, let's assume I can prove all of this and your guilty and you will be fined and possibly go to prison. I'm willing to forego that lengthy process if you simply admit wrongdoing to this set of charges and accept this sentence for it." Of course sometimes the prosecutor has a different agenda and they want to "send a message" to people who might consider a similar path. This ranges from the small, police officers citing seatbelt violations, to the absurd like telling Aaron Schwartz he would spend 30 years in prison. A friend of mine who was registering his business as a consultant in Santa Clara county screwed up and put down his business as "consulate." He signed the document that said that was what he was trying to do, and not surprisingly it is illegal to represent yourself as a diplomat when you aren't one. But he didn't get a DHS agent throwing him down in the street, he got a call from the County clerk when the State Department returned the application saying essentially "wtf?" They had a laugh, he updated and amended the form and didn't serve any prison time. :-) Generally, its been my experience that "the man" isn't really out to get you. And maximizing compliance with the existing laws of the land trumps prosecuting every single violation. So skipping the first step [1] of just calling up and getting clarification seems unusual to me, given my experience with folks who prosecute people for a living. [1] This is an assumption on my part, for all I know they may have called and said "Did you really mean to say 'no' here? Looks like you should have said 'yes'." And he may said "I said 'no' and I meant it."

dragonwriter 14y ago
> So skipping the first step of just calling up and getting clarification seems unusual to me, given my experience with folks who prosecute people for a living. I think you are looking at it from the perspective of the crime being misrepresentation on the form. That's not the crime at issue, though. The crime at issue is actually operating the money transmitting business without the required licenses, the representation on the form that he was not operating a money transmitting business may be evidence that there was a deliberate attempt at concealment or something like that, but its not the fundamental prohibited act. Saying "yes" on the form wouldn't have made things less criminal, just more easily detected.
- ChuckMcM 14y ago
  Actually I was trying to look at it from the perspective of the state. One of the roles of the state is to ensure compliance with the laws of the land (to implement the rule of law). The state is also interested in economic activity, and the promotion of it. So there are two outcomes: 1) Mt Gox gets shut down, its creators go to prison. State enforces the rules which is good, but also cuts out some economic growth (people lose their jobs, retail space leases get broken, etc etc) 2) Mt Gox gets brought into compliance. State enforces the rules (now they are in compliance when before they weren't) economic contribution remains intact so people still have their jobs Etc. Universally governments prefer #2 over #1, for violations involving process compliance, because #2 costs less and doesn't impact tax revenues long term. They insure future compliance with fines and/or periodic audits. All bets are off if innocent civilians are endangered or gross damage to the property occurs etc. Or, like in Enron's case, the tax payers are massively ripped off. So when Walmart creates rules that make their workers work overtime that isn't paid, the response is a fine and regular audits. Not shutting down Walmart or locking their stores where violations occurred. The whole theory of government is predicated on ensuring compliance rather than locking everyone up. The latter isn't scalable and its not the best thing for the people being governed.
  - dragonwriter 14y ago
    > The whole theory of government is predicated on ensuring compliance rather than locking everyone up. Part of ensuring compliance is ensuring that people take reasonable care to comply before being caught not complying. That involves imposing consequences for people failing to comply when they have reasonable notice from which they should have known the requirements, whether or not they actually did know.