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back to article Hundreds of folks ready to sue Bitcoin exchange MtGox

Over 400 people have expressed an interest in joining a class action lawsuit against Bitcoin exchange MtGox, according to a British-based law firm. Selachii has been gathering up investors stung by the collapse of the exchange and the prospect that it may have lost 750,000 of its customers' Bitcoins and 100,000 of its own, …

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Anonymous Coward

Squeezing harder still won't get blood from a stone.

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... Blood from a stone?

that it may have lost hundreds of thousands of Bitcoins "through the abuse of a bug in the Bitcoin system"

Whilst they may not have very many bitcoin left surely they can just mine some more?

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I presume the lawyers must be charging a fee to 'register' with them for the case. I guess they feel that it shouldn't just be Bitcoin that can take the unwary punters' money, that's traditionally lawyers' work!

It's not like there's any realistic chance of getting anything back.

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Re: ... Blood from a stone?

You would need some serious hardware to try and get more bitcoins and I suspect these days it will cost more in processing and power than you would get back as they get harder and harder to "mine".

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Devil

Re: ... Blood from a stone?

Captain Scarlet,

Yeah. The days of mining to get cheap Bitcoins are over. The way to do it now, is just to start up your own exchange...

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Unhappy

@Sparticus

Dammit Sparticus next you will be suggesting that these fine upstanding members of the legal profession are in fact the circling sharks who have smelled the blood from a suitable shoal of fools prepared to throw good money are just out for money from the self righteous idiots who bought into this nonsense tragically defrauded bitcoin investors.

You have to remember this is tulip mania or the south sea bubble, a get rich quick ponzi scheme a legitimate crypto-currency. I frankly can't feel sorry for these chumps feel nothing but sympathy for all the deeply wronged investors and will struggle to contain my mirth ... particularly for those who have down voted my posts suggesting that this might happen my grief at these tragic events.

Finally all I can say is as a future thought, to all you bozos, there is a lot of sense in the phrase "if it seems too good to be true ... it probably is" my thoughts go out to the those who have lost so much and their families .... I genuinely feel for you all. Just wiping a tears of mirth from my eyes.

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Re: ... Blood from a stone?

That's like saying that a bank that went bankrupt and lost the 10 kilos of gold in your safety deposit box "can surely just go mine some more".

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No it isn't.

Gold is real. It is rather difficult to mine, and somewhat dangerous to purify.

Mining VirtCoin is just having the hardware and waiting for the ones and zeros to align properly.

Nothing real, nothing difficult, just a program chugging away wasting time. The only reason people are complaining is because some (enough) have been stupid enough to think that money could actually be made out of this scheme.

Ironically, money will now be made. By lawyers.

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Re: ... Blood from a stone? @Sparticus Just over an hour ago

How could you say such a thing Sparticus? Yet another hilarious but all too apposite comment cruel slur of bitcoin. You have to understand that bitcoin is or may possibly be a FIAT currency used only by either criminals or naïve idealists where the former want money laundering facilities and the latter are too stupid to think through the risks is a pure Cypto-currency untainted by the corruption and thievery of the existing banking system.

Exchanges such as MtGox are probably run by the same sort of criminals, and naïve idiots …. In fact who in the holy name of deity thought they would get the money back? the very pinnacle of the bitcoin utopia. You would have to be totally mad very cynical to think that the these self-same bunch of criminals and losers who barely understand finance committed people involved with this ideal aren’t either laughing all the way to the bank or stunned by the shafting that they just took respectively trying to move heaven and earth to restore the losses of the investors.

Also remember that MtGox is the first with every indication the rest will be following down the pan shortly but one of the exchanges and whilst the failure a humorous indicator of the bitcoin trend and is with any luck the death knell of this techno babble an unfortunate blip . The bitcoin systems is without doubt a house of cards waiting for a puff of wind robust and hopefully not scam too many more idiots will fulfil its noble ideals.

Since seeing this article I haven’t stopped laughing have sold my, house, car, wife and two of my three children so strong Is my belief in this pure and noble cause. I should coco suckers … the great thing about currencies outside of either government control or for that matter other control is that nobody is responsible I intend to invest all of my considerable fortune yea right in restoring the bitcoin system to its rightful status.

So Sparticus final word on this one top comment entirely worthy of an up vote if for that matter I cared one way or the other … actually I do think I should get some recognition for all my down votes perhaps in future you might chose knock it on the head son, I have lost a keyboard and should probably be working to post comments that are a little less ignorant of bitcoin really I mean really are there people so stupid as to believe this nonsense …. Ah well I guess the phrase is ‘One Born … ‘ ?

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@ I a Spartacus

"It's not like there's any realistic chance of getting anything back."

Au contraire, mate. With assets of $38m and liabilities of $64m there's potentially the better part of two thirds of creditor's money still there. However, from a vulture-like lawyer's perspective, that isn't creditor's money, it's simply a big, glistening pile of $38m, from which some fat and undeserved fees will be pulled before the creditors get their even more reduced portion back. Assuming there's no preferred creditors, then the unlucky fools who have "lost" bitcoins would be better off waiting for the restructuring process to run its course (which too will cost money coming out of that suddenly shrinking $38m).

The amusing thing in this situation is that by suing MtGOX, the creditors are agreeing to underwrite their own lawyers. MtGOX or its administrators will have to be legally represented, and those costs come out of the MtGOX assets.....so by suing, the creditors agree to pay both sides of a legal dispute they started, regardless of the outcome. Smooth.

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Anonymous Coward

Re: @ I a Spartacus

Creditors != Customers that have lost BitCoins. They are owed several hundred million...

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>>"Gold is real. It is rather difficult to mine, and somewhat dangerous to purify. Mining VirtCoin is just having the hardware and waiting for the ones and zeros to align properly.

There are a finite number of possible bitcoins and the difficulty of mining them (which translates into real costs of electricity and hardware that deprecates in value) increases with time.

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Anonymous Coward

Over the hills and far away

He took your cash and ran away.

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Rule #1 of litigation: ensure that the party you are suing has the means to pay any potential settlement in your favour.

"The exchange has claimed to have 127,000 creditors and liabilities of 6.5bn ($64m), with assets of just 3.84bn ($38m)."

Fails Rule #1 then.

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Rule #1 ?

Rule #1 is make sure they have enough dosh to pay the lawyers, sod the clients

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Anonymous Coward

"Rule #1 of litigation: ensure that the party you are suing has the means to pay any potential settlement in your favour."

And/or, that the suing party has the means to pay you until you find out whether or not there is any money worth suing for.....

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Anonymous Coward

Surely if Bitcoins are

An alphanumeric data sequence, then it's an IP theft issue?

or am i missing something?

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Re: Surely if Bitcoins are

To the RIAA perhaps, but for the rest of us, IP "theft" isn't theft, but copyright infringement.

This on the other hand is an actual instance where something virtual really has been stolen - the original owners are deprived of it.

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Re: Surely if Bitcoins are

Surely if Bitcoins are ... An alphanumeric data sequence, then it's an IP theft issue? or am i missing something?

Like Mark says, IP theft should probably be copyright infringement. However, there is indeed something missing here, because fiddling the "alphanumeric data sequence" of somebody else's Visa account doesn't really fit into the "three strikes" meme - although a few people might consider a first offence warning letter to be preferable to jail time.

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Horses and Stable Doors...

* clip clop, clip clop, clip clop *

* slam *

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Pirate

Re: Horses and Stable Doors...

Horses and Stable Doors...

* clip clop, clip clop, clip clop *

* clip clop, clip clop, clip clop *

* clip clop, clip clop, clip clop *

* clip clop, clip clop, clip clop *

* clip clop, clip clop, clip clop *

Stable door hasn't closed yet

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Re: Horses and Stable Doors...

Stable door closed.

Sounds of transporter being activated.

A case of throwing good money after imaginary money.

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Rob
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Re: Horses and Stable Doors...

Using this analogy, I'd say the stolen bitcoins are already catfood.

Also can we stop referring to Bitcoins as a currency, they are not, they are a commodity. If anything they could be used to back a currency like Gold was/is but you can't suddenly print more Bitcoins when you feel like it.

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Re: Horses and Stable Doors...

Also can we stop referring to Bitcoins as a currency, they are not, they are a commodity. If anything they could be used to back a currency like Gold was/is but you can't suddenly print more Bitcoins when you feel like it.

I thought forgery was a crime.

Oh, but of course, the government minting the currency makes the laws, and exempts itself from that one.

What a definition: it can only be a currency if it can be debased!

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Rob
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Re: Horses and Stable Doors...

And it's for that reason that Governments probably haven't rushed to regulate it.

Yes it is scary. I think we have evolved the phrase "you are only 1 pay cheque away from living on the streets" to "you are only one financial market away from being a 3rd world country"

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Anonymous Coward

I view bitcoin exchanges like any high street store voucher or a xmas savings fund. Your money is sitting in someone's database and if the company folds you've lost your cash.

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Precisely why governments introduced regulation of traditional banks - without some form of backed security, who would use them.

The naive and the criminals is the answer.

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Legal standing?

How do they expect to sue a Japanese company (one that is under bankruptcy protection even) in a UK court? I can't see how they expect the court to have any standing in the matter.

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Re: Legal standing?

I think you're missing the real story. Legal firm blogs about current news story, accrues adwords dollars/publicity, issues press release, Reg gets a free click bait story, IT works offset small amount of working day ennui by commenting. Everybody wins.

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GBE

Re: Legal standing?

Courts don't "have standing".

Plaintiffs are the ones who must have standing.

Courts have jurisdiction (or not).

http://en.wikipedia.org/wiki/Standing_%28law%29

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Def
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I bet most of the bitcoins stolen were purchased or mined for a fraction of their value today. So handing out a few fivers is probably far closer to the actual loss anyone incurred.

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Total nonsense. If you nick £100,000 worth of precious family heirlooms from me, have I not actually lost anything just because I inherited them for free?

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You have because they were actual, real objects that are now in someone else's possession.

These VirtCoins may be unique strings of bits (for a given value of unique), but their value is less than the hard drive platters they are stored on (much less).

Besides, if you had a hundred grand of family heirlooms worth nicking, you should also have insurance on them and a valid basis for judicial action.

Oh, and if you haven't paid Inheritance Tax on that then Her Majesty's Revenue Service would like a word with you . . .

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Def
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Well, if you valued those family jewels at £100,000, hopefully that is what you would have insured them for. Similarly banks have insurance policies covering customer's assets and holdings.

How much insurance does MTGOX, or any other bitcoin exchange, or any bitcoin holder possess as of today? I bet the answer is close to zero. Why? Because as of right now, regardless of what people are willing to pay for them, bitcoin's perceived value in the real world is close to zero.

Try getting an insurance company to insure your bitcoins against theft. I'd love to be proven wrong, but I suspect you'll be told it's not possible because they're not worth anything. Or if you do get an insurance policy, it'll be a fraction of what their perceived value currently is.

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@Pascal M

"These VirtCoins may be unique strings of bits (for a given value of unique), but their value is less than the hard drive platters they are stored on (much less)."

Cobblers. The value of something is what somebody is prepared to pay for it. That's what makes the world go round (Physicists: This was not an invitation to get technical). So the bitcoins were worth whatever the going rate is, which was about $650 a pop a moment ago.

Your argument is like saying that the tenner in my pocket is only worth about 0.01p because that's the value of the paper upon which it is printed.

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Re: @Pascal M

A4 office paper is worth about 1p per sheet. The paper in banknotes is special quality, so is probably worth 1p,, not 0.01p.

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Anonymous Coward

"These VirtCoins may be unique strings of bits"

Much like how your bank balance is stored then...

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Vic
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> I suspect you'll be told it's not possible because they're not worth anything

It's possible to insuire anything. You just might not like the premium.

I'll make an offer right here, right now - I'll insure any Bitcoin holding. You can even calculate the annual premium yourself - just multiply the value by three...

Vic.

N.B. No, I don't do instalments.

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@ Vic

They'd probably be better off talking to a Lloyd's broker.

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Anonymous Coward

Anonymous

Don't know too much about bitcoins buying/selling...

Aren't the holders of such bitcoins anonymous? How can they sue and prove the bitcoins were theirs?

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Re: Anonymous

They didn't own real Bitcoins, they owned paper Bitcoins, ie MT Gox owed them money denominated in Bitcoin.

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Re: Anonymous

I've also been wondering about this. How can anyone prove that MtGox had anything of theirs? It may be feasbale to prove that as some point they transferred money to MtGox but what after that? They could have spent them, traded them or whatever. The only way to prove their balance would be to get MtGox to confirm it. I doubt that's going to happen. Probably been shredding all the evidence for more than a month now.

I see MtGox is admitting to £64 million liabilites, while people are talking about them losing £400+ million worth of Bitcoins. Seems to be a massive divergence already.

And why is it they are being sued everywhere EXCEPT Japan?

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Lawsuit settled

The owners should agree to settle the lawsuit by paying the people suing them in a new secure crypto currency called MuppetCoins. Here's your pay off in MuppetCoins now pick the bones out of this -

63211C8F5E0BF07DA1ADF4A4738D62D2E875E5BD777D2E05B1AF73382BCF9C3B

84C39F39F668E984229ED5FE2BC70BA08AC3CCE8625D0D2229FF8065AEF0AC7F

575C5DB58D73F0C1C0B99B558E49606115E68A810277B930299F6AB644696F9C

Don't forget to store them in the online exchange that has the best looking website, but more backdoors than B&Q....

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Re: Lawsuit settled

Beat me to it.

"Hello, you lost our strings of random numbers. We'd like to sue."

"Alright, you can have your strings of random numbers. Here's some we just got some interns to type out."

"Those aren't PROPER random numbers. We want Bitcoin random numbers that we can use as currency."

"But you keep telling us that if two people are willing to treat strings of random numbers as currency, it's a currency. Even though the currency is not backed by a central bank and not accepted by any government for payment of taxes. So: To us these strings of random numbers are acceptable as currency, and if they aren't to you, well that's basically your problem."

"Er..."

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Anonymous Coward

Sue for what exactly?

In both senses of the phrase.

If they win what will they get? Nothing, because no one involved with this had any kind of cash to start with, and whatever they did have is now gone.

An what for in the sense of what offense? I'm sure MtGox offered no assurances that they were a financial institution or that anything given to them was safe/secure/kept to any sort of standard.

The people lost their money the instant they turned it into bitcoin, all that was stolen from/by MtGox were strings of numbers that both parties thought were actually worth something in a real, tangible sense.

They've lost the numbers that allow them to convert a bitcoin back into real money...no real money was stolen.

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Newsflash commentard - replace "strings of numbers" with "pieces of paper" and you describe any modern currency. Therefore your argument has no real meaning.

In the sense that people were willing to exchange their own currency for bitcoins then it is a currency. More so given that its possible to directly pay for goods and services using bitcoins.

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The people lost their money the instant they turned it into bitcoin

No, they converted one currency into another. Bitcoins are still out there and still have an exchange value. Less than it once was ... but currency fluctuations are nothing new. One pound sterling was once worth exactly the same as one gold sovereign. Until a day came, when the UK went off the gold standard.

Their real mistake was allowing MtGOX to look after their bitcoins, rather than holding them in their own digital wallets. Someone broke into the bank and stole their gold, sorry, bitcoins. Now someone else has all the bitcoins, which are worth a fair bit to the thief even at today's exchange rate. MtGOX is doubtless legally liable, but I don't suppose it's got enough assets left to make it worth suing.

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Anonymous Coward

"In the sense that people were willing to exchange their own currency for bitcoins then it is a currency. More so given that its possible to directly pay for goods and services using bitcoins."

Just because some people accept them doesn't mean that it is a currency. It's a way of paying for a small number of goods, yes, but as it is not widely accepted, by definition it is not a currency.

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The big difference being generally one or more governments are willing to back a currency. Who will back bitcoin? It's not a currency just because some people will buy it hoping to sell high.

The thing about bitcoin is that for all the talk, it's not really being used as a currency. A currency is for purchasing goods and services (and paying taxes). Ok so theoretically you can buy things with it from an incredibly small selection of vendors. (You would have had a bit more, but not much, opportunity in the recreational pharmaceuticals market until recently, but 99.9999999999% of that still uses traditional money). Mostly, bitcoin is about get rich quick. Either through turning electricity into money through "mining" (pretty much unviable now) or through buying low and selling high. It really is just a big Ponzi scheme.

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Re: replace "strings of numbers" with "pieces of paper" and you describe any modern currency

Try saying that to the barrels of the SWAT team when you nick a sack of banknotes (paper).

BitCoin is a currency the same way bottles of Vodka are a currency : there are rare places that accept to deal with them.

The places accepting bottles of vodka also accept dollars, like everywhere else in the world.

So the difference between any VirtCoin and dollars is that if you steal 400 million dollars, you can be 100% certain that there is someone, somewhere, who's sole mission is to capture you - alive or dead won't really matter - whereas if you steal 400 million VTC, you'll get a lawsuit from another country.

Now tell me which currency is more real than the other again ?

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