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back to article MtGox gets its sorry assets frozen amid US class-action lawsuit

Embattled Bitcoin exchange MtGox has experienced a setback in its efforts to gain bankruptcy protections in the US, their opponents' legal team tells us, as the company has been hit with a temporary restraining order freezing its assets. The order, attorney Christopher Dore of Edelson PC tells The Reg, was obtained by plaintiffs …

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The only "winners" are:

Wait for it: THE LAWYERS. The sorry peons and druggies who put their moola into MtGox might see a fraction of their deposit, but you can bet big bux that the lawyers will be the ones that will get fat over this and many other sue-balls.

You heard it here folks. When this finally gets resolved, link back to this and confirm it happening!

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I did try to warn you.

<hooting laugh>Janet Yellin </hooting laugh>

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So... how did they freeze the bitcoins? (assuming MT Gox still has any)

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Anonymous Coward

They didn't

or can't, or would be very had.

Something thats designed to be anonymous, and un-traceable.

The court wants to say "those things, they are now frozen and cannot move"

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They can still freeze the rest of the assets - remember that exchanges don't just hold Bitcoin, but also currency like USD. Indeed, the class action that I read about stated they would only be suing for lost USD, due to the increased likelihood of success in court.

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Anonymous Coward

That's the "freedom" of BitCoin and why the criminals love it.

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Re: They didn't

Yes they did. Since the relevant coins are in the "Mt Gox" Bitcoin wallet, and Mt Gox is enjoined from transferring them they are effectively frozen.

It might piss people off, but this really is the best route out. Mt Gox were acting quite a bit more like a bank than a retail business, and when a bank goes belly up the first people who need to be protected are the depositors. The only way to protect the depositors is to freeze the assets, do a thorough forensic analysis of the accounts, and then proceed with the bankruptcy.

Frankly, if they find practices as shoddy as I expect they are going to find, Mt Gox should not be permitted to reopen and none of its Cxxs should ever be allowed to sit as corporate executives again.

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Holmes

Time to start talking truthfully about these scammers

"Hundreds of millions", my ass.

They'll be lucky to ever see pennies on the dollar. El Reg should stop talking about this sham outfit as if it had any real assets. It's a pyramid scheme, plain as day, nothing more. And the party's over.

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Anonymous Coward

Help! I've been Goxed!!

Bitcoins real value: Entertainment!

Pass the popcorn.

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Anonymous Coward

Re: Help! I've been Goxed!!

You unsympathetic bar steward. MtGox had over 2300 of my "Magic: The Gathering" cards in storage, and it's unlikely I'll ever see them again!! :'-(

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This almost sounds like...

... a couple of 8 year olds playing Monopoly and arguing about the Monopoly Money. Except someone (or a whole lot of someones) spent real money buying virtual (or imaginary) money. Yeah... I'm a tad cynical that anymore money is just 1's and 0's on some bank's computer also.

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Re: anymore money is just 1's and 0's on some bank's computer also

That is true, technically speaking.

And the recent washout the banks are responsible for doesn't help keep ideas straight on the matter either.

But in the end, there is one big difference : the 1s and 0s that define your bank account are managed by an institution that has two legal requirements - a) to manage your account with full accounting transparency and accountability and b) to grant you all access to your money unless a court says otherwise.

So the major difference between the bits managed by a bank and the bits (mis)managed by Gox is that you do have legal recourse against a bank and the bank is legally obliged to justify itself if it "loses" your money, whereas Gox is legally liable for not much and, not being a bank, doesn't have the same accountability requirement.

Plus there's the fact that the bits managed by your bank have a source that is way more based in reality than the ones "mined" by a graphics card.

So please do not give in to the Matrix conspiracy theorists that are foaming at the mouth around this issue. The failure of Gox has nothing to do with banks. Gox failed purely on grounds of incompetence and ignorance.

Banks, on the other hand, knew full what they were getting into, and were just playing the field until the other shoe dropped. Their only problem is that it dropped a bit too soon compared to their weekly forecasts.

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Re: anymore money is just 1's and 0's on some bank's computer also

Similar with Paypal. Keeping significant amounts of money on an exchange is as dumb as doing so with Paypal - though I fear there are a lot more people doing the latter.

"Plus there's the fact that the bits managed by your bank have a source that is way more based in reality than the ones "mined" by a graphics card."

This doesn't make sense, bits are as real as any other, and I'm not sure how one defines a "source". In Bitcoin, the bits represent a private key. The original source of bitcoins in the network are being "mined", but I don't see how printing paper is more "based in reality"... (Well, one is purely virtual, but if you dismiss that, obviously you're not going to be interested in any purely virtual currency.)

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Re: This almost sounds like...

But the value of Bitcoin isn't decided by what's printed on the paper like Monopoly money (perhaps you were confusing it with fiat currencies...), but based on the market value.

If something has market value, I don't see why that means it's not "real", or is "imaginery", nor why this makes them like 8 year olds. Whilst the concept of Bitcoin has yet to be tested in court, the idea of things having a market value most certainly has - even if something isn't a currency, for laws like theft, fraud etc, courts can still look at the market value.

Indeed, if someone stole your Monopoly money, they'd still be guilty of theft - try doing it from your local shop, and see if they won't call the police because you cry that it's not "real money". It's still real theft.

(You also ignore that exchanges store "real money" too, which I believe people are suing over.)

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Anonymous Coward

Re: anymore money is just 1's and 0's on some bank's computer also

PayPal isn't a bank and neither are these bitcoin exchanges.

So why people expect legal protection I dunno.

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Re: Gox is legally liable for not much

If Gox were a retail store that would be true. But if I understand correctly they were licensed as an exchange and therefore have more legal obligations than a retail outfit would. Not quite to the level of a bank, but still high enough. The trick is going to be the morass that their records most likely are.

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FAIL

What Assets?

Presumably this only applied to MT Gox' US based assets? How much did they have in the US or on US based servers?

I suspect the answer is rather close to zero, a fact that will be carefully avoid being stated so that the Lawyers can milk their clients for as long as possible.

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Facepalm

Presumably this court order means that no-one is allowed to steal further BitCoins...

Horse and stable door comes to mind here.

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