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Mt. Gox Receives Subpoena From Federal Prosecutor: Source

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Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#61

Post by wpietri »

thirsteh wrote: post #45
ubernostrum wrote: post #29

Earlier quoted context omitted.

But I do not understand how a NY prosecutor can subpoena a Japanese business? If you offer services to, or engage in financial transactions with, a person in Jurisdiction A, Jurisdiction A can enforce its laws on you. You should not in any way be surprised by this fact.

That's all well and good, but Mt. Gox likely won't conduct any more business in NY. It gets even more problematic if they don't actually operate any legal entity in the U.S. The U.S. may enforce its laws upon U.S. entities, but it has no authority to do so on e.g. a Japanese one, unless a treaty/agreement exists that facilitates it. This is why China-only companies that engage in IP theft (or vice versa) aren't being…

The US can enforce it laws on anybody it can get its hands on. For example Joaquin Guzman, the drug kingpin recently captured in Mexico faces charges in a variety of US states, even if he never set foot there. [1]

Mexico has to agree to hand him over, but once the US has him, they can happily convict him of crimes committed while he wasn't physically present in the US.

[1] http://www.npr.org/2014/02/25/282359473/arrest-of-el-chapo-n...

Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#62

Post by thirsteh »

wpietri wrote: post #61
thirsteh wrote: post #45

Earlier quoted context omitted.

That's all well and good, but Mt. Gox likely won't conduct any more business in NY. It gets even more problematic if they don't actually operate any legal entity in the U.S. The U.S. may enforce its laws upon U.S. entities, but it has no authority to do so on e.g. a Japanese one, unless a treaty/agreement exists that facilitates it. This is why China-only companies that engage in IP theft (or vice versa) aren't being…

The US can enforce it laws on anybody it can get its hands on. For example Joaquin Guzman, the drug kingpin recently captured in Mexico faces charges in a variety of US states, even if he never set foot there. [1] Mexico has to agree to hand him over, but once the US has him, they can happily convict him of crimes committed while he wasn't physically present in the US. [1] http://www.npr.org/2014/02/25/282359473/arre…

Oh, sure, but it's contingent on him being in the U.S. (Same for a company.) It is Mexico's decision to "extradite" him.

Similarly, Brazil could convict me of whatever it wanted if I went there. Then it just becomes a diplomatic issue.

Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#63

Post by jacalata »

appleflaxen wrote: post #43

Where were these zealous prosecutors during the global financial meltdown in 2008? It would be nice if people went to jail for fraudelently representing mortgages. I'm fine with Gox getting investigated, too, but justice shouldn't depend on who you are.

Have you not heard the phrase "too big to fail?" Unfortunately for mt gox, nobody with power relies on it continuing to exist, but they do rely on the continuing existence of a banking system in the US.

Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#64

Post by downandout »

tzs wrote: post #57
downandout wrote: post #46

Bitcoin as a concept would be attacked by governments under even the best of circumstances. I don't know why the major players in it have to be so dumb and/or unscrupulous as to draw this level of negative attention to it. As for Mt. Gox itself, its principle(s) will be aggressively prosecuted and sentenced. The New York US attorney behind the subpoena is Preet Bharara. Preet is responsible for shutting down online p…

What do you find dubious about the insider trading conviction and sentence?

I find his accomplishments dubious because a) I believe that there are substantially more effective ways to deter crime and punish offenders than the lengthy prison sentences that his office pushes for in most cases, and b) he uses every major case he brings elected office, and is unnecessarily destroying many lives in that pursuit. In my opinion, that negates any positive things he may have done and renders all of his accomplishments dubious.

Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#65

Post by sheetjs »

downandout wrote: post #64
tzs wrote: post #57

Earlier quoted context omitted.

What do you find dubious about the insider trading conviction and sentence?

I find his accomplishments dubious because a) I believe that there are substantially more effective ways to deter crime and punish offenders than the lengthy prison sentences that his office pushes for in most cases, and b) he uses every major case he brings elected office, and is unnecessarily destroying many lives in that pursuit. In my opinion, that negates any positive things he may have done and renders all of h…

> I believe that there are substantially more effective ways to deter crime and punish offenders than the lengthy prison sentences that his office pushes for in most cases

... like fines? The fines we end up seeing are paltry compared to the profits of the activity, effectively incentivizing illicit practices

Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#66

Post by mschuster91 »

thinkcomp wrote: post #49

I'm not a lawyer, but what's likely to happen here is the following: Soon, Mark Karpeles and/or Tibanne Kabushiki Kaisha and/or Mutum Sigillum LLC are likely to be charged with at least one violation of 18 U.S.C. § 1960 for not having a money transmission license in any state. Even though Karpeles broke state laws, it's a federal crime by extension. He may be extradited from wherever he is to the U.S. to stand trial…

MtGox has a FinCEN MSB license (http://bitcoinmagazine.com/5560/mtgox-gets-fincen-msb-licens...).

Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#67

Post by thinkcomp »

mschuster91 wrote: post #66
thinkcomp wrote: post #49

I'm not a lawyer, but what's likely to happen here is the following: Soon, Mark Karpeles and/or Tibanne Kabushiki Kaisha and/or Mutum Sigillum LLC are likely to be charged with at least one violation of 18 U.S.C. § 1960 for not having a money transmission license in any state. Even though Karpeles broke state laws, it's a federal crime by extension. He may be extradited from wherever he is to the U.S. to stand trial…

MtGox has a FinCEN MSB license ( http://bitcoinmagazine.com/5560/mtgox-gets-fincen-msb-licens... ).

There's no such thing. FinCEN does not issue licenses, it just processes MSB registrations. The Bank Secrecy Act (BSA) requires FinCEN registration and SAR report filing; 18 U.S.C. § 1960 requires state licenses. The fact that Mt. Gox knew it had to comply with BSA requirements means that it should have also been aware that it needed state licenses.

Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#68

Post by mattm »

rwallace wrote: post #60
captainchaos wrote: post #48

Ok, at the risk of sounding completely naive... I've been following this story for a while, and it seems that no one can say for sure if this is embezzlement or gross incompetence. Based on leaked memos it seems to be most people are learning towards the latter, but I'm curious if there's any evidence either way. Based on the claimed transparency of Bitcoin, I would have expected embezzlement on this scale to have be…

My gut feeling, speaking as an outsider reading the news, is Karpeles was never dishonest, just hopelessly out of his depth and too stubborn to ask for help. In the normal course of events I also would expect money disappearing over that long a timescale to have to have been embezzlement by an employee, and I would certainly consider that a plausible hypothesis here. On the other hand, reading the IRC chat transcript…

I've spent way too much time following this and I agree with your thoughts as well. Karpeles seems to personify the phrase we know in software development - that he knows just enough to be dangerous but not enough to be competent.

I was stunned at this blog post (http://antonopoulos.com/2014/02/25/statement-on-mt-gox/) where Andreas Antonopolous said:

"During this time, Mark Karpeles was active on the forums and developer boards and appeared to be implementing fixes to Gox software to address Tx-Mal."

He really should not have been looking for solutions himself.

Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#69

Post by exit »

euank wrote: post #34
exit wrote: post #20

Earlier quoted context omitted.

have you seen the irc chat log with Mark Karpeles? it almost seems possible that that is exactly what has happened: [12:02] How much did you lose yourself? [12:04] Well, technically speaking it's not "lost" just yet, just temporarily unavailable [12:05] Well, how much is unavail for you? [12:06] I'm not even sure http://www.wickedfire.com/shooting-shit/179038-my-conversati...

If you read the context, it's quite clear that he's only referencing his own bitcoins. [12:02] How much did you lose yourself? [12:04] Well, technically speaking it's not "lost" just yet, just temporarily unavailable [12:05] Well, how much is unavail for you? [12:06] I'm not even sure [12:06] didn't check my wallet before pushing the site offline That final line makes it very clear that he meant he didn't know how ma…

i don't follow your reasoning. the final line tells us that he doesn't know how many btc he personally was credited with in the mtgox wallet.

what he says before that tells us that

a.) his btc are in the same "situation" as those of regular mtgox users,

b.) he believes his btc and thus everyone else's are "just temporarily unavailable"

Re: Mt. Gox Receives Subpoena From Federal Prosecutor: Source

#70

Post by mattm »

thinkcomp wrote: post #49

I'm not a lawyer, but what's likely to happen here is the following: Soon, Mark Karpeles and/or Tibanne Kabushiki Kaisha and/or Mutum Sigillum LLC are likely to be charged with at least one violation of 18 U.S.C. § 1960 for not having a money transmission license in any state. Even though Karpeles broke state laws, it's a federal crime by extension. He may be extradited from wherever he is to the U.S. to stand trial…

Mt. Gox is in Japan because Mark Karpeles moved to Japan well before Mt. Gox started up. Here is his blog - http://blog.magicaltux.net
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