Quote from: AnonyMint on February 27, 2014, 03:21:17 PM

Quote from: DeathAndTaxes on February 27, 2014, 06:21:50 AM

There is no chain of title from the depositor to the current owner of a coin. MtGox being off blockchain and pooled funds makes sure of that. You can trace a particular "coin" back to MtGox, but the trace stops there. You can't trace back further than that.

Coins get spent into Mt. Gox's pool, so there is clear chain of collective ownership of the pool.

Quote from: DeathAndTaxes on February 27, 2014, 06:21:50 AM

The depositors didn't have any "coins" directly and thus have no claim with the actual thief (if one exists).

This depends on the contact with Mt.Gox. Most banks have a clause which says that deposits are unsecured creditors and not allocated nor unallocated storage. Whereas most other vaults/accounts in the world are allocated or unallocated storage.

http://dollarvigilante.com/blog/2013/11/04/plans-in-place-for-a-us-bank-bail-in.html

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Jim Sinclair pointed out that banks legally own depositors' funds as soon as the depositors hand those funds over to the banks. The money becomes the banks and the "depositors" actually become unsecured creditors holding promises to pay. Previously the banks were obligated to pay back this loan on demand with cash. Under the new Federal Deposit Insurance Company - Bank of England (FDIC-BOE) plan revealed this year, however, these promises to pay become equity in the bank, which won't be able to be used as payments for bills, which is why most people have money in the bank in the first place.

The point is that your money is not yours while it is "deposited" with a bank.

However I assume Mt.Gox would not have many customers if there had such a fine print in their Terms of Service. The presumption is these deposits into Mt.Gox were balances for an account with an exchange.

Quote from: DeathAndTaxes on February 27, 2014, 06:21:50 AM

MtGox had its coins stolen (or embezzled). The depositors traded Bitcoins for IOUs payable by MtGox. Much like a bank there is no individual depositor's money. The bank has a liability to the depositor. If a bank is robbed it is the bank's money that is being stolen.

Mt.Gox was not a bank. Did they have a banking license to take deposits? I don't think so.

Quote from: DeathAndTaxes on February 27, 2014, 06:21:50 AM

Now in the US we have deposit insurance but even if we didn't the bank couldn't just say "sorry that was your particular $100 bill stolen is last weeks robbery). The banks funds were stolen and the liability the bank owes the depositor still exists.

Not any more! Read what I quoted above. Now the banks can give you worthless equity in the bank instead.

Quote from: DeathAndTaxes on February 27, 2014, 06:21:50 AM

Now in this case when MtGox lost their coins, they lost the ability to repay those IOUs. In the size of the theft was smaller MtGox couldn't just say "sorry that was your coins stolen" the liability (IOU) would remain and depositors could seek damages against MtGox. I know we went a long way round but while MtGox may have a claim against any coins that can be traced back to MtGox, no depositor would.

That depends on the contract Mt.Gox had with its account holders. In any case, the court can apply the demo dat rule on behalf of Mt.Gox.

A copy of the Terms of Service is available on way back archive. Looks like you made the wrong assumption:

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it will hold all monetary sums and all Bitcoins deposited by each Member in its Account, in that Member's name as registered in their Account details, and on such Member's behalf.

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Members agree that, whenever a Transaction is made, the Platform sends and receives the monetary sums and/or Bitcoins from the Buyer and the Sellers Accounts in their name and on their behalf, through the IT system in place on the Platform at the time of the Transaction.

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LIABILITY

Members represent and warrant that they are the legitimate owners and are allowed to use all monetary sums and Bitcoins deposited on their Account and that the Transactions being carried out do not infringe the rights of any third party or applicable laws. Members who are not consumers ("Business Members") will indemnify Mt. Gox for any and all damages suffered and all liability actions brought against Mt. Gox for infringement of third party rights or violation of applicable laws.

To the extent permitted by law, Mt. Gox will not be held liable for any damages, loss of profit, loss of revenue, loss of business, loss of opportunity, loss of data, indirect or consequential loss unless the loss suffered is caused by a breach of these Terms by Mt. Gox.

Mt Gox cannot be held liable for any malfunction, breakdown, delay or interruption to the internet connection, or if for any reason our site is unavailable at any time or for any period. Where our site contains links to other sites and resources provided by third parties, these links are provided for your information only. We have no control over the contents of those sites or resources, and accept no responsibility for them or for any loss or damage that may arise from your use of them.

In the case of fraud, Mt. Gox will report all necessary information, including names, addresses and all other requested information, to the relevant authorities dealing with fraud and breaches of the law. Members recognize that their account may be frozen at any time at the request of any competent authority investigating a fraud or any other illegal activity.

To the extent that a Member operates and uses the Site and the Platform other than in the course of its business ("Consumer"), nothing in these Terms shall affect the statutory rights of such Members.

Nothing in these terms excludes or limits the liability of either party for fraud, death or personal injury caused by its negligence, breach of terms implied by operation of law, or any other liability which may not by law be limited or excluded.

Subject to the foregoing, Mt. Gox's aggregate liability in respect of claims based on events arising out of or in connection with a Member's use of the Site and/or Platform, whether in contract or tort (including negligence) or otherwise, shall in no circumstances exceed the greater of either (a) the total amount held on Account for the Member making a claim less any amount of Commission that may be due and payable in respect of such Account; or (b) 125% of the amount of the Transaction(s) that are the subject of the claim less any amount of Commission that may be due and payable in respect of such Transaction(s).

Quote from: DeathAndTaxes on February 27, 2014, 06:21:50 AM

Still the application of demo dat rule is not a forgone conclusion when it comes to bitcoins. It doesn't apply to legal tender and it also doesn't apply to bearer instruments (i.e. casino chip), or negotiable instruments (i.e. a check).

Because the government needs for legal tender and checks to be fungible, as it is the government's (i.e. banksters') money and banking system. And very rich (banks) need the casinos to launder their drug money (did you forget about HSBC recently).

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Breuer told a press conference in New York that Mexican drug traffickers deposited hundreds of thousands of dollars each day in HSBC accounts. At least $881m in drug trafficking money was laundered throughout the bank's accounts.

Quote from: DeathAndTaxes on February 27, 2014, 06:21:50 AM

It is at least plausible a judge would rule that bitcoins are more like those exceptions than real property. Until we see a court case we won't know for sure. I am not a judge so what I think matters little but a bitcoin has more in common with a casino chip (a bearer instrument) then it does with a car (which is a unique specific piece of real property).

Note: to be clear I am not saying I have the answer just pointing out the law is pretty slow to react to technological changes. This and countless other questions will eventually be decided but the timescale is measured in decades.

Bullshit. It is quite clear a judge will rule that Bitcoins are property and not creditors to Mt.Gox.

At least do some research before you spout off your often wrong mouth.

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