

Feds seized $2.9M from Mt. Gox, court docs show - bdb
http://gigaom.com/2013/08/19/feds-seized-2-9m-in-bitcoin-funds-from-mt-gox-court-docs-show/

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dwaltrip
Misleading title, USD funds were frozen, not actual bitcoins.

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CoreSet
Doesn't the technical architecture of the Bitcoin system make the seizure of
actual Bitcoins by a third-party impossible or at least very difficult?

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dwaltrip
Yeah definitely more difficult, but it depends on the storage mechanism. But I
suppose even if you simply had a private key hidden in some random folder or
written down somewhere (there are more secure ways - one is breaking a key
into multiple parts and spreading to separate people), it would be hard to
locate or identify.

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synchronise
It also depends on what possible legal action those parties might have taken
against them for not complying with a disclosure request on those funds.

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CoreSet
So basically: "we can't find your money so you're going to jail unless you
find it for us?"

I was talking to a friend about encryption the other day and that was his
salient point. Unbreakable key? Break it or go to jail.

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qq66
"Break it or go to jail" is already established law that pre-dates computers
("open this combination safe or go to jail"), but courts have generally held
that this law also applies to encryption keys.

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derekp7
And if the contents of the safe are written in code, or some made up language
that the courts don't understand, can they compel you to translate them?

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qq66
Yes, they can. This has also been true for hundreds of years.

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runeks
It appears Mt. Gox CEO Mark Karpeles (MagicalTux on #mtgox) declines to
comment:
[http://www.reddit.com/r/Bitcoin/comments/1kp4uf/gigaom_repor...](http://www.reddit.com/r/Bitcoin/comments/1kp4uf/gigaom_reporting_that_feds_seized_29million_from/cbr88ch)

    
    
      (6:39:17 PM) *Blitzboom*: http://gigaom.com/2013/08/19/feds-seized-2-9m-in-bitcoin-funds-from-mt-gox-court-docs-show/  
      (6:39:59 PM) *Blitzboom*: MagicalTux: good thing we hear this from the media, and not you guys  
      (6:40:13 PM) *Blitzboom*: now everybody is going to be very calm about this i'm sure  
      (6:41:55 PM) *Blitzboom*: though i'm sure mtgox has at least 29k BTC even if it didn't have the cash  
      (6:42:01 PM) *AnonX*: god  
      (6:42:56 PM) *AnonX*: Reminds me of when the DOJ cracked down on online poker  
      (6:45:36 PM) *Blitzboom*: MagicalTux: can we hear something substantial now on this?  
      (6:45:40 PM) *Blitzboom*: cat's out of the bag  
      (6:45:43 PM) *Blitzboom*: do you have the money or no  
      (6:46:43 PM) *Blitzboom*: i mean, if you said you have 90% of the money you owe, then even that would be an improvement to the current spread if it's to be believed  
      (6:46:51 PM) *Blitzboom*: that would be only 10% spread  
      (6:46:55 PM) *MagicalTux*: Blitzboom: we cannot comment on this  
      (6:47:10 PM) *Blitzboom*: you can't comment on whether or not you are solvent?  
      (6:47:21 PM) *MagicalTux*: We can't comment on the legal actions in the US  
      (6:47:28 PM) *dust-otc*: MagicalTux: as in, compelled by the government not to comment, or advised by your own lawyers not to comment?  
      (6:47:32 PM) *Blitzboom*: can you comment on your solvency?  
      (6:47:53 PM) *dust-otc*: Blitzboom: Roger Ver can comment on solvency, apparently  
      (6:47:53 PM) *Blitzboom*: can you pay out the people you owe?  
      (6:47:54 PM) *MagicalTux*: I could comment on the fact that our income since April is around 8 million USD  
      (6:48:14 PM) *MagicalTux*: (anyone seeing trading volume can compute that one)  
      (6:48:31 PM) *Blitzboom*: all i'm asking is, do you have the money to pay everyone's balance?  
      (6:48:38 PM) *dust-otc*: MagicalTux: no, they could estimate your revenue, not income  
      (6:49:02 PM) *MagicalTux*: dust-otc: our transparency reports show the costs of running mtgox, and it hasn't changed much

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mrb
They seized these $2.9M months ago, but this re-hashing of the news is causing
a run on the money: people are frantically buying bitcoins on MtGox to
transfer them out of MtGox (since dollars withdrawals have been somewhat
delayed and generally very slow to execute). This is pushing the exchange rate
to 120 USD at MtGox, instead of ~100 USD as seen on other exchanges.

[http://bitcoincharts.com/markets/](http://bitcoincharts.com/markets/)

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Centigonal
Doesn't that mean that there's some crazy arbitrage potential right now for
cycling BTC through exchanges?

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mrb
There is a crazy opportunity. But it comes with risk. Risk that it may take
months for you to eventually withdraw the dollars from MtGox to your bank
account (wire transfers are executed at a glacial pace as reported by users).
By that time, who knows what the BTC exchange rate will be. It may not be
possible anymore to then buy BTC at $100 on other exchanges.

The last withdrawal I executed from MtGox (1000 EUR in April) took 3 months to
be done (saw the money hit my bank account in July). MtGox was apologetic in
support ticket I filed, but did not explain why it took so long other than
they had "issues".

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kalleboo
> MtGox was apologetic in support ticket I filed, but did not explain why it
> took so long other than they had "issues".

Elsewhere MtGox employees have explained that their bank has limited them to
10 international wire transfers per day due to capacity issues - they claim at
one point they were responsible for 50% of the international wire transfers of
their bank, the second largest in Japan. Apparently international wire
transfers aren't very popular in Japans o they're all processed manually,
which doesn't scale to what MtGox are doing.

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create_account
Since when is Union Square been renamed "Satoshi Square"?

