No. If a company let you store world of warcraft cold and took some of that gold they'd go out of business, but it wouldn't likely have straight forward legal ramifications unless their terms of service had very clear expectations of what "holding" your gold meant.
Further, in many digital assets like world of warcraft technically the creating company (Blizzard) still owns the asset regardless of what you do with it or where it goes.
If you are storing currency, that is legally defined as currency by your legal jurisdiction (usually the state level) then there are very specific rules for money transmission and money service business licensed businesses. And your accounts are insured upto the legal required amount of $100,000 by the FDIC.
However, many states have NOT classified cryptocurrency as a currency nor required exchanges and services operating solely in cryptocurrency to get a license as a financial service (different if it allows exchanging of crypto and traditional currency). Because of this it is unclear what the legal doctrine is that would apply to it.
Now if I had as you said "a jesus shaped collectable potato chip" in storage that belonged to you, can I sell it? That depends. For example, for a storage facility if your payments are late I certainly can. For plenty of digital assets accounts your funds are taken by the company after X days of inactivity. Then you have services like PayPal which terms of service allows them to freeze your accounts and keep the funds for anything that violates their terms of service (rules designed by them, which you agree to on sign up).
So was Dogetipbot in the legal clear for doing this? Probably not. There is some level of negligence, some level of consumer loss and can probably be a tort case. But was it flat out illegal? No. It was at worst a civil case, but that depends on their terms of service and the legal standing of cryptocurrency in various jurisdictions.
> If you are storing currency, that is legally defined as currency by your legal jurisdiction (usually the state level) then there are very specific rules for money transmission and money service business licensed businesses. And your accounts are insured upto the legal required amount of $100,000 by the FDIC.
Wrong. If you have money stored in a bank that is insured by the FDIC (and pays depositor's insurance), then you are insured.
If you have a cash deposit with a brokerage that is not FDIC insured, and their CEO spends customer's money (that they are not allowed to), and go bankrupt, you are absolutely not insured by the FDIC, and will have to go to court to try to reclaim assets. This happened, see MF Global. In that case, the CEO (Jon Corzine) was very well connected and was able to sidestep prosecution and jail time.
I'm going to bet that this clown is not well connected. Fortunately for him, all he embezzled was this bullshit toy currency, so hopefully, for him, its so irrelevant that he gets away unscathed.
Further, in many digital assets like world of warcraft technically the creating company (Blizzard) still owns the asset regardless of what you do with it or where it goes.
If you are storing currency, that is legally defined as currency by your legal jurisdiction (usually the state level) then there are very specific rules for money transmission and money service business licensed businesses. And your accounts are insured upto the legal required amount of $100,000 by the FDIC.
However, many states have NOT classified cryptocurrency as a currency nor required exchanges and services operating solely in cryptocurrency to get a license as a financial service (different if it allows exchanging of crypto and traditional currency). Because of this it is unclear what the legal doctrine is that would apply to it.
Now if I had as you said "a jesus shaped collectable potato chip" in storage that belonged to you, can I sell it? That depends. For example, for a storage facility if your payments are late I certainly can. For plenty of digital assets accounts your funds are taken by the company after X days of inactivity. Then you have services like PayPal which terms of service allows them to freeze your accounts and keep the funds for anything that violates their terms of service (rules designed by them, which you agree to on sign up).
So was Dogetipbot in the legal clear for doing this? Probably not. There is some level of negligence, some level of consumer loss and can probably be a tort case. But was it flat out illegal? No. It was at worst a civil case, but that depends on their terms of service and the legal standing of cryptocurrency in various jurisdictions.
Disclaimer: Not a lawyer, not legal advice.