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back to article Hundreds of folks ready to sue Bitcoin exchange MtGox

Over 400 people have expressed an interest in joining a class action lawsuit against Bitcoin exchange MtGox, according to a British-based law firm. Selachii has been gathering up investors stung by the collapse of the exchange and the prospect that it may have lost 750,000 of its customers' Bitcoins and 100,000 of its own, …

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      1. Jugernautilus
        Reply Icon

        The big difference being generally one or more governments are willing to back a currency. Who will back bitcoin? It's not a currency just because some people will buy it hoping to sell high.

        The thing about bitcoin is that for all the talk, it's not really being used as a currency. A currency is for purchasing goods and services (and paying taxes). Ok so theoretically you can buy things with it from an incredibly small selection of vendors. (You would have had a bit more, but not much, opportunity in the recreational pharmaceuticals market until recently, but 99.9999999999% of that still uses traditional money). Mostly, bitcoin is about get rich quick. Either through turning electricity into money through "mining" (pretty much unviable now) or through buying low and selling high. It really is just a big Ponzi scheme.

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      2. Pascal Monett Silver badge
        Reply Icon

        Re: replace "strings of numbers" with "pieces of paper" and you describe any modern currency

        Try saying that to the barrels of the SWAT team when you nick a sack of banknotes (paper).

        BitCoin is a currency the same way bottles of Vodka are a currency : there are rare places that accept to deal with them.

        The places accepting bottles of vodka also accept dollars, like everywhere else in the world.

        So the difference between any VirtCoin and dollars is that if you steal 400 million dollars, you can be 100% certain that there is someone, somewhere, who's sole mission is to capture you - alive or dead won't really matter - whereas if you steal 400 million VTC, you'll get a lawsuit from another country.

        Now tell me which currency is more real than the other again ?

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    2. Nigel 11
      Reply Icon

      The people lost their money the instant they turned it into bitcoin

      No, they converted one currency into another. Bitcoins are still out there and still have an exchange value. Less than it once was ... but currency fluctuations are nothing new. One pound sterling was once worth exactly the same as one gold sovereign. Until a day came, when the UK went off the gold standard.

      Their real mistake was allowing MtGOX to look after their bitcoins, rather than holding them in their own digital wallets. Someone broke into the bank and stole their gold, sorry, bitcoins. Now someone else has all the bitcoins, which are worth a fair bit to the thief even at today's exchange rate. MtGOX is doubtless legally liable, but I don't suppose it's got enough assets left to make it worth suing.

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      1. GBE
        Reply Icon

        Stolen or just irretrevable?

        "Now someone else has all the bitcoins,"

        Personally, I doubt that.

        I think it far more likey that through some sort of system (including human) failure, Mt.GOX lost the private keys to their cold storage. That means all those missing bitcoins are still "owned" by the MT.GOX cold-storage public keys, but without the corresponding private keys there is no way to transfer them.

        This may have happened a log time ago, and Mt.GOX could have been operating on a very small fractional reserve while they continued to accept both new customers and new deposits (and at the same time dicked around trying to recover their cold-storage keys). It could be that recent malleability attacks drained just enough of their fractional reserve from hot storage to push them over the edge of the cliff on which they'd been teetering for some time.

        The true value of a good lawsuit will be in forcing Mt.GOX to explain what happened (admit it, this is all pretty fascinating!).

        Nobody but the lawyers will end up with any money.

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  2. Craig "Spuddleziz" Smith
    Facepalm

    The numbers DO NOT add up. Surely, their liabilities would be any and all monies deposited by users. i.e. > $300m. Then again with the volatile nature of BTC/USD exchange rate this will go up and down.

    Also given they have assets, liquid or not, the lawyers are probably eyeing up that figure. Suppose any "winnings" would be taxable too.

    What a joke, somebody is sitting pretty with a lot of crypto coins and absolutely no way to convert them to real money.. oh wait, money isn't real, WTF!

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  3. Michael Shaw

    They have assets....

    The solicitors are suing because there are assets. There may be more liabilities than assets, which means that its impossible for everyone to get all of their money back... but what is at stake is how much will they get back.

    The only thing for certain, is for the solicitors involved, they will get 100% paid, cause when the money runs out, they stop working.

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    1. Nigel 11
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      Re: They have assets....

      Indeed. When a body animate dies, the vultures turn up. When a body corporate dies, the lawyers turn up. They perform the same function in different realms.

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  4. Jodo Kast

    No you cannot have MtGox's bitcoins.

    No you cannot have 'your' bitcoins back. You should have kept them instead of speculating.

    No fault but your own. Get off the internet.

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  5. Grease Monkey Silver badge

    And where do they intend to bring this action. If you want to sue you need to sue in Japan so what's the point in dealing with a British law firm? Of course the law firms will happilly take the punters cash whatever country they happen to be in, even if they know there's no chance of getting the clients their money back.

    This makes the law firms every bit as bad as MtGox if not worse.

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  6. Mike Moyle
    Facepalm

    Truly, a Cunning Plan™...!

    I'm sure that the law-enforcement agencies of the world AREN'T waiting for the plaintiffs aiming to recover their otherwise-untraceable financial assets in these class-action suits to identify themselves so that they can give them special scrutiny...

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  7. AndrueC Silver badge
    Stop

    Bringing a class action in an English court? Is that even possible? I seem to recall that our judicial system barely (if at all) supports the concept.

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    1. Anonymous Coward
      Reply Icon
      Anonymous Coward

      step 1 - take fees for getting clients interested in class action

      step 2 - take fees from clients for getting class action on lawbooks

      step 3 - profit!

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  8. Anonymous Coward
    Anonymous Coward

    Beware the wrath of the angry geek.

    These are the guys that get upset about the iPad 2 weighing 3 grams more than the iPad 1.

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  9. Frankee Llonnygog

    And now Flexcoin

    Cue a run on the Bitcoin bank and the value of Bitcoins dropping through the floor

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  10. Herby

    Worth??

    It seems that BitCoins aren't worth the paper they are printed on. Oh, wait, they aren't even printed. That would make their value even less.

    All of this yields the Wille Sutton phrase: "Because that's where the money is!".

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  11. Ethangar

    The Winklevoss twins had ~25 million in bitcoins last I read. Wonder how they made out ;) Might be another FB lawsuit coming to cover any loss. :)

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  12. Alvar
    WTF?

    Selachii - really?

    A law firm called 'Sharks'?

    I thought lawyers had their sense of humour surgically removed when they qualified.

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  13. edho

    Why Sue

    I transferred everything out of Mt Gox in early 2013 because everything I read suggested:

    1. Never leave bitcoin on ANY exchange.

    2. Mt. Gox was the most unreliable of ALL the exchanges. A history of loosing money to both hackers and due to government non-compliance.

    - apparently I left .08 ($8 worth) on Gox.

    Looking through my transaction history, I see I took the time to transfer that last .08 btc out of Mt. Gox in 12/2013 when it was worth $80.

    WTF were people thinking - leaving anything of value on Gox?

    My 3rd ever Bitcoin transaction was "get it off the exchange"....

    I am not sure how much sympathy the poor souls that left value on Gox deserve.....

    While some argue that this is part of the process - getting rid of bad players like Gox, it may also be culling out the idiot investors. Both for the better....

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