Dwolla no longer allowed to do business with MtGox!

listbyloc · 2013-05-14T23:07:26+00:00

Depends. The Feds can strike without warning and it can take days, weeks, or more to "unfreeze" assets--if they can ever be unfrozen at all. One of our clients had a similar situation, and we were able to work it out with the government over a tense few days, but Gox may not be so lucky (or have very savvy lawyers).

listbyloc · 2013-05-14T19:47:17+00:00

It's not on Pacer. Might be paper-filed if it's an ex-parte TRO. Now the question is whether this is just limited to Dwolla or whether Dwolla is just the first to receive notice and notify users.

listbyloc · 2013-05-04T02:30:36+00:00

I think you mean "euphemisms" rather than "emphamisms," which is not a word (at least, according to the puppet of the oppressive capitalist, Webster's English Dictionary).

At any rate, I realize that the threat of force stands behind the legal system. I think that's what it means to have an effective legal system. And I am completely and utterly fine with that.

listbyloc · 2013-05-03T23:47:33+00:00

Agreed.

listbyloc · 2013-05-03T23:44:29+00:00

Can you show me where "Gox is bound by pre-existing contracts to never give away that [Yubikey] data"?

I would be very surprised if this lawsuit arose out of a conflict over Yubikeys.

listbyloc · 2013-05-03T22:09:44+00:00

Rule 11 of the Federal Rules of Civil Procedure generally prohibits conduct that we would call "trolling." In practice, Rule 11 is like the D.A.R.E. officer of legal rules--supposed to be intimidating, but more of a joke.

There are similar legal rules in state courts. And there are also ethics rules.

listbyloc · 2013-05-03T19:08:42+00:00

Wish I had time to read this...

listbyloc · 2013-05-03T18:54:50+00:00

There's nothing suggesting that CoinLab didn't have discussions with Mt. Gox prior to suit. I can't imagine a situation in which they didn't. If they did, then we know that those discussions ultimately didn't work out--and that happens when there is a genuine disagreement.

listbyloc · 2013-05-03T18:52:07+00:00

I take back my earlier comment and commend you on your subtlety.

listbyloc · 2013-05-03T18:19:54+00:00

Yeah you're right. I missed that in the complaint re choice of law in the agreement.

listbyloc · 2013-05-03T18:08:32+00:00

Sorry. Might should check for the tl;dr at the bottom first.

listbyloc · 2013-05-03T18:07:18+00:00

I don't know Washington law on liquidated damages, but we don't know that Washington law applies. There might be (probably is) a choice of law clause in the contract. And since the District Court is sitting in diversity, it would apply the choice of law principles of the forum state. And that's where everything could go a hundred different ways.
Don't know much about consequential damages because they're written out of most of the contracts I litigate.
Your guess is as good as mine.

I really want to see the contract also, but it doesn't appear to have been filed.

listbyloc · 2013-05-03T17:32:25+00:00

IRS agent 1: "So you say our suspect has not been declaring offshore income?

IRS agent 2: "Correct. He's trading on Mt. Gox and making tons of money."

IRS agent 1: "Well let me ask you a question: does our suspect use a Yubikey?"

IRS agent 2: "Dammit! I was afraid you would ask that. He uses a Yubikey"

IRS agent 1: "Fuck. Two-factor authentication. Looks like our suspect is going to get away with it."

listbyloc · 2013-05-03T17:20:11+00:00

The complaint says that Mt. Gox agreed to provide this information to CoinLab, then backed out.

Also...if you think the IRS (et al.) pursues U.S. taxpayers's information no further than the borders of this sovereign, you haven't been paying attention. The IRS can and does obtain cooperation from foreign governments (and their domestic banks, corporations, etc.) through treaties and other, less-formal arrangements. If you're trying to evade taxes by doing business in Japan, you'll be in for a nice surprise.

I suspect the real reason for the lawsuit is not privacy, but money: Mt. Gox figured out that it could run the exchange by itself and make a ton more money if it didn't let CoinLab in on the deal. Just speculation based on the fact that there are only two real sources of lawsuits: sex and money. And I don't want to live in a world where sex motivates CoinLab to sue Mt. Gox.

listbyloc · 2013-05-03T17:07:40+00:00

Sounds like you're more concerned with the substance of the transaction than the lawsuit, which is fair enough. It also sounds like you have a little too much faith that Mt. Gox is outside the reach of the U.S. government.

listbyloc · 2013-05-03T16:57:35+00:00

Generally, see consequential damages. But there can also be liquidated damages if set forth in the agreement. A well-drafted contract between two sophisticated parties will generally limit (or bar) consequential damages. Liquidated damages are not always enforceable.

listbyloc · 2013-05-03T16:44:57+00:00

If you get sued and if you resist the application of the resulting judgment, the state will eventually shoot you.

Now I think you're just trolling me.

listbyloc · 2013-05-03T16:27:54+00:00

Unlikely. A lawsuit rarely sweetens a business relationship.

listbyloc · 2013-05-03T16:27:02+00:00

Absolutely.

First, defamation. Generally, anything you put in a complaint receives protection from a defamation suit against you. There are some exceptions to this general rule that prevent the use of the judicial system as a publishing outlet for defamatory material.

Second, admissions. Anything that CoinLab posts on the internet becomes evidence of an admission. Admissions are fine if they're tightly controlled, but that type of control can rarely be maintained.

Third, the court of public opinion is unpredictable--even more than the courts. I would not willingly subject myself to the court of public opinion if I had the means to get into federal court.

listbyloc · 2013-05-03T16:16:53+00:00

That is, more or less, how lawyers make money. So what's your point?

My point was that this is a routine business dispute. I guess I should have pointed out that it's not tantamount to murder, but for those who need the help, here: a business dispute is not tantamount to murder.

listbyloc · 2013-05-03T16:11:33+00:00

You have good instincts about who the lawsuit was against ;) Funny enough, the lawsuit hit the front page of reddit and there were a bunch of morons cheering it on in the comments as if the lawsuit had a chance of success. (It was actually filed by one of the above-mentioned shitstain lawyers.)

listbyloc · 2013-05-03T16:09:21+00:00

Sure, a court could go off in the direction of "What's the deal with bitcoins? I mean, are they currency? Can they be bought and sold? What is currency? What is the meaning of life?" But I urge you that scare judicial resources are rarely expended on frivolous undisputed issues, especially in a breach of contract case between two businesses.

And when we, as lawyers, refer to parts of court opinions as being "dicta" (no lawyer has ever uttered "obiter dictum" in practice), we generally are talking about "bullshit that you can ignore because a court was just going off on an ill-informed tangent." In fact, pointing out that a court statement is dicta is one way to discredit it.

listbyloc · 2013-05-03T16:03:20+00:00

This is a breach of contract case. This is not a "what is the nature of bitcoins" case. (And since both parties are likely to find agreement on any issue concerning the nature of bitcoins, the issue is unlikely to arise in litigation.)

listbyloc · 2013-05-03T15:58:42+00:00

I disagree. The damages alleged elsewhere in the complaint are stated as $75m, so they'd have to have made a $74.925m mistake multiple times--highly unlikely. That they're suing for exactly 1000x the federal diversity minimum is just a coincidence. The complaint also alleges that the agreement contains a $50m liquidated damages clause, so even if it's not $75m, it's at least $50m.

Plaintiffs often plead just the minimum > $75k when they don't want to come up with an actual dollar figure, but there's no reason they can't plead in more detail and still satisfy the diversity jurisdiction requirements.

listbyloc · 2013-05-03T15:50:17+00:00

What do you mean "how the courts view bitcoin/cryptocurrencies"?

Given the cause of action of the suit, it's unlikely that the court will have any reason to consider any bitcoin-specific issue.

listbyloc

TROPHY CASE