That is just spin.  They propose to give back (say) 10% of the assets and force clients to invest the other 10% into MtGOX2.0, and will count their share of whatever profit that MtGOX2.0 may make as the payment of the other 90%.  Why is that better than giving clients the full 20%, so that they can invest those same 10% into Apple stock instead?  The clients will surely recover their 90% back much faster this way.

I don't think that any court would find that reasonable.  Even if they viewed bitcoin as currency, rather than property, they would rather convert all assets to the national legal currency at current market rates, then pay the creditors in that currency according to the currency value of their claim.  They would see it as unjustified complication to return debts in different currencies. (Just think of how bitcoin payments would be recorded in the liquidation proceedings.) If an euro is worth 300 yen now, why would a creditor be unhappy to get 300 yen instead of an euro?  If a creditor is due 10'000$ for 100 kg of fish delivered to MtGOX, should the liquidator be obliged to give him back 20 kg of fish instead of 2000$?

But that comment is about another question, that makes a LOT of difference. Suppose that clients X and Y deposited 100 BTC each when the price was 10$, client Z deposited 100 BTC when the price was 1000$, and then client X (only) traded inside MtGOX until he had 300 BTC, and withdrew 100 BTC when the price was 1000$, leaving 200 BTC in the exchange.  Under the "final MtGOX account balance" interpretation, with current price 500$, their claims would be

  X = 200 BTC x 500 = 100'000 $
  Y = 100 BTC x 500 = 50'000 $
  Z = 100 BTC x 500 = 50'000 $

so X would get twice as much refund as Y or Z.  On the other hand, under the US law interpretation as described in that post, their claims would be:

  X = 100 BTC x 10, minus 100 BTC x 1000 = minus 99'000$ = lucky bastard, no claim.
  Y = 100 BTC x 10 = 1000 $
  Z = 100 BTC x 1000 = 100'000 $

so X would get nothing, and Z would get 100 times as much as Y.

So THAT is one big difference between the Sunlot plan and liquidation.

A liquidation would return to the clients some amount X that they can invest any way they like, including in MtGOX 2.0 if they want to.  The Sunlot plan would return them less than X and force them to invest the remainder in MtGOX 2.0, with no option to get out.  I still don't see how this can be better than that.

OK, but those seem to be small advantages compared to the disadvantage of not being allowed to liquidate for six months.  Could one get those advantages without the disadvantages by hiring an administrator?

Not sure.  IIRC, someone recently posted a document from PBoC (an alleged leak?) instructing media channels to avoid coverage of the Summit.  Thus I am assuming that it is the Summit, not bitcoin, that the government is upset about.

Not sure that they are totally prohibited to advertise.  Their commitment may be only to avoid excessive or misleading marketing that induces naive people to invest all savings etc..  (OKCoin recently had announced an open house party featuring a "bitcoin goddess".  Don't know whether that would count...)

I can agree with that.  But putting one's hopes on a technological "deus ex machina" is weak and lazy naiveté, not robust and diligent naiveté...

How MtGOX's depositors' claims would be computed under US liquidation laws:

https://bitcointalk.org/index.php?topic=587295.msg6644323#msg6644323

If that holds for Japanese laws too, it has important implications for the MtGOX liquidation vs. ressurection issue.  I can see that some clients would strongly want one way rather than the other.

My guess is that they mostly will, because they must have got some explicit and emphatic "advice" from the government.

To me, that Summit was born as part of the marketing plan for that new investment fund, BitFund.pe.  Now, the only advantage I know of SecondMarket's BIT fund over buying bitcoins directly is that US citizens can use certain retirement funds to invest in the former but not the latter.  I don't think that BitfFund.pe would have a similar advantage for ordinary Chinese citizens; but it may be attractive for things that the Chiense government does not like, such as corruption.  However, if it is registered offshore (.pe = Peru), the Chinese government cannot shut it down.  Hence the ban on news coverage of the Summit, and the "spontanous" withdrawal of the exchanges from it.

As for stopping leveraged trading, perhaps the PBoC considers that activity an instance of commercial money lending, which presumably only banks are authorized to do.

As for the fees on HFT trading, I have no idea.   I don't think that the government would care about that, but HFT may have been inducing ordinary clients to cash out and leave; so that item of the agreement may be implemented out of self-interest.

That is terribly naive, @aminorex.

In many democratic countries, the law already requires that all government spending be properly accounted and made available to the public.  Even in my own.  But embezzling of public funds is never so trivial as a public officer writing a check to himself.  The most common and efficient method is overbudgeting some large project and then having the contractor deposit a kickback in some offshore account.  (Last year the 3 past Governors of the State of São Paulo, all of the same opposition party, were found to have received several hundred million dollars in kickbacks from Alstom and Siemens, from contracts for the São Paulo metro.  Then, to counteract that bad news, the opposition found that an executive in the oil company Petrobrás, controlled by the federal government, bought a refinery in Pasadena that was good only for scrap, and apparently got a fat kickback on that.  And those are only two of literally thousands of similar cases, at all levels of government.)   There other methods too (like, internet gawkers found last year that an apartment in Miami was sold for US$ 10 to a Brazilian Supreme Court judge), but all are of course designed to not show up in the public spending records.

Ditto for political donations, taxable transactions, etc.. The law requires that they be declared, but of course people who violate donation and tax laws violate the reporting laws too.  The same would happen if the law required all such transactions to be made in bitcoin -- those willing to make illegal payments would not use bitcoin, or would use accounts that cannot be connected to them.

As for the military/CIA/NSA/FBI/etc., they would surely get exemptions from a "blockchain law" for national security reasons, with broad public support -- just as they now get exemptions from FOIA and external supervision.

It is a mistake that tech people make time and time again: to believe that a social/political problem can be solved by technology alone.  Without a social/political change, a technological "solution" will always be blocked, or co-opted and turned into part of the problem.  Bitcoin will not stop the banks from running the world; only an energic and lasting political effort could do that.

Chinese Slumber Method prediction for Saturday May 10

Prediction valid for: Saturday 2014-05-10, 19:00--19:59 UTC (not before, not after)
Huobi's predicted price: 2739 CNY
Bitstamp's predicted price: 441 USD





[ Plot legend ]

The data point for today May/09 was very bad (S = 0.0134, W = 0.028) and again way off the assumed trend (straight line defined by two previous points).  The Method then says to use a weighted least squares straight-line fit of the last three points (with very low weight for the third one) rather than the straight line of the last two points.  Namely, A + B*(d-d0), where (d-d0) is the number of days since May/07, A = 2752.99, B = -6.05.

The Bitstamp prediction, as usual, is the Huobi prediction divided by the currency conversion factor R, taken to be 6.21 CNY/USD.  Its value was 6.21 today (May/09) and yesterday, and 6.16, 6.23, 6.18 on the previous good sample times.
 
Checking the previous prediction

Prediction was posted on: Friday 2014-05-09, 00:43 UTC
Prediction was valid for: Friday 2014-05-09, 19:00--19:59 UTC (~18 hours later)

Foiled again by the treacherous Chinese:

Huobi's predicted price: 2731 CNY
Huobi's actual price (L+H)/2: 2802 CNY
Error: 71 CNY (~11 USD)

Bitstamp's predicted price: 440 USD
Bitstamp's actual price (L+H)/2: 451 USD
Error: 11 USD
 
NOTE: "Vision is the art of seeing things invisible." -- Jonathan Swift.

I can't see any new news about that on Huobi's homepage.  The "red lamp" link (notice 357, 2014-05-06 13:38:51 CST) still shows the "five exchanges agreement" and the attachment to that (notice 356, 2014-05-06 13:35:07 CST) still says "HFT fees to be determined".

According to the latter, however, they discontinued leverage at 00:00 May/10.

That is what I decyphered with Google Translate.

OK, I confess, that was pure trolling on my part.   

Prediction, in 3 years all the wealth in the world will belong to the Chinese bitcoin miners. 

It is not a  "witch hunt". There is no indication that Mr. Antonovicius (if it is him that Mr. Brewster referred to) did anything wrong, and it is quite possible that the did not even know that he had become the owner of Future Entertainment Ltd.

Once again, the doings of Mr. Brewster in England are relevant to Neo & Bee since they may clarify the question of whether it was a wel-meaning but ill-founded and ill-managed project, and Mr. Brewster final actions were prompted by its failure;  or whether it was a daring scam from the beginning.

Mr. Brewster may have been honest when he said that he had sold the company responsible for the cancelled music festival (although there seems to be no official record of the sale).  Or that event may have been a forerunner of Neo & Bee.  Finding more about "Ramluda Antonictvius" may answer that.  For example, it the man was no longer in England in 2012...

By the way, here is another note about the canceled festival:
http://sg7.biz/mailer/display.php?List=8&N=261 (Scroll to "Old Grits Diary" section)

We know about Gonzague, the Sunlot PR guy said it explicitly:

https://bitcointalk.org/index.php?topic=587295.msg6511936#msg6511936

I do not know about Mark.  Ostensibly, AFAIK, it would depend on the results of that investigation. I asked the PR guy about it, but he did not answer.  In fact it seems that he stopped posting on that thread at about that time (a thread that he himself created for that purpose).


Maybe, but AFAIK in Japan, as in any coutry, the owners of a failed company have the lowest priority for asset distribution.  They only get what is left after all the other creditors (including employees, and, hopefully depositors) have been fully paid.  In this case, since assets < debts, that is nothing.

The people who say that bitcoin will be worth at least 5'000 USD by next year.  Those who claim it will preotect your money from inflation, bank haircuts, taxes, etc.  Those who still claims that the price can only increase since there is only a fixed number of bitcoins. Do I need to point out examples? (Not long ago the WSJ reported on some Argentinian woman who said 1'000'000 USD/BTC.


Because they were?  

Madoff went to jail and his name is rightly mentioned all the time when discussing scams.  Why shouldn't the bitcoin Madoffs go to jail too?

Misleading marketing is misleading marketing, it does not matter whether it was on a blog, through an YouTube video, or printed on glossy paper.

The early bitcoin investors who later sold some of their holdings made huge profits at the expense of the later entrants.  That is what happens in any pyramid or Ponzi too, including Madoffs.  It does not make the thing a sound investment: since bitcoins pay no dividends, the expected gain for the average investor, in the long run, is negative.

Er... anyone who invests in bitcoin is a fool?  

Quite the opposite, I just wish that the bitcoin boiler room be treated like any other boiler room.

Probably.

I hope you are right.  However the chances of the police taking the matter seriously are much diminshed if the amount is small and/or other depositors are unwilling to sue.

In his blog article on MtGOX, Rick Falkvinge points out that returning a portion of the stolen money is a basic psychological trick that scammers use.  Once the victims have internalized the fact that they lost 100%, getting back 20% gives them a positive feeling, and they are much less likely to prosecute -- since the scammer "made a honest effort to repair the damage" etc.

That wasn't meant literally, of course.  Losing 60% of all you own is bad enough, don't you think?

But you CAN lose all of your life savings if you left the bitcoins in MtGOX, invested in Neo & Bee, or any of the other zillion bitcoin scams. (The first time I heard of bitcoin was when Rick Falkvinge tweeted that he was investing all his savings in bitcoin. Guess where he left them.  Fortunately for him he managed to get part of them out in time.)

You can also invest your 50'000$ of savings plus 50'000$ borrowed from relatives, friends and banks.  (You can bet that many people did that.  If the salesman says that for sure BTC will be worth 1'000'000$ in a few years...)

It is funny, but one of the things that people expect the government to do is to protect them from scammers who try to sell unsound financial instruments with misleading promises.  That is why there are things like the SEC and consumer protection laws.  And that seems to be the reason why many bitcoin businesses catering primarily to US citizens are based in Panama or other unlikely countries.

If the MtGOX thief/embezzler gets out in the end free and gets to keep the half a billion dollars he stole from MtGOX customers, and does so with full support of those customers, then perhaps those TV analysts will be proven right in the end: bitcoin owners may wish to pay to get rid of that cryptographic dunce-cap.

Simplifying all the positive and negative terms, and skipping the intermediate steps, the net result of the MtGOX-Sunlot affair will be: MtGOX customers lose 80-100% of their money, and in return drop all charges against Mark and Gonzague.

My reading of the Google Translate of the recent "five exchanges agreement" is: they were reprimanded for promoting investment in bitcoin in general and/or bitfund.pe in particular.  (There must be many common folks in China who lost their savings trading bitcoins, and that is bad PR for the government if it does nothing about it.)  Thus, as part of their effort to assuage the government, the exchanges decided to curb their marketiing of bitcoin investment, and in particular pull out of that Summit.

But that data is not public, and only the police can obtain it from the banks themselves.  If Sunlot does the investigation, instead of the police, they will have to trust the MtGOX records, and they can ignore even that information and reach any conclusion that they want.

Furthermore, bitcoin withdrawals and deposits may be hard to verify independently from MtGOX records.  If all the BTC withdrawals by user TibanneTheCat were expunged from the database, that account would have an inflated BTC balance that is fully consistent with its trade history.