fraud begets fraud, period.

here's a simpler way to understand it (i've given more complex ways in other threads):  a 'rollback' helps nobody but the theft victim and mt. gox, which is presumably planning it for selfish reasons, not for reasons that aid anyone else.

the very purpose of a formal exchange is to abstract away such problems. you don't ask, when trading standardized options, whether somebody has entered into the option with their eyes open; it's as formal as a contract ever gets.

currency markets are similar, and what mt. gox is proposing is truly unprecedented in that context and does not inspire confidence.

as i suggested in another topic, just for argument's sake, what evidence does the public (anyone outside of mt. gox) have that there even was an attack? how would anyone know that it wasn't a large holder of bitcoins who was trying to sell, hoping to get a decent price from large dark pools he or she suspected existed? then, unhappy with the total price received from the bulk sale, this large holder could have then asked or paid mt. gox to roll things back.

i'm not suggesting that happened, but how would anyone know? many following the live data as it was happening assumed that it was simply a large holder of bitcoins selling, and that's not an unreasonable assumption.

the reason i ask is that people who did act on the data were not unreasonable to do so; a rollback for them is a presumably an odd surprise.

again, i have no personal stake in mt. gox's decision here. i just think they're being glib and heavy-handed, and the lack of transparency is frustrating. i never opened an account, indeed, in part because of similarly heavy-handed things they did in the past. a rollback here does not strike me as a professional response, at least without considerably more information, audited by a third party.

I did respond to your speculation that maybe there wasn't even an attack in the other thread where you posted it.

As far as whether this is unprecedented or not, some on these forums say it's common for exchanges to cancel trades, but I am not familiar with the matter. Regardless, MtGox's terms of use presumably allow it, or if the terms are not explicit, then nothing forbids it.

i challenge anyone to cite one example from a reputable currency (or even commodities) exchange.

and the absence of a restriction in a contract does not give the party who happens to have power freedom to do anything in a contractual relationship. that's not the contract law of the united states, the united kingdom, or japan, at least. instead, terms are implied based typically on trade usage, and implied terms are just as binding as express ones.

right, but this was why i emphasized currency exchangers. equities markets are indeed different. and even there, as you say, it usually requires consent, which is usually given because the parties are repeat players and don't gain long-term from taking advantage of someone else's mechanical error.

even in the equities markets, however, it would almost never happen in cases where a broker was the target of identity theft. again, i challenge anyone to come up with a single real-world example along those lines. it's different from a NASDAQ market maker accidentally quoting 10,000 shares instead of 1,000 to another market maker that it's dealt with for ten years.

again, this was not an exchange or order problem. someone stole bitcoins and sold them. they just happened to steal them from the party that was acting as the exchange.


there are still regulators. mt. gox is not 'unregulated'; it just sometimes seem to act that way. i'm not sure what the regulators would do here, though. if nothing else, there is private contract law. mt. gox isn't operating in a lawless jungle where it can do whatever it wants because it happens to have power. that's why i say that their response seems glib and heavy-handed to me.

Yep. Implied terms are in force in absence of formal contract and this does not help mtgox one bit.

They said that they are talking to lawyers and the same time they have not even published any terms and conditions or company registration details or contact details. I am not familiar with prevailing legislation in Japan but in UK and EU only failure to disclose contact and registration details would get them in serious legal troubles even if they were just selling dog turds. But they are playing into a financial institution and taking deposits. This is all freaking unbelievable.

The first lawyer they would talk to would raise hell about this as the first matter of business. This is extremely amateurish...