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Comment by pjc50 | Hacker News Reader

It does feel somewhat unfair, but it's long-settled law on stolen goods: if you buy a car and it turns out to be stolen, or a house with an improper title, you don't get to keep it. In both cases the buyer is supposed to check and beware of "too good to be true" offers.

Note that they get to keep the principal, so they're not even out the money they might be if they bought a stolen car.

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Public auctions are one way that this chain is broken. Must have been from the old days when movement of objects was more difficult, but something put up for a public auction can be inspected and claimed by someone as stolen, but afterwords people get to keep what they bought. Thus auctions for lost luggage, police stuff, car auctions, etc.

Also there is a special rule for cash. Stolen cash is not treated this way, so if a bank is robbed and has all the serial numbers, they can't take the money from you if you happen to get one of the bills in a transaction.

Curious if this approach was tried on behalf of those who lost BTC at Mt Gox -- could other BTC holders have their holdings taken away if it originated from the Mt Gox theft (or other theft.)

...or is BTC treated as cash?

BTC was 'found' by Mark Karples (~200k). When the price increased, the custodian started selling it to lock in enough money to pay off the creditors [0]. Now the question is how to do the payouts due to the way Japanese law works [1].

  [0] https://www.mtgoxlegal.com/2017/10/27/press-release/
  [1] https://www.mtgoxlegal.com/2017/11/29/the-legal-advice-civil-rehabilitation/

I agree. This also sets an important precedent that future investors in different funds must consider. If something seems too good to be true, there might be consequences for them. They are disincentivized to look the other way.

Not really since they still get to keep all the profit they made off the stolen goods.

That's exactly what's not happening in this case.

Actually, I think it is. It sounds like they're clawing back the investment profit, but it is likely those profits were invested in something else which also earned a profit. That additional profit is yours to keep as far as I can tell.

So they get to keep the profit they made off the profit but but not the profit itself?

Alternatively, they could have spent the original profit or lost it on another investment... In other words the end result was similar to a loan. I'm curious whether the claw-back included a risk-free interest rate.

>It does feel somewhat unfair, but it's long-settled law on stolen goods: if you buy a car and it turns out to be stolen, or a house with an improper title, you don't get to keep it.

I agree with your first line, but wanted to nitpick the legal statement.

That's not the law on passage of title. Things are a whole lot more complicated than that.

The rules are jurisdiction specific and civilian and common law systems deal with this issue differently. Historical common law treats property as a series of tiered claims, not as a singular entitlement.

Sometimes there are brightline rules regarding registration requirements. Sometimes there are multiple sale good faith caveats. Sometimes there are confounding evidence requirements. etc.

Generally speaking, you never get to keep the item if you knew or ought to have known it was fishy. Beyond that, things vary.

True if you buy a car in a private sale. But if you buy a car from a regulated professional dealer and it turns out to be stolen then things get a little bit more complicated than just you have to give it back. I would expect in that situation that the dealer makes everyone good (and possibly goes to prison).

You mean like how Madoff went to prison

This isn't my understanding of how it works. I thought that if you bought a stolen car from a dealership, the police could still tow the car and give it back to the rightful owner. You would get your money back, and you would sue the seller if necessary. I don't see how buying from a dealership makes this any different, except a dealership is easier to sue and recover damages from.

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