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Comment by malka | Hacker News Reader

I would not like to be in the shoes of mtgox CEO... He lost about 400M USD, some of them probably belonging to shady peoples (drug dealer, mobs, etc.)

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Thought experiment.

So your biggest crooked customer has a balance of 10% of your net liabilities. And someone steals 1/3 your net worth so you're basically outta business and the biggest crook on the planet just took a 1/3 haircut, which he's not going to be too happy about.

You tell the biggest baddest gangster of a customer, you can more than triple his current balance at the mere cost of guaranteeing your personal safety in perpetuity and having a crony of his and a crony of yours re-enact the 1/3 theft. After all, you just figured out what happened, and its not going to be too hard to arrange for it again two more times.

So that leaves the biggest crook in the world in debt to you, a fat bank account, and lifetime guarantee of protection from said crook.

Do some deals with the crooks competitors to make sure they know he gave you his word, so if he ever goes back on it they'll never trust him again. Or run the same scheme three times and make sure the top three crooks know that the enemies of the guy who kills you off are going to split your fortune if you croak.

Or lets say you make "all" the BTC disappear but you actually have enough control to reimburse every player big enough and criminal enough to actually hurt you, with millions left over for yourself.

Your biggest customer is about to get powned as a money launderer by the DEA/IRS and his only legal hope is to make your records look untrustworthy. Would any court of law trust MtGox's records after today? I guess there's no proof anymore that some bad guy was about to get powned. Well, there's an easy way and a hard way to do that, at least WRT collateral damage to the execs family members. And if you still tangentially somehow have control of the "lost" money, nobody important need actually hold a grudge.

I'm not saying any of this is true or even possible, although it could be the plot of GTA:7 or similar. These are better hollywood movie plots than the formulaic dreck we're forced to endure.

>These are better hollywood movie plots than the formulaic dreck we're forced to endure.

I'd watch this movie(s).

Well that's what people say, yet I haven't seen lots of executives in large companies where scandals have occurred suddenly getting randomly killed by hitmen in the streets. And Madoff's still alive, too.

But isn't that just one of the differences between a regulated business and an unregulated one?

Madoff isn't dead, but he is in prison.

Wait, nobody said that MtGox's CEO won't go in prison. There will be a lawsuit following the losses. The Law still applies when you start taking money for a service.

You can't sue someone into jail

Debtor's prison?

I'd be curious to see exactly what MtGox warranted and represented. I'd guess it's fairly likely that there's no fraud.

Well, a gentleman flew all the way from the UK to Japan to have a polite chat with him, so it's not outside of reality for someone to do bad things to him fairly easily.

Beyond that, CEO's of large companies are generally under guard when the crap hits the fan, and Madoff was protected by police.

I wouldn't be surprised if the "CEO" of Mt. Gox soon finds out what a tire iron tastes like.

Death threats on HN. That's a first.

Oh, please. How sensitive can people get? That was hardly a threat.

How, exactly, was this a death threat? I find your response to be quite befuddling.

Tastes irony.

Executives of large banks have the protection of the larger system to fall back on, Mt Gox, not so much.

Madoff swindled the rich iirc.

There was the Bre-X scandal where a geologist "fell" out of a helicopter and the founder was kidnapped by gunmen (and apparently died later of a brain aneurysm).

http://en.wikipedia.org/wiki/Bre-X

Japan's mafia is differnt than American's mafia. They are technically savvy and might be more ruthless? (Don't ask me how I know--I was even shocked they exist, but even in Marin County I knew a guy who owed them money, and they were the first one he paid back. I have a huge suspicion that The Yakuza is running Mt. Gox? Asians not involved with gambling--what is that called ironic? And no I not racist, but just pointing out an observation. And funking yes--crypto currency is gambling. It's not backed by anything, other than code, and promises. If banks weren't insured by the federal government I would not keep my money in them. I blindly trust most poor, middle class people. Once they get a few shekels save up--they change. Yes--Most of the wealthy I have been around literally stole their money. Some legally, but many just stole. I hope Internet sleuths can find out what happened at Gox. And God bess the brave who lost their lives in the Ukraine.

Is this an HN comments-seeded Markov chain?

Even if you were a shady drug dealer, revenge doesn't get your money back.

The reason I trust normal contracts to work is that I pay for guys with guns to enforce them. I call them "police", and my payments "tax". But if you are doing deals that are illegal, you have to provide your own enforcement.

The rational interest of a criminal here wouldn't be revenge. It would be reputation maintenance. The reason mafia loan sharks are known for breaking kneecaps isn't that they're personally upset, or that they can't afford the loss. It's that they can't afford anybody else thinking that their loans are something they can walk away from.

That's the theory, anyway. Let me know how it actually goes when you get defrauded and see if that super-reliable infrastructure has your back, or if your case is too small for them to care about.

"The government provides protections" != I can completely trust my contracts to work because of it".

I didn't say it was super-reliable. Or that I trust my contracts to work. But it certainly has been enough for my needs. Despite a lot of years in business, I've never felt a need for extra-judicial enforcement.

Oops! Editing error. Above I mean "to work perfectly".

Sorry, I just didn't see anything in your original post that reflect the actual reality of what law enforcement does when you really get defrauded.

It's not about the money. It's about sending a message.

Oh, come now. Bits don't burn.

Though the idea of making a pile of hard drives and setting that on fire sort of intrigues me...

That's the first thing I've thought. Back in the old SR days you could hire hitmen for pretty reasonable amounts, especially compared to 750kBTC.

Back in the old SR days you could hire FBI agents posing as hitmen for pretty reasonable amounts, especially compared to 750kBTC

Given their physical office location I wonder if any Yakuza have(had) any BTC in MtGOX. That could get interesting.

Those kinds of guys don't seem like the type to trade cash, which they know well, for magical internet money that they know nothing about.

The Yakuza have been moving into white-collar and financial crime for decades, and Japan has had cellphone-related quasi-currencies for a long time now. It's not that big a stretch.

Uh. If I was in organized crime and I heard that Bitcoin was a great way to do money laundering, I'd make sure I knew about it. That's half the point of organizing crime to begin with.

How do you know a highly organized unit of crime is technologically illiterate?

Well, the local bunch are certainly not all that sharp from that point of view.

"In April 2006, fugitive Mafia boss Bernardo Provenzano was captured in Sicily partly because some of his messages, written in a variation of the Caesar cipher, were broken. Provenzano's cipher used numbers, so that "A" would be written as "4", "B" as "5", and so on.[11]"

http://en.wikipedia.org/wiki/Caesar_cipher

And this wasn't just some bozo, but a Mafia boss who was certainly into a lot of different "lines of business":

http://en.wikipedia.org/wiki/Bernardo_Provenzano

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