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RE: Legal responsibility for the Bitfinex theft (aka "Bitfinexit")
43 B.R. 623
34 B.R. 333
356 F.2d 749
It doesnt matter if the segregation is defined, merely if the funds are traceable. In this case, they are. We clearly know which funds got stolen and which didn't -- they were in specific wallets.
The fact that the segregation wasn't explicitly explained in the TOS isnt sufficient to invalidate the bailment,
MF global there was never any controversy, that i know of, about secured debt and commingling of funds... everyone just lost their money because it was all gone. but the account holders still got paid ahead of the unsecured creditors.
NO they would not... its obvious youre just making stuff up now. As the cites clearly showed you, "meaningful segregation" isnt neccessary. The standard of law is identifiability. Simply saying something is true, and that the courts "routinely" do it, without citation, is nonsense.
Also im pretty sure you think the word fungible means something it doesn't.
You don't like the way the law works, and thats fine. but that doesnt mean it doesnt work that way.
OTOH say if all the btc was in one huge wallett, then a portion of the wallet was stolen, then it would be different...
The tracing of thefts is certainly irrelevant if the BTC account holders are not associated with specific wallet partitions. And even if the BTC account holders are so associated, I am arguing such association is arbitrary, because the security methodology is fungible across all such wallet partitions, thus no such segregated account holders can be at a lower legal standing than the others of the same fungible asset. You are inventing an arbitrary mirage of partitioning. To be segregated, the assets must be meaningfully separate from each other, otherwise the segregation is not legally defined. Courts routinely look past obfuscation and directly to the salient attributes. Imagine if a bank had segregated fiat electronic balance accounts, and a hacker broke not the user's online access password, but some master password of the bank and stole balances from those accounts. Even if they were segregated, the losses would be charged to the bank and then to the accounts proportionally if the bank's assets were insufficient. You can't hold some users responsible for an arbitrary, luck-of-the-draw, meaningless partitioning which they have no control over. Segregation implies the user has control. The partitioning you are claiming can be traced, has no correspondence to the user's control over their account. The user doesn't even select which of the internal Bitfinex wallets they want their account to be associated with. Thus all segregated account are fungible w.r.t. to those arbitrary wallet partitions.