Bitcoin Forum

On behalf of the Bitcoinica investors and customers, I direct this message to Donald Norman, Patrick Strateman and Amir Taaki.

Gentlemen, I do not have to remind you of the calamities that have befallen Bitcoinica since April 24. The universal dissatisfaction surrounding the events has been discussed at length elsewhere.

In your absence, Bitcoinica's investors and others have been pursuing options to minimize loss and move the refund process forward. Unfortunately, there are no efficient ways to do this without your cooperation.  

I'm writing now to ask you to support the needs of the customers.

Attached you will find a company resolution that authorizes formal liquidation under New Zealand law. As you know, your legal authorization as owners is required to take this step.

If you continue refusing to act, the only way forward is court. This will add months of additional delay and drain significant funds that would otherwise go toward repaying customers.

I thank Patrick Strateman in advance for your promise to assist the liquidator. Words are a good start. What's needed right now is action, from each of you.

It's important that you return the signed resolution before the weekend.

----

https://i.imgur.com/nl1hv.png

https://i.imgur.com/J1sF0.png

Thank you for trying to advance this along. 

Isn't Amir tied up all weekend with organizing the London conference?

You should probably fly to London and place it in their hands in front of an audience.

I think you should at least call them / email them in case they don't browse the forums.

Tihan wouldn't have to fly there at all. Whoever is attending should have three copies on their person to present to them at the conference in front of witnesses with a camera rolling for our viewing pleasure. Walmart has a sale on caramel popcorn this week and I'm planning on stocking up.

~Bruno~

Reading this http://www.mvp.co.nz/profile/our-people/iain-mclennan I see no reason why he shouldn't/wouldn't look into Zhou Tong as well, seeing that he's worth his salt. That said, I like this guy.

~Bruno~

Tihan-

Do you have any idea, after paying for this entire process, what will be left over for the rest of us?  Any idea at all would be nice.

Thanks

From my limited experience with liquidation lawyers here in Australia, the administrators and lawyers will rip into the carcass like hyenas by gouging the wide-eyed puppies on the sideline for the privilege of picking over the merest scraps of what was once theirs.

Good luck though.

I'm waiting for the version of this for pirate's BTCST to happen...oh wait...

I don't know how to read one of these things, but it looks like it's not that bad. http://www.mvp.co.nz/media/reports/11260+Limited+(In+Receivership)/112603report.pdf

A $472 fee to recover $6,221. I like that.

Here's another example: http://www.mvp.co.nz/media/reports/Water+Systems+Treatment+Specialists+Limited+(In+Liquidation)/watersystems2ndreport.pdf

u r gud at teh internet

Think and take a look at the paper work and decision for 60 seconds.
print it 60 seconds (print machine needs some warm up)
sign it 3 seconds.
tell people that they have sighed and mail the hardcopy, 300 seconds.

So, it will take 423 seconds from them.

$472 fee? It's the balance that was after all fees.

$6221 recovered - 3150 receivers fees - 1380 salvage payment - 1219 legal fees = 472 balance to pay to creditors.

Why is this being posted on the forums? It's something to be sent to and between lawyers. This is just stiring the shit.

Really this SHOULD go to court, not just for the liquidation but for the theft and for other laws broken.

To ask or even expect this jpeg to be signed before the weekend is beyond wishful thinking.

Liquidators typically charge $200+ per hour, but they also charge for the time of their support staff.  There is oversight by the Registrar of the Insolvency and Trustee Service and creditors can request review by the Official Assignee if they're really unhappy with the liquidator, but liquidators have considerable liability in respect of the estates they administer so it's not in their professional best interest to pad the charges. 

In this particular instance, there aren't a ton of different assets to be sold, so that part of it should be relatively straightforward.  Verifying the claims might be time-consuming given that the records have had to be reconstructed.  The more co-operative the principals are, the less it's going to cost.

The liquidation and the other matters are separate legal issues.  Failure to liquidate the company can be an offence in itself.  When the liquidator establishes the cause of the company's failure, he is bound to determine if any criminal offences have occurred and refer them to the Serious Fraud Office.

Yes, there are issues which should go to court.  Beginning the liquidation should not be one of them.  The only people who benefit by the liquidation being delayed are those who may be found to have personal liability in respect of Bitcoinica's failure.

If they're not going to cooperate then I want them to have to publicly state that.  Why these guys are still running around in this community and the project is beyond me.

Seems like it is a setup by tseale.  Doesn't seem like they will sign it, just ignore it.

Lotta blame to go around. :P

 Nefario: Do you not think tihan *has* mailed them and many times? He is posting this here so everyone can see how uncooperative these guys are.
There is no reason in the world for them not to sign this. All it says is that they don't want to run the business anymore. And they clearly don't want to.

If they don't sign it, it will take an order of the New Zealand High Court to put Bitcoinica into liquidation.  I'm sure Bitcoinica's creditors will be thrilled about paying lawyers for that.  One way or another, the actions of everyone associated with Bitcoinica are going to be examined by a liquidator sooner or later.  Delaying that process or making it more complicated than it need be ultimately only disadvantages the people who are owed money by Bitcoinica.  Nobody's liability is going to be lessened by delaying the liquidation process.

Yep! I knew that when I posted it, but opted to present it as I did to see if anybody else would catch it. There's a whole slew more just like it on the net. I found those via Iain's (iain--not an L) full name in quotes.

Sorry for the ruse, but I wanted the info out there. I truly do like the guy, though.

~Bruno~

For the record,  I have pleaded with the Intersango trio, both in person to Patrick Strateman,  and electronically to all three of them to sign something like this.
All three of them have refused to date.
I hope they reconsider, and do the right thing.

I still want my 23,000+ Bitcoins back!

Side topic:  why is this paper work taking weeks when it should be days?

I still want my 17,000+ Bitcoins back too!

If I get paid in full before the end of 2012, I will DOUBLE my total donation list. The ellet or the magazine are no longer on the list.

Tihan, good luck!

Liberty Maria.

intersango team does not learn ;)

now they are angry and hiding like childs... just refusing to talk.

would be amusing if no many people (me included) didn't lost that much money.
for me phantomcircuit is the reason why i am not in london now.

Rofl. It was their responsability to claim theft as bitcoinica owners yet they just did nothing

Seriously why are these guys still even allowed to talk at the conference in London. These guys should not even be related to bitcoins anymore. I still do not understand who still uses intersango after all this BS.

I think people forget just how much Bitcoinica still owes its users. 

+1
i dont understand it either... there are good alternatives.

This


and this...

Come on guys, do what's right for bitcoinica customers, it's never too late.

NO COMMENT.

Amir "genjix" Taaki is RUNNING the conference. What do you think he's gonna do: "Oh, hey guy in the mirror, you can't go to the conference you're running." "Damn.  :-[ And I so wanted to go too."

Maybe Patrick's tracked down the hacker/s and will reveal their identity during his presentation.

By refusing, do you mean they have failed to reply or simply that they have replied "no"?

Yeah. I actually wonder if this very public request was deliberately timed to be difficult or impossible for the people named to actually fulfil by the deadline stated.

I think getting the legal advice required to make an informed decision about company operations in a completely different country may take a bit longer than 60 seconds.

They should have obtained legal advice about liquidating the partnership two months ago.  They know that it can be put into voluntary liquidation immediately with their agreement or forced into liquidation without their agreement by court order.  It's not like this issue has only just arisen.  Creditors lose out twice over if the liquidation has to be ordered by the High Court.  Firstly from yet another unnecessary delay, and secondly because all legal costs associated with obtaining that ruling will be deducted from the insolvent estate before distributions to creditors are made.

i hope they sign, but then again why would they?

they have nothing to lose at this point and clearly they do not care about the community and the people who lost money or it would have been resolved by now:(

It's not entirely true that they have nothing to lose.  There will be lawsuits regarding Bitcoinica and the findings of the liquidator are bound to be introduced into those proceedings.  It's never a good thing to have evidence that you have failed to act in good faith presented in litigation against you.

The liquidator is obliged to investigate the totality of the circumstances surrounding Bitcoinica's failure.  His investigation will not be limited to what took place between 24 April and 12 July - it will certainly look at the state of the business when Bitcoinica Consultancy assumed control and whether it was on the brink of collapse at that time.  Given the very short life of the company, it is highly probable that it's financial history since it was formed will be reviewed.  People other than the directors can be found to have personal liability in respect of the failure of the business, and to the extent that Bitcoinica Consultancy claims that they were not totally to blame for the failure of Bitcoinica (a stance with which I happen to agree), the liquidator can determine any other parties who may have civil or criminal liability.

How do you know they have done nothing? Just because people don't post updates on the situation of legal proceedings on the forum doesn't mean nothing is being done. Also how do you know Tihane(or whatever his name is) has done anything or is even who he says he is (has anyone here even met him?)? All he's done is make statements on the forum(has anyone noticed he's been editing earlier statements to make them consistent with what he's said more recently?).

Has no one here considered that they've been advised not to speak on the situation by their lawyer or that they ARE taking action, actual action instead of posting on the forums?

The reason this should go to court is because someone has committed a crime, theft, and attempted to destroy the reputation of an organisation. If you don't prosecute the criminal, even if they give back the money when caught, then that is an economic incentive for them to continue stealing, it's self defeating. Intersango's reputation has been seriously damaged by this incident and this hangs over everyone who works there. Taking this to court will do several things, clear their name, have the thief prosecuted and jailed, and have funds returned to users.

I don't work for Intersango but I it's blatantly obvious you guys are allowing yourselves to be manipulated, some pseudo anonymous person makes a post on the forum saying he did something (can you verify that he did?) and you all run off in the direction he says the criminals went.

Regarding the conference, it starts tomorrow(proper, started unofficially on Wed.), it's been mostly organised BY the guys from Intersango so they have every right to be there. If you don't come (with the aim to boycott Intersango) well fine, thats your loss, I don't think anyone there will miss you and we'll go and create the future of bitcoin without you. It's already a huge success both financially, media and attendance wise.

Nefario: you need to understand people who lost coins/money are simply desperate about it and cannot go much longer without hearing about any real progress.

I'm not amongst them but I can understand their feelings, including those of investors who lost heavily in the operation.

I doubt there are very many people on this forum who would not like to see the thief/thieves caught and prosecuted.  That is - however - a separate legal issue from liquidating the company, which is what needs to happen for the assets which are currently in hand to be distributed to creditors.  There is absolutely no need to delay payments to creditors through the civil process of liquidation.  If further funds are recovered at a later date as a result of criminal prosecution, the distribution of those funds will be determined separately.  The liquidation of Bitcoinica does not preclude recovery of funds through other legal means outside of New Zealand (and it doesn't even affect the recovery of funds within New Zealand if they have been illegally or fraudulently obtained).

Criminal proceedings against the thief/thieves should absolutely pursued and it's in the best interests of all at Intersango to actively seek and assist a criminal investigation by the relevant authorities of the Bitcoinica thefts.

I, for one, will be reading the liquidator's reports with great interest and if they appear inadequate I can assure you that I'll not only make that fact public on this forum but I'll also be on the phone to the Official Assignee's office in New Zealand.  Zhou's role in this will not go unexamined.

For the record, Tihan is anything but "semi-anonymous".  If you don't know any information about him which he hasn't disclosed on this forum, then it's because you haven't looked.  Do you really think that when the shit hit the fan with Bitcoinica and Tihan's involvement was first revealed people didn't go digging.  Hell, even the amount he paid for his house is a matter of public record.

I even believe that walking away from the refund process following the MtGox intrusion was the right thing for the Intersango guys to do.  In doing that, however, they had a duty to ensure that the process of returning user funds was legally handed over to someone authorised to conduct that process as soon as possible - by passing a resolution like the one in the OP and appointing a liquidator.  It really is that simple to put a business into voluntary liquidation and it could have been done a long time ago.

A few people have met him.


Then it probably is too hard to say "We can not comment until X as advised by our lawyer" ?
In the meantime I guess it was / is too hard to post any update to mail or the website for months ?

Do you think I have not being patient sending dizains of mails for no answer ?
The only contribution that I can recall of patrick is posting trolling videos.


Everybody is asking for that, but NOT from the liquidator and NOT from my fund.
WE CANT DIRECTLY ATTACK THE HACKERS AS HE DID NOT STEAL FROM US, AND THE RECUPERATION OF THE FUND IS NOT DIRECTLY DEPENDANT FROM THE THEFT.

They had every right to declare a theft from the bitcoinica company yet they did not. Or did they ?

IF they did anything why is everybody in the bitcoin community except their london buddies acting like they did not ?


How ignorant that remark is.
I am probably much more informed than you about everything regarding the creditors side.
The only thing I am probably missing is the intersango guys side, but it is not like they had no chance to give it.

When they lost the 400k$ I still remenber "I guess users will have to take a 30% loss". Not a single "sorry" or anything.


A personnal attack even though you know nothing about me and what I may have done or not for bitcoins.
Excellent way to gain credibility on your post.

They have every right to present and organise the conference, we have every right to go and be there and make this topic a hot issue at the conference.

And wether or not you want it probably will.

And sorry, but if the goal of intersango is to clear their reputation by holding MY money and making us PAY for legal and civil attorney, then they are essentially saying :
"hello dear users we dont care at all about you all we care about is our reputation"
What does that precisely say about them ? Any guess ?

They need to realise that the only way to redeem themselves is precisely to help the users.
If the users in some way get fucked up I am sure that a lot of people will be commited to ruining their precious reputation one way or another, ESPECIALLY if they sacrificed the users for their legal reputation or whatever that is

In a practical sense, they are thieves.

With what's known, how can you expect us to speculate they have done anything ?  Since the last theft they have said nothing relevant about it that I can see.

On the other hand, I remember things like :"I could care less about people like Roger Ver who have a lot of money lost ..." -Amir  

(that's what allowed the theft of 40 000+ BTC) https://bitcointalk.org/index.php?topic=67199.msg1101382#msg1101382

This elaborated statement from Amir : "This is not a kangaroo court"   https://bitcointalk.org/index.php?topic=95814.0

Patrick Strateman having fun : https://bitcointalk.org/index.php?topic=98622.20

Patrick Strateman's only statement on the lost of 400 000 USD of customers fund: https://bitcointalk.org/index.php?topic=95738.msg1054988#msg1054988

How is it that they can organize a conference and work on their intersango exchange / electrum but can't be bothered to update bitcoinica.com or make use of the Bitcoinica mailing list to reassure customers ?

Am I missing something ?

Sounds like someone doesn't realize they're a mushroom  :(

Do you realize you're polluting by quoting whole posts and adding nothing to it ?

I am kind of finding this fiasco hard to believe.  Although, I have only had a few conversations with Amir over the internet, he has been really nice and patient with me during the previous process.  I have never spoken to Prince Patrick, though.

What would be the downfall of signing this document from their POV?  The sooner this shit gets done, the sooner the community can move forward.  Unless I am missing something, I don't even know why these guys would want to be in public around other bitcoin people while all this shit is still up in the air.  It is fucking embarrassing and starting to get just a tad bit ridiculous.  I would have a seriously hard time looking people in the eye when speaking and meandering around the conference.

Please, just sign this thing and let's turn the page.
 

Tihan Seale is who he says he is, according to Gavin. I'm not sure there's much more trust than that to be had in the Bitcoin community.

Let's say, for sake of argument, Gavin said the same thing about me--Bruno. But Bruno Boy is the only known person to have ever met Zhou. That aspect can be put up for dispute.

About the media attending the conference. If any of them are worth their salt, they should be asking very serious questions in regard to Bitcoinica of said three attendees.

Also, I mentioned it once on this thread, and has been echoed in a different way: Iain, the liquidator, should look into Zhou's involvement in Bitcoinica. His actions should not be left off the table.

For what it's worth, thanks, Tihan, for moving this forward. I would love to comment more on this, but I now need to check some edits on this forum.

~Bruno~

I don't understand what the argument is.


There have been no new facts disclosed that change my opinion since I wrote this post, quite a while ago. The least complex explanation that fits all known facts involve no one but Zhou:

https://bitcointalk.org/index.php?topic=95795.msg1065233#msg1065233

With regards to Donald, Patrick and Amir I would just consider them to be in denial, besides being utterly incompetent.

If the reason for Amir and co for not distancing themselves from the conference is in fact that it's their own conference aka "Intersango's Bitcoin conference" you shouldn't ask yourself why the conference wasn't cancelled (next necessary step imo) but what the hell you are still doing there to support it.

On an upside, this conference will give people a chance to confront team Intersango with the issue in person. They really must have balls, I'm telling ya.

Indeed.

I can't wait to see them try and act stupid with a camera shoved in their faces ...

Too bad I am not bothered enough to attend their sham conference and do it myself.

Because they're simultaneously organizing it and the only people participating. So in the sense everyone's allowed to talk in his own living room...

Except you do.

Including you.

The only future you will create is the future news in the Cartmell suit / more luzly drama with the Global Scam Exchange.
Way to go with the partial statements however.

I'm at the conference. There are plenty of people here, more than last year. Boycotting it would be like shooting yourself in the foot.

I spoke with Amir and Donald about Bitcoinica. I don't think it's likely they will help with the liquidation.

You're assuming that the "media" in attendance will even know about the Bitcoinica clusterfuck let alone regard it as worth any kind of in your face questioning.  To date, media reports regarding Bitcoinica and other Bitcoin debacles have tended to be inaccurate and far from probing.  Investigative journalism isn't something we've really seen in relation to Bitcoin.


Zhou's role will be looked at but a liquidation isn't a criminal investigation, although it might reveal criminal actions which would be referred to the Serious Fraud Office for further investigation.  The role of a liquidator is quite specific, and even though Iain McLennan is fully qualified to do all sorts of financial investigations, he can only do the specific work for which he has been retained.  As his fees come directly from the insolvent estate, he's ethically bound not to waste money on matters which will not increase the return to creditors.


It's their right to do that but they need to bear in mind that their choice may have implications which extend beyond Bitcoinica.

There was about 100-150 people at the dinner, which isn't the conference proper, there are over 300 people attending, I'm exhausted already and it's not started yet.

Seriously? One name that's something in bitcoin, say it. Who's there?

Give out free soup in London these days, get 3k people lined up all the way to the next intersection.

Even if you disregard Nefario (GLBSE) and Intersango (libbitcoin), there's Tony Gallippi from BitPay, the guy from Butterfly Labs, Stefan Thomas (bitcoin-js), Pieter Wuille (core dev team), Jan Moller (BitcoinSpinner), Jim Burton (MultiBit), Vladimir (Bitcoin Magazine), Juraj Bednar (he's been promoting Bitcoin in Slovakia), the guys from Bitcoin Austria, and tons of people I didn't have time to meet or whose names I forgot.

I've found the best method to keep track is to get their business card.

I tend to lose business cards. So now I opted for taking pictures of business cards on my phone :)

For a while I was trying to do the v-card bluetooth thing, but it never works.

Of the core dev team there's myself and Pieter (sipa), and I think Nils (tcatm) is coming too.

What ? are you seriously responding to MPOE-PR saying there wont be anybody at the conference ?

Hint : IT WAS A JOKE !

IANAL but I'm guessing that the only document they'd sign is something along the lines of "I do not acknowledge a successful transfer of control of Bitcoinica to myself, so I have no authority to release it into liquidation.  But I will state that I will not contest any liquidation process that does occur"...

In other words, by signing that document as written it looks to me like they would tacitly acknowledge responsibility for Bitcoinica at the time when the hacks occurred...

The document is not requiring them to sign on behalf of Bitcoinica Consultancy Ltd (the general partner of Bitcoinica LP) but as individuals.  As individuals, they have a combined interest of 25% in Bitcoinica LP (which they were given in exchange for Wendon being issued shares in Intersango).  

Whether or not they try to stall the liquidation is not going to affect whether they are found personally liable for the failure of Bitcoinica and/or whether they are sued as Bitcoinica Consultancy Ltd and individually in other actions which are either in progress or anticipated.  It will, however, make the liquidation a more expensive process and result in smaller returns to users.

I think everyone involved with Bitcoinica made some appalling decisions, including Tihan, but the immediate focus needs to remain on the most efficient way of returning the funds on hand to Bitcoinica users.  The bitch-fight about who should have done what and when is for another venue.

Thanks for keeping us up to date on the London conference. Too bad it's overshadowed by recent events. Would somebody be so kind as to PM me the thread dedicated to the conference?

Also, it looks like my questions and concerns addressed on this thread were kindly responded to. Thanks, all, who've reply. And thanks again, Tihan.

~Bruno~

This is what I asked Donald. He declined.

Could you ask them what is their plan to help creditors get their money back ?
It looks like their strategy is to bury their head in the sand, and hope for the best...

They probably won't do anything unless it goes to court.

Because maybe that way they'll get lucky and get to keep everyone else's money.  I wish you all the best in perpetrating one of the biggest thefts in bitcoin history.  Good luck!   :D

To me the biggest problem (among others) was their poor communication and later complete blackout.  Not solving the problem is one awful thing but refusing to communicate with customers is similar to running away with the money,,, That they are still hanging around bitcoiners is mind boggling.

Donald, Amir, and Patrick need to sign this ASAP.


Once they do, it gives Tihan legal right to take action and get things moving forward.

There are still funds the accounts, and I believe much of the legal work is being done pro bono, or paid for personally by a few parties involved.  

Oh, I've met Tihan along with Gavin and many others here many times. He lives in Seattle and has deep roots within his community.

-Charlie

+1

Donald, Amir, Patrick, Please don't bankroll your internal feud with the captive funds of Bitcoinica customers.

In the meantime, let's support them at the conference!  Yay!  Maybe next year pirate can organize the bitcoin conference, or maybe both parties should.  After all, what these guys have in common is that they operated the most successful bitcoin business model to date (the run-off-with-the-money model).

They almost certainly won't.  Fortunately, Tihan is prepared to seek a High Court order to put Bitcoinica LP into liquidation which means that general creditors won't have to.  It will slow the process down, but it won't stop it and liquidators tend to be more aggressive towards non-cooperating principals than they are towards those who actively assist them.

So has anyone done this yet or what?

Yes. It was pretty funny.

You probably find it funny. I assure you that, as a creditor, that's not my opinion.

Unfortunately, my impression is that pleading will not change their position. I tried to talk to them, and exhausted all the approaches I could think of, apart from threatening them. But I'm not a specialist negotiator so maybe someone else will have better luck.

You can't just let that stand in the room. Give us all the nasty details.  :D

That'd count as one (jurov). Get something straight: you're not in the WOT, you're not in bitcoin.

 ::)

There's a lot more to bitcoin than this forum/wot.

Did they ever file an answer to the US lawsuit or are they ignoring that too?

They haven't yet responded to the lawsuit in California.

I spoke with Donald and Amir at the pre-conference dinner last night.  Donald accused me of spreading misinformation and refused to sign anything until Tihan releases him from his NDA, which will allow him to "bring out the truth".  Amir, was pretty stoic, had no comment on the matter other than that he didn't know what was right because he's a "programmer not a businessman", and that he'd do whatever the other guys told him to do.  Patrick was not present.

This morning, I gave legal service of process on behalf of Wendon to Amir and Patrick at the conference venue.  Donald was not present.

I have previously met with Patrick in San Francisco and, while this isn't saying much, he's probably the most sane of the group.  If this document Tihan has offered is going to get signed, it will require Patrick convincing Amir.

I've gotta say, I can't believe anyone who has ever met these guys would trust them with their money, much less someone else's money.

What a crock of shit.  He doesn't care about honouring any of his other legal obligations regarding Bitcoinica, so why does he feel obliged to uphold the NDA.

And yeah, Amir has taken the advice of the others regarding this mess right from the outset.  Unfortunately, when you're "not a businessman" but sign up for the legal responsibilities which come with directorships and partnerships, you're right in the legal firing line along with the actual "businessmen".

^ This.

This is the problem, no one wants to take liability!! No one ever did! Roger and I flew to California to meet with the lawyers, Tihan, Patrick, ect.

This letter that needs to be signed is the result of a meeting between all of us, including Patrick (who fully supported the idea by the way and said he would forece Amir and Donald to sign it)

Everyone at the conference needs to force Amir, Donald, and Patrick to sign this.

So why didn't Patrick sign there and then as a show of good faith?  There is no requirement that they all sign at the same time and in the same place.  I wouldn't rely on promises to "force" the others to sign when they're coming from someone who hasn't signed himself.

The document wasn't ready until recently, but in hindsight we should have done this.

Nobody with any balls worries about breaching an NDA when they're already facing being sued for everything except their first-born child.  Their reaction to everything else legal has been pretty much "BFD", so I don't buy that they're holding the NDA as something sacred.

Patrick is forcing the other two? Roflcopter. Even now they are playing the blame game with each other. Patrick is the most deceptive person of the three as far as I've been following pages over pages of this mess for the past 3 months.

You can't force people to sign things.

When I say force, I mean pressure. Take my words with a grain of salt.


Same here, but what other choice did we have? While everyone on the forum sits around and complaints, we actually wanted to be proactive and try something.


I think the NDA thing is bullshit, they are using "We have an NDA" excuse to brush people away who approach them.

Tihan could easily put an NDA-void in this document, but I don't think it even crossed his mind to do so, if there is even an NDA

-Charlie

So Patrick could have signed this in front of people at the conference to show good faith and yet he didn't.  I seriously doubt that he'll try to persuade Amir and Donald to sign or co-operate with the liquidator either.

I have repeatedly expressed to all parties that I will absolutely cooperate fully with a receiver or a liquidator.

It is genuinely my hope that everybody who is genuinely owed funds will receive as much as possible.

Until I have received competent legal advice on the matter I will not be signing anything presented by Tihan Seale.

Edit: Advice I am actively seeking.

And it continues to look like you're the one stonewalling the whole process, Patrick.

Patrick, maybe instead of "hoping" that customers might see some funds returned, just maybe, you could actually do something to help make that happen instead of doing your goddamned best to prevent it.

Please just quit the bickering and give us our money back, guys.

$500 - I'd be happy with some bitcoin - send to the address on my OTC account. Thanks.

As I'm sure your own lawyer will advise you, it doesn't matter who drafts the resolution.  Your own lawyer can draft one.  It only needs to state that the parties agree to appoint a specified firm as liquidators and be signed and dated.  It's literally a two line statement which follows a standard format.  I very much doubt that anyone owed money cares whose lawyer drafts the resolution, but I'm sure people would support your own lawyer drafting it if it means that the liquidation can finally proceed without even more time being wasted by seeking a High Court order.

It has been over 4 months since the SHTF and this has been 'worst case scenario' at every turn. I can honestly say that in the 35 years of my life I have never experienced such a royal mess as this.

Personally I have 23440 USD in my Bitcoinica account (as well as approx 2K BTC). Have received 0 back so far. Even though no USD has ever been stolen from Bitcoinica (The 40K USD has been returned by Chen) and my claim has been confirmed accurate 3 times. It is aggravating to see the Intersango guys not cooperating and forcing liquidation through high-court instead of voluntary.

They don't seem to care because it is not their money on the line. But the way I see it is they are taking money that could have been returned to creditors and handing it over to lawyers instead who charge 200 USD per hour. To me this is practically the same as stealing. Get your act together guys!

I asked Donald to sign the letter over IM. Instead, he accused me of having 'mental problems' and that he would not sign anything from a sociopath and proven liar because 'this shit runs way deeper' but he does not want to fight the 'FUD' or do anything immoral or illegal. He has now blocked me from contacting him again. If Donald agrees I would be happy to share the full chat logs of my communication with him here so the community can decide who has mental problems themselves.

It is good to see Patrick is at least supporting voluntary liquidation, however he should have gotten legal advice months ago. Amir better make up his mind and stop hiding behind the others. As an idealist/activist with strong opinions on what is wrong and what is right I think his behavior in this case is highly hypocritical. After WWII ended there were also a lot of people that said 'they were just following orders'. Please think for yourself and act accordingly.

That said, I don't hold any personal grudges against any of the Bitcoinica crew. (Except perhaps Zhou if it turns out he robbed his baby after selling it while deceiving the general public because his aim in life is to become a millionaire by the age of 21). In retrospect, clearly none of them should have been running a financial service such as Bitcoinica. Amir has been doing a great job with the Bitcoin conference and I respect him for that. (And looking forward to watching the talks online!)

Please sign the letter. If you don't like it because it comes from Tihan - draft your own and have Tihan sign it. Just don't stick your head in the sand and let those that trusted you suffer. Thank you.

The confusing thing is that they actually won't. All the money is frozen in a Mt. Gox account (minus the conversion fees and exchange rate fluctuations resulting from the July theft). Mt. Gox said that they will only unfreeze it if the legal situation is clarified. The Intersango trio has no access to the funds. Baffling? You bet!

I will be traveling to Auckland in mid-October. If anyone's got suggestions about interesting documents to copy from courts, addresses to check, etc., I'm open to suggestions. A relative of mine is licensed as a NZ attorney (I do not know if NZ maintains the barrister/solicitor distinction) - the relative has a full-time job and is not looking for outside work, so I do not see them getting involved in the Intersango/Bitcoinica fiasco, but I don't anticipate we'll have any trouble finding the courthouse, etc.

In Australia and New Zealand, voluntary liquidations are usually conducted without the involvement of the courts - there are statutory bodies which exist to handle them on behalf of the government and the liquidator reports to those bodies.  An application to the NZ High Court is required to place a business in involuntary liquidation, so it would essentially become necessary if the parties are unable to agree on and sign a resolution to appoint a liquidator (creditors can also make such an application, but it seems likely that Wendon will do this).

Courts do become involved if certain circumstances arise during the liquidation but creditors and shareholders would be made aware of these issues through the liquidators reports.

Although creditors are required to lodge their claims within a fairly short time after the business goes into liquidation, the claims are not generally formally processed until the liquidator is in a position to make distributions - so the initial claim form doesn't actually require you to attach evidence of your claim (although you can) but to describe the evidence you have to support your claim.

It is good to see Patrick is at least supporting voluntarily liquidation, however he should have gotten legal advice months ago.

This.


Patrick, I believe you nothing. All this going on and you still haven't sought legal advice? Are you kidding me? How stupid do you think we are? Not a single word out of your mouth is trustworthy.

Edit: Dear liquidator, I have always said I will fully co-operate! (except I actually won't) Just sickening how much smarter I am than everyone else.

PATRICK,

YOU ARE A LIAR! [/allcaps]

You lied to my face in San Francisco last month,  and now you are lying on the forums.
Stop lying, and help to return the money to the people it belongs to.

Sign the document!

I think they made it clear enough they won't sign.Take it to court already, chaps.

This pretty much, really this is probably going to be the first major bitcoin case to get proven in court, depending on how long it takes to get started, if at all. I would be looking forward to hearing a judges interpretation on what bitcoin is.

I don't think you understand.  All the court will be asked to do is direct that the company be put in liquidation, giving the liquidator the legal authority to take control of Bitcoinica's records and assets. 

Wow. I think people here would be quite interested in reading a logfile of said conversation.

Are you legally prohibited from posting it? If so, could you tor into pastebin and upload it there for ...ahem... plausible deniability?

To me it seems only right and proper after Amir leaked the entire source code, + multiple legal documents,
thereby directly (or indirectly) causing the latest theft and halting payouts.

if it goes to court what is the possibilities of all three of them having to pay more due to negligence and punitive damages.

Hello all,

I was at the conference on saturday and it was a really nice event (even though a bit on the utopist / political leftside).

Met quite a lot of very interesting & bright people

I had extensive discussion with Amir & Patrick at the bar where the 8 bit event or whatever was happening, and as I dont really like to disclose "private" conversation I wont say anything here about this.
If anyone wants to talk to me about that I am on skype (search emilien dutang)

To the personn that presented the liquidation paper (I did not see that) I initially intended to distribute public relations tracts with info on the bitcoinica mess at the conference then did not felt like it as I did not want to be a "party crasher" and as Amir & Patrick willingly did extended discussion talk with me about the issues at hand.

I dont want to disclose stuff here as I still need to make up my mind.
I still think I can safelly say that Amir will follow whatever Patrick will do / decide.

Regards,

Emilien

"Going to court" in this instance simply means that the court will direct that the company be put into liquidation.  This isn't a lawsuit.  A liquidator can find that the principals were negligent in their actions and have personal liability in respect of the company's failure, but liquidators cannot commence legal actions unless there is substantial reason to believe that doing so will result in further funds becoming available for distribution to creditors after the costs of any such actions have been accounted for.  No liquidator is likely to commence a cross-border legal action against someone who has no substantial assets.

Even if this was a lawsuit, awards of exemplary damages are rare in Commonwealth countries.  The highest award of exemplary damages I've been able to locate in New Zealand was NZD 85,000.  Likewise, costs awards are typically only for about 60-70% of actual costs incurred.

Other people can use the liquidator's findings to support lawsuits in other jurisdictions, though, and that will almost certainly happen.  For a number of reasons, those lawsuits are going to be complex and costly if actually fought so I wouldn't expect any to go to trial.  

In semi-related news, Zhou incorporated NameTerrific on 24 August. 

So, now that the Bitcoinica/Bitcoinica Consultancy/Bitcoin Consultancy guys are done with the conference...remember how they mismanaged like hundreds of thousands of dollars worth of bitcoins and, er, dollars and still, as far as anyone knows, have yet to give the vast majority of everyone's wealth back?

Or, with the passage of so much time and the hosting of such a groovy conference, are all those guys, like, cool with everyone now?

i am not cool with them

at this point i just hate phantomcircuit for doing NOTHING for their(!) customers.

Everyone involved hates them with a passion I'm sure, but life must go on. I don't understand why not more people try to warn their intersango customers of their business practices though.

All in all, I don't think these suckers, Zhou and the conference supporters realize that letting this one pass sustainibly hurts the bitcoin community. In regard of Asic pre-orders some even claim there is no such a thing as a community anyway if rich fuckers get to pre-order 30-300 units and are given absolute priority.

The heists and hacks, the switch to custom hardware that can't be sold again for non-bitcoin related products (taking away hedging against total SHTF scenario) have convinced me that I will probably not jump on the ASIC bandwaggon and leave Bitcoin altogether. For good. I lost quite a bit of money at Bitcoinica, I don't see how people could have trusted Pirate other than being led by greed. To sum it up, it's a greedy, untrustworthy community full of thieves who are either unwilling or unable to secure their shit. Someone should write a white paper about that.

Personally, I will try my luck with litecoins now even if it may not better but at least I don't have to send money to anyone months ahead before receiving a product that may or may not be a good mining machine when it gets finally delivered. It is interesting to see how much some Bitcoiners detest litecoins (esp. at the conference as far as I read). All the more reason to support it now. Best side effect: Bitcoin difficulty can go up to hell and back. New people, new chances - ltc is in nothing inferior to btc technically and perhaps it represents some of the ideals of decentrality much better. I already know there won't be the same narcicistic assholes there as there are in the Bitcoin crowd that made me lose a lot of money.

i did ;) but i dont like to repeat myself


+1


i see a difference their.
intersango still claims they are honest.
they just refuse to communicate and to take care of their customers.

i'll jump on the asic wagon ;)
for me bitcoins are still fun


litecoins will not help to avoid scams.

but as i said: there is a difference between a scammer who runs and intersango who still runs a businness.

+1
 Really, what if it (the chips) is also cheating? I do not want to repeat my mistake. Here no man Entrust. I opened a fund for co-financing of the Russian-speaking users (in my signature), but I have to warn of a possible fraud.
 It harms the image of the project, but it is inevitable. Of course, I'm not ready to buy LTC, but I'll do it if it will be as popular now BTC.
 And,fuck, where my money?

This is what I find so disgusting about the Intersango/Bitcoinica Consultancy crew.  They effectively said, "Yeah, we lost a lot of your money, we have a bunch of it still but getting it back to you is turning out to be really hard and it's giving us a headache, so we're just going to go over here and do something else.  We cool?".

They damn well better be disallowed from becoming members of the Bitcoin Foundation.

Is Intersango guy are trying to eat our money and refuse to pay back us?

Well, not to forget Zhou is running a business again, too.

As far as I'm aware, everyone's funds are currently in a frozen MtGox account which can't be accessed by anyone associated with Bitcoinica.  What the Intersango guys are doing is refusing to sign the paperwork which would allow Bitcoinica to be put into liquidation without a High Court order.

I think tseale and his gang should release intersango guys from their NDA.

For what point? genjix violated the NDA already anyway by leaking those e-mails (not to mention the bitcoinica source code).

If tseale ever accomplishes whatever legal paperwork is necessary to give customer funds back, I'm still curious about how he plans to process bitcoinica deposit claims without the database. I'd like to know if the Intersango guys gave him their progress on claims verification or if they are holding it from him.

At first I though the "inaccuracy" of the process was what made this so lengthy.  The current state is that Intersango guy did what they "though" was the best and stopped everything.  So now what was the best to Patrick may not be what is the best for the person taking the process over.
 Unfortunately it would seems Intersango / Bitcoin Consultancy guys are planing on using the "progress data" in hostage for protecting themselves from the numerous error they made afterward.

Maybe they think they should be paid for having handled the process half way.

I would like to remember you that the Intersango's are not the only responsible for our problems.  From Zhou to Tihan everyone who delegated the responsibility of our accounts and fund had a duties of doing so correctly.

We haven't even been notified by email of the transfer of ownership or allowed time to withdraw our funds.

Tihan and Zhou have with some success been able to defend their point while the ones at the center of it refuse to even make a statement.

I am counting every hours I spent waiting for constructive actions from Patrick Strateman, Amir, and Donald and they won't get away with it if that wait amount to nothing more than an empty stalling tactic.

We do know that Zhou had access to the database during the original refund process so it's possible that Tihan or Zhou had a complete copy of it.  we know that Zhou has at least a partial user list because he used it to spam Bitcoinica users about NameTerrific. If Wendon doesn't have access to the database, that's one of the things first things the liquidator will look to obtain from the Intersango guys - taking control of all company records is one of the first duties of a liquidator.  Patrick has said he'll co-operate with the liquidator - I guess we'll just have to see how that pans out with respect to user records.

There's no question that the High Court will make an order for Bitcoinica to be put into liquidation.  Tihan will have nothing to do with the distribution process beyond co-operating with the liquidator when requested (identifying the MtGox account and any other accounts in which funds are currently frozen would be an example of this).  

I filed a claim on day one, but never received Zhou's infamous "I-swear-it-wasn't-me" mail, so I don't think the claims db was his source.

eh?
do you mean you filled a claim and did not have a bitcoinica account?

They didn't have off-site backups of their database, hence the whole claim process. Only some users could be instantly verified by older backups and reports they still had.

Definitely. I'd say 95%+ probability that it was Zhou who did the last theft using the LastPass password. I think he only found out the source code was leaked five days after the fact (source leaked on monday, theft happened on friday). And it was on top of the prior theft due to bitcoinicaconsultancy's email being breached (and intersango crew still tried to blame that on zhou). So zhou was doubly mad already, then decided to check if they had changed the LastPass password he gave to Tihan.


I'm not sure what you mean here by "database". The database was on RackSpace and it was deleted, no current copies existed at the time. Zhou only had some old copies (he never said how old because that would've made it easier for people to file false claims). That's why Intersango had to reconstruct it from blockchain deposit records, mtgox code records, and claims filed. If I remember correctly, they said they believed they had verified 80% of the funds to valid claims but they were still in the process of collecting more information from claims filers before SHTF. For example, I filed my initial claim but then later sent them my mtgox deposit code when they requested them to their claims.bitcoinica@gmail address (or whatever it was). So there was a lot of still-in-progress work on verifying the claims which was being done, and still remains.

Its rather lucky that there was so much stability around $5 prior to the hack. Had there been some volatility, there would have been much incentive for users to file false claims with respect to positions they had right before the hack and they would have been difficult to falsify. Claims like "I made a 10k BTC deposit" two days before the hack are easily falsified by lack of blockchain or mtgox code records.


Best case outcome would be for Intersango to turn over all their records (claims by users and all additional info sent) and the progress they made. Then for MtGox to continue handling the claims and payouts (they already did this once when they bought the polish exchange bitomat.pl after all the coins and data there was lost).

Donald, Patrick and Amir have not signed the resolution to appoint a liquidator. They have provided no reason for refusing to do so.

Bitcoinica's investors have been forced to file an action with the High Court of New Zealand. A hearing has been scheduled for Nov 1.

It is likely that this must be the first of several hearings, separated by weeks or months. Unfortunately there is little that can be done to expedite the process without cooperation from Bitcoinica's managing members.

http://bitcoinica.com/

Patrick being a smart-ass, I assume.

MtGox was only able to do that because they bought bitomat.pl.  They have no legal authority to takeover the payout process for Bitcoinica and nor can that authority be granted to them by the LP if Bitcoinica is insolvent - not that anyone in their right mind other than a liquidator would touch the payout process at this point.  Anyone who turns records or funds over to anyone other than a liquidator at this point is leaving themselves wide open liability-wise - which is why Gox won't unfreeze Bitcoinica's MtGox account until legal authority to access the funds is established.

Yeah, hilarious. Why is this guy so spiteful against his customers?

The Google cache of the previous version is still up, just in case some of the statements made earlier on this domain can be used in court (e.g. 'all withdrawal requests will be honored', etc.):
http://webcache.googleusercontent.com/search?q=cache:bitcoinica.com&hl=en&prmd=imvns&strip=1

The original site was hit with a substantial DDoS attack while hosted at rackspace.

The news site has now been moved to linode as Bitcoinica has a fairly large credit there.

The list of no updates is genuinely an attempt to notice people that someone is still alive at bitcoinica but that there is actually nothing new to say.

We're all waiting on the proper legal process to go forward.

I see. thanks for the clarification Patrick. It looks like I have misinterpreted your intent here, my apologies.

That said, I would prefer if the original statements made by Bitcoinica on bitcoinica.com would have remained available until this case is finally resolved.

Thanks for these updates, genuinely appreciated.

Can you say anything more about the "proper legal process"? Is that the Nov 4 court date which tihan has announced?

bump.

I heard that court papers were served at the London Conference to Amir, Patrick, ect.. and Donald ran away and didn't show up for 3 days.

Can anyone confirm?

There's a post here somewhere by one of the people at the conference.  What they were presented with was the special resolution necessary to dissolve Bitcoinica and put it into liquidation voluntarily (ie, the document in the OP).  Apparently two of them just outright refused to sign (Patrick posted that he wouldn't sign it without legal advice - my response to his post stating that was that he should get his own lawyer to draft a special resolution if he didn't trust Tihan).  I think it was Donald who wasn't around when Patrick and Amir were approached to sign the paper, but I don't recall anyone ever mentioning whether he was finally presented with it.

Have they filed a response to Cartmell yet? 

Not sure about your latter question.

It's really bullshit. Back in July, I met with the largest creditors (Roger, Jed, ect..) and I also met with Tihan and Patrick Strateman. to try and see if I can mediate a resolution (I have no personal or business stake in the matter- we have no money on Bitcoinica )

Patrick S. gave Roger and I his word that he would cooperate on this 100%, and that he would sign and get the others to do the same.
He sat in the cafe, looked into my eyes and gave me his word.
The letter was presented to them monts ago, and they have playing games every since. Threatening and beating around the bush.

Donald ignores everyone, Patrick acts like a child, plays games, ignores emails, and Amir is more ignorant then a pet rock.

It's a 1 page letter, that a lawyer can look over in 5 minutes, its not a difficult piece of legislation.

Tihan has been paying for all legal costs out of pocket.

Donald, Patrick, and Amir are the cause of you guys not getting your money back. They are delaying everything and constantly pushing it off.

I want to see this resolved, and have traveled to Seattle and San Francisco (I live in NY) two times thus far to meet with everyone and get this resolved.

This is probably the first time this information has come to light, and I can write pages on what has been going on the past few months.

This week, I am traveling once again to the west coast. I'm not sure what else I can do, the ball is in the court of Intersango team.

-Charlie


Oh, Donald was there. They had to chase him around the building, and then he disappeared and didn't show up the the conference for 3 days.

I'd certainly hope that your lawyer is keeping you up to date on this.  Isn't there a case management conference set down for early next year?

Motion to dismiss filed 10/12/12

http://webaccess.sftc.org/Scripts/Magic94/mgrqispi94.dll?APPNAME=IJS&PRGNAME=ROA22&ARGUMENTS=-ACGC12522983

Not sure, I have no money in Bitconica nor official capacity here.

My apologies.  I presumed that you must have some personal interest given the amount of effort you've put into trying to mediate this clusterfuck.  Although given that you have put in that effort and continue to do so, it would have been courteous of the parties involved to keep you informed of where things are at from a legal standpoint. 

Considering that Bitcoin needs new blood to grow and increase in value, one fuckup for one bitcoiner reflects as a failure of bitcoin as a whole.

No worries. I have no direct personal nor business interest in the matter. I have friends and investors that lost alot of money, this whole fiasco has made my job promoting Bitcoin to the world harder, I really want everyone paid back, this put behind us and Donald, Amir and Patrick exiled from our community as fast as possible.

I'm kept up to speed as much as legally allowed (since I have no legal interest, there are things I can't know) but since I'm friends with, have done business with, and are on good terms with most parties involved, I was looked at the neutral mediator in this situation and asked to do it.

However, I'm sorry to say that my patience is running out. Donald, Amir and Patrick are pulling my strings taking us all for a ride for their personal gain. They are the only ones to blame. Lawyers involved are on the verge of quitting, why should they have to deal with incompetent children like Donald, Amir and Patrick?

I've spent to much personal dollars on this already, I'm mentally stressed and no one is to blame except for myself as I took on this role.

The worst part is the lack of respect Donald, Amir and Patrick have for you, the community, and myself. They are sitting back, and laughing at this whole thing. They don't care about you, or your money. They don't care about Bitcoin and it's future, they only care about themselves.

Please, they don't even read this thread! You think they still give a shit?

We need to rise up against them in unity!

-Charlie

Yeah, there's so much cross-investment in Bitcoin enterprises that I sometimes lose track of who holds interests in what businesses.  I forgot that it's Roger who holds an interest in BitInstant rather than you holding one in MemoryDealers.

Roger Ver is a major investor in BitInstant citation (http://betabeat.com/2011/12/brooklyn-based-bitcoin-startup-bitinstant-raises-seed-round/).

Charlie has a direct financial interest in Roger Ver being paid, even at the expense of other bitcoinica customers.

Which is exactly what Roger Ver asked for

Nice dirt.

It's not the first time similar stuff has come up.

https://docs.google.com/file/d/0B_ECG6JRZs-7SXFtdG1QXy1uSnM/edit

https://bitcointalk.org/index.php?topic=99222.msg1085617#msg1085617

So what? These were Rogers assets, nothing to do with BitInstant


Prove it.

I have no financial interest in Roger being paid. This is his money.


This is exactly what you promised Roger and myself when I met you.

All this was prior to the stupid fuck up by Amir who posted the source code and password. All this was pre that hack.

You guys screwed up 3 times. Dont blame us.

The fact remains the same. Look at the circumstances.

Come up with a solution, but hurry up. People are waiting on their money and it's not fair.

-Charlie

To be clear,

I offered to give up %100 of what I was owed, along with 3 other creditors so that everyone else would receive back %100 of their funds immediately.
Instead, Amir posted the source code causing additional money to be stolen,  and no one has received any of their money back yet.

Patrick (PhantomCircuit) has lied and stalled at every step of the way.
He is directly responsable for the delays,  if he would cooperate, everyone would have already had the vast majority of their money back.

He has also made personal threats against myself, and resorted to verbal insults towards his other customers.

Any legitimate businessman would not resort to such tactics.

How is it that phantomcircuit STILL doesn't have a scammer tag??

That's an excellent question.

Yes, what the fuck is wrong with this forum?

I think someone around here fucking respects him.

Who?

My vote is still on the creation of an "Utterly incompetent" tag.

I don't care if they were part of an inside job or not.  The fact is, they had (still have?) control of MY MONEY (USD and BTC) and did not give ANY of it back despite repeated requests and proof of ownership.  If that doesn't warrant a scammer tag for these guys then what on earth does??

Thanks. This is way more informative than the "No updates" on the bitcoinica.com frontpage.

I'd like Patrick Strateman to explain these motions, and his wishes and expectations of the other parties (Tihan Seale) in order to get customer funds returned.

Roger, I've been extremely critical of the Intersango guys and the way they've handled this clusterfuck for a very long time but even I don't buy the idea that the Bitcoinica MtGox account was breached because Amir leaked the code.  Are you telling me that you seriously believe Zhou's explanation of the MtGox breach and how someone who just happened to have his credentials (but who doesn't read this forum) also just happened to come across the leaked code and then also happened to think that the MtGox API keys might be a password to something else?  Seriously?  Because given Zhou's ridiculous story about the MtGox breach, I wouldn't even trust his explanation of the Rackspace breach.

There are plenty of legitimate grounds on which to criticise the way that Donald, Patrick and Amir have handled the whole Bitcoinica disaster.  Let's not damage our own credibility by pretending to believe in the absurd.

+1

The fact that Intersango guy have not yet been able to communicate coherently has helped Zhou get away with it.  They haven't investigated or raised the hint of a doubt about Zhou's story.  IIRC they didn't even cooperate with Tihan/Murck when it was time to receive the stolen funds from Zhou.

There are still many hundred of thousand $ not recovered from last CHEN/ZHOU theft.

Can't blame a guy for asking his money back.

However I can blame the custodians of our money for not acting in our best interest.

After Bitcoinica was sold and became a registered financial services provider Zhou (a minor) should have had his access to customer funds revoked. Backups should have been made. Reasonable security measures should have been in place. The ToS should have been respected. Thefts should have been reported and investigated. Efforts should have been made to recover funds. Customers should have been informed through proper channels. Promises should have been honored. None of this happened. The anger towards Donald, Patrick and Amir is justified. They might be victims in their own way but their actions have willingly victimized many more. Not a day goes by where I am not reminded of my unfortunate decision to put a large chunk of my savings in Bitcoinica.

By Zhou's own admission, he was paid a lot of money to continue running Bitcoinica after it was sold and retained the profits Bitcoinica made between the time of the sale and January.  He continued to be paid to run Bitcoinica up until the Intersango guys were brought on board, and the emails leaked by Amir show that Zhou was only asked not to take a salary after Amir, Donald and Patrick had agreed not to take salaries until Bitcoinica's financial mess was sorted out. 

Zhou's credentials should absolutely have been revoked the day that the Intersango guys took over the management of Bitcoinica.  It's absolutely standard to revoke existing credentials and issue new ones.  The emails show that at the time the Rackspace happened, the Intersango guys were not considered "up to speed" on Bitcoinica, which is probably why Zhou still had managerial level access.

They should have never taken on the task, at no time did their involvement with Bitcoinica surpass a lukewarm status. As if it's not a million dollar responsibilty, they wanted to make easy cash on the side giving their expertise. In the end greed fucked up everyone, on both sides- intersango and investors alike. This so called community is poisoned with greedy bastards and unaccountable snakelike entrepreneurs winding their way out. Anyway, intersango have contributed a great deal to fucking up the entire bitcoin project for many.

Sure, there's no doubt that Bitcoin Consultancy was actively looking to be taken on board as security consultants for Bitcoinica after they discovered a flaw in the code which allowed the hot wallet to be emptied.  They admitted that following the Rackspace hack.  The emails leaked by Amir also seem to point to a vision of developing a "super-exchange" to rival MtGox, and merging the interests of Intersango and Bitcoinica probably seemed like a good way to accomplish that after TradeHill failed.

If the timeline given by the parties involved is correct, then it was a pretty short one and I suspect that there was way too much haste involved on all sides - something which set the scene for later disaster.  I think that every one of the parties involved sees themselves as a victim of at least one of the other parties and that at least some of their grievances are legitimate.  The real problem is that users became the victims of a ridiculous stand-off and that's pretty much destroyed any sympathy people might have had for the legitimate grievances of the parties involved.  I think that by the time the whole truth about the collapse of Bitcoinica comes out, the community will be beyond caring and no-one will end up feeling vindicated.

Wow, you have my deepest respect. It's so unfortunate the intersango trio managed to fuck it all up. 4th fuckup and counting. How many more to go? :(

That sounds like an acurate description of the psychology of the participants that caused the current state. And if you replace Bitcoinica with GLBSE it is exactly the same.

Now that's pretty damning. Standing up for some scammers here, having gay spats with some other scammer re glbse, I guess the forum needs a pr department.

considering other suggestions made by forum staff, and specifically theymos, I'm sure he should save the funds for a legal department, instead.

I hear Comrade Nefario has experience in PR  8)

I've been away from this for quite a while, and unfortunately it looks like I haven't missed much...  Assuming all goes well with the liquidation, is anyone else still concerned that all our claim information is lost?  Getting the money freed up is a huge step in the right direction.  However, how will they know who to give the money to once they have it?

Yes, please comment. Remained whether the liquidator base refund? (liquidator has the old claim database?) or will be made up a new one? I live in Russia and can not come to court, can I count on the return of my money?

One of the first things a liquidator does is take control of a business's records.  They'll also contact all listed creditors to inform them of the liquidation and to tell them how to submit a claim (in NZ, you usually have about a month in which to do that).  There's a standard claim form and it's very short.  
It's really important that you submit your claim in the time-frame required by the liquidator - it may not be considered if you don't - even though claims aren't typically formally processed until the liquidator is ready to make disbursements. The second liquidator's report is usually issued once all claims have been received and it's when you start getting a better idea of the liquidator's timeline for the liquidation process and what kind of returns might be possible, if any.  All sorts of things can prolong the liquidation process so the initial timeline given is really just a best case scenario guess.

It should be a little bit clearer after tomorrow's High Court hearing just when a liquidator is likely to be appointed. 

Update : https://bitcointalk.org/index.php?topic=121474.0

http://webaccess.sftc.org/Scripts/Magic94/mgrqispi94.dll?APPNAME=IJS&PRGNAME=ROA22&ARGUMENTS=-ACGC12522983

The plot thickens.


http://www.transparency.net.nz/2011/04/07/receivers-show-5000000-error/

Interesting.  I wonder why the change in the choice of liquidator.

http://www.business.govt.nz/companies/learn-about/closing-a-company/business-in-difficulty/liquidation/what-happens-during-a-liquidation

http://www.drpixel.be/wp-content/uploads/2009/11/pr.jpg
Pretty much sum up how I feel looking at Bitcoinica.

How were these liquidators appointed ?

You may be right that Amir open sourcing the code did not lead to the second hack,  but it did destroy the one asset that Bitcoinica still had that could be sold to pay back all the creditors.  Amir destroyed that option when he posted the source code.

Why are we even considering whether it did or it didn't in this context ? Fact of the matter is the guy published the code, fact of the matter is the code did contain enough information that a person could have done what Zhou alleges (improbably) to have been done. This is absolutely sufficient to hold the three stooges to the fire as if in fact they did it.

The only place where consideration of whether Amir publishing the code lead to the second hack or didn't lead to the second hack finds its place is when we judge Zhou, in the sense that he doesn't get off the hook just because we're spit-roasting Amir & co. But other than that, he who left the safe keys on the urinal at the corner bar pays for all items stolen and all damages. Irrespective of whether the thief is ever found, prosecuted, tried, convicted, ordered to make reparations, actually makes reparations etc.

It's probably also worth noting that the idiot releasing the broken, defective, untrustworthy, malfunctioning, general piece of shit codebase has the unfortunate effect of creating this crap (https://bitcointalk.org/index.php?topic=119745.msg1289600#msg1289600).

Great, now my brain hurts. How could.... How would one.... This is too absurd.

As alluded to elsewhere, Wendon Group's petition to the New Zealand High Court to commence formal liquidation was approved on Nov 1. This comes after significant effort and legal expense for which Wendon Group has donated 100% of the cost.

The court appointed the principals of PKF Corporate Recovery & Insolvency to administer the liquidation. It will be their job to return funds to customers to the full extend possible. They will require the cooperation of MtGox and Bitcoinica's managing partners to accomplish this.

My expectation is that the liquidator will reclaim all records and assets, including the Bitconica.com domain name held by Mr. Strateman and make further updates available there.

Among Bitcoinica's managing partners, Patrick Stratemen has been the least uncooperative. As he makes good on his promise to assist the liquidator, please extend him the degree of respect he deserves.

Will someone please explain how the liquidation might work? What documentation, proof, etc. will someone need to make a claim?

I expect that the liquidators will clarify the kind of supporting evidence they require when they make contact with creditors and/or post notice of the liquidation on the Bitcoinica website.  The first creditors' report - which by law must be completed within 25 business days of the court appointing the liquidator - will contain a notice which advises creditors of the deadline for lodging claims and a claim form as well as information on how to contact the liquidators.  

It is up to the liquidator whether they require you to submit supporting documents when you first make your claim or whether they just require a description of those documents when you make your claim and ask you to submit the documentation at a later time when it's more apparent whether a distribution is likely.  Make sure that you read the claim form carefully and understand whether or not you need to submit supporting documents with your claim.


That presumes Bitcoinica LP actually owns the IP and the Bitcoinica domain, which 1) may not be the case (I sure as shit wouldn't have set it up that way) and 2) assumes that there is no secured interest in those assets or that anyone holding a secured interest would have waived that interest had those assets not been devalued (which ends up being a he said/she said scenario).  

That the assets are now devalued is beyond doubt.  That they would have been available to satisfy the claims of all creditors is a matter of conjecture.  

On another note, unclescrooge is using the Bitcoinica source code for Bitfinex.  Either he's using it without permission of the IP owners or he's using it under licence.  Either way, some return to the liquidation estate for its use is in order.

I don't think it's the time to figure out who's fault it is for everything.

I'd like to concentrate on understand what the liquidation process entail and I'm still not even sure it's the best way to deal with this,  If creditors, Intersango, Tihan, and Zhou cannot talk and come to an agreement on who's responsible for what and process payout to their best, I don't see how an appointed 3rd party, no matter how independent and competent can achieve better results.

I don't know in what fantasy dream many of you guy think you're living in, I for one learned not to expect much of our judicial systems.  

I can accept some loss but I will seek revenge if being lied at for months on end.

There is simply no way some of you will get absolved from this without a full disclosure.

I've had a few back and forth between Tihan and Patrick, each claiming the opposite of the other and trying to convince me the other was lying.

There was supposedly 62101 BTC of stolen fund to be covered by LP,  43554 BTC for Linode hack + RACKSPACE 18547 BTC = 62101,
Tihan confirmed he only paid 25000 of this, leaving another 37101 BTC missing.  That was supposedly the reason why Patrick didn't wanted to pursue returning funds anymore (unless funds were covered).
Patrick say even that this 25k BTC return is complete BS.  Tihan couldn't provide proof of transfer, stating there is no trace of inner Mtgox transfer.

Tihan said he doen't want to circulate any estimates that might not be strictly accurate but the full details at his disposal will be made available to the court's appointed liquidator when the time comes. According to him , Given the legal sensitivities, that can be their only official communication channel going forward.

Whether or not liquidation is the best option, it was literally the only remaining option available given the inability of the general and limited partners to come to an agreement about how to discharge Bitcoinica's financial obligations and wind up the partnership.  The process which a liquidator must follow is laid down by law, so the issues of contention which plagued the DIY process which was implemented after the Rackspace intrusion are irrelevant.

The only estimates which matter at this point are those given by the liquidator and even those will inevitably change throughout the liquidation process.

Transisto, that is an understandable misinterpretation of what I said but not 100% accurate. It is for this reason that we will be communicating with the liquidator on an factually-verifiable basis going forward.

Hope I can somehow be helpful for the revenge. I want revenge, too. The bitcoin economy cannot let scammers run away with people's money so easily. After the liquidation, we will know better about whom should be blamed.

by the way, for the liquidation, is there a need to resubmit the claims or do they still have access to the submitted claims ?

maybe if you have usd dollars there you might eventually see something, but if you only had btc which most people did as it paid more interest I guarantee you won't get anything

Actually, it was USD that paid more interest.

The liquidator should have access to what's been submitted already, but as claims against an estate in liquidation are required to be made in a prescribed form laid down in the Companies Act, I expect that creditors will need to submit a fresh claim to the liquidator. 

I don't know what qualification are required to be a liquidator but I wonder if the complexity of the case require we make an effort to find better.

I checked the qualifications of the two appointed liquidators.  One is a chartered accountant (over this way, liquidators are almost always chartered accountants) who also holds a law degree and the other worked for the Official Assignee's office for over 10 years.  They're well qualified.

As liquidations go, this one isn't especially complex.

While creditors can apply to the court to have a liquidator replaced, you need solid reasons for asking the court to replace the liquidator and nothing involving the High Court comes cheap.  One risk of trying to get a liquidator replaced is the Court appointing the Official Assignee as liquidator.

Thanks for filling in the blanks along the way.

At least 3 of us have tried to contact the liquidators, no answer.

What should liquidators be doing at this point ?

At this point they should be taking control of Bitcoinica's records and assets.

The liquidators must issue the first report to creditors within 25 business days of the company being put into liquidation - so by 6 December 2012 (I can't recall if NZ has had any public holidays in the last few weeks).  The first report to creditors usually has a claim form attached, advises the date by which claims must be lodged and gives information about how to contact the liquidator.

Here's an example of what a first report looks like (prepared by a different liquidator than the company which is handling the Bitcoinica liquidation but the basic requirements are essentially the same).

http://www.mvp.co.nz/media/reports/Active+Heating+Products+and+Services+Limited+(In+Liquidation)/first%20report.pdf

The liquidators should definitely be responding to contact from creditors, even if it's only a formula response saying when the creditors report will be issued and the date by which claims must be lodged.  If they aren't responding, I would keep a record of all attempts to contact them and I would probably contact them again specifically requesting a claim form and information about the cut-off date for claims.  "We'll get this information to all creditors by the first week of December" would be a reasonable response, but no response at all is simply unacceptable.

I have no idea how it actually works in NZ but it may be the case that until such a time they've actually acquired the company books they're not held to answer to anyone's mail, whether they claim to be creditors or not. Obviously an auto-responder or something would be a lot nicer than just silence.

Thanks Repentance. I really appreciate your continued support and insight in this affair! I also have not received any response yet from the Liquidator.

As to the creditor report & claim form. Is this typically sent to creditors by regular mail? Or might they send it by email as well?

I'm asking since I recently moved and am unable to update my records with Bitcoinica (for obvious reasons).

part of nothing is still nothing. The likelihood of getting back either USD or BTC seems pretty remote....there really can't be much left after the owners liberated (Liberty Reserved?)  most of our money.

Would surprise me if I got back 1% of my USD.

I finally got a reply from the Liquidator after a new attempt to contact them following the instructions posted by Repentance. I got permission to post it here:


and


If you are a creditor you can contact Taslim directly at Taslim[dot]Bhamji[at]pkfcr[dot]co[dot]nz (please be civil)

It depends on the liquidator.  Some set up an online claims process and some don't - I'd be a little surprised if they didn't in this case because the window for lodging claims is often quite short and nobody's going to want to deal with the headaches of lost or delayed snail mail.  Very often reports to creditors are made by email these days, but I'm pretty sure that you can elect to receive them by snail mail.

I admit that I'm very curious to see who waives their claims in liquidation and to what extent - it will have a significant impact on the funds which will be available to the liquidator for distribution to unsecured creditors.

It's probably worth pointing out that although some liquidators ask for proof of claim to be submitted with the claim, the claims aren't generally formally validated until the liquidator is ready to make disbursements.  This is to save on liquidator fees.

Also, perhaps you could email Taslim back and advise him to ask the mods to be whitelisted.  He won't be able to post outside Newbies otherwise.

Also, can I suggest copying your post with the liquidator's reply into a new thread with an attention-grabbing title which makes clear that the liquidator is seeking contact from Bitcoinica users (maybe "Bitcoinica liquidator wants to hear from users" or something similar).  People have become jaded by these old threads going nowhere so they might not check them for updates.

Done and Done. https://bitcointalk.org/index.php?topic=126847.0

Always look on the bright side of life: maybe there's enough to cover most of the liquidator's fee.

It's not going to help that the funds taken during the MtGox intrusion were returned largely in $.

40,000 BTC and USD 40,000 went missing.  At today's price of USD 11.70 that's a total of USD 508,000.

According to Patrick Murck, USD 100,000 and 20,000 BTC were returned, for a total of USD 334,000.

Of course there are still funds frozen on AurumXchange which Zhou said on the one hand belonged to a friend and on the other hand said could be returned to MtGox.  God knows whether AurumXchange will release those to the liquidator given that Zhou claimed they weren't his.  And we don't know how much was in the MtGox account at the time of the intrusion (but presume that it was roughly enough to cover claims at the rate of USD 5 per BTC which was applied when the refund process began).

So, is it time to send the same emails we have received from Bitcoinica and the emails about the claim process to above address? Or is it still too early for that?

What is meant by creditors? People who had money or Bitcoins on bitcoinica?

They don't know who is owed money so you need to contact them.  They've asked for evidence of what you're owed so send them whatever you have which helps establish that.  Yes, a creditor is someone who is owed funds by Bitcoinica.  They may have creditors apart from Bitcoinica users.

How do we contact them?

Taslim[dot]Bhamji[at]pkfcr[dot]co[dot]nz

It's probably best to look for updates in the new thread which ninjarobot created as that's specifically about the liquidation and the information the liquidator needs.

https://bitcointalk.org/index.php?topic=126847.0