Bitcoin Forum

This sits in "Securities" rather than my usual lending section thread because it is a little more aggressive in approach and not as reliable.

Based on some work I have been doing I believe there is space for this particular fund and because it is a little different labelling it Kraken seems appropriate.

Basic parameters:

• Fund commences 19 August 2012.  
• Investments may be made in multiples of 100BTC.
• Withdrawals may be made in multiples of 100BTC.
• Contributed capital is backed by my personal funds.
• Returns will be paid weekly (currently planning on Fridays) - no compounding or automatic reinvestment.
• Target and maximum return 2.5% per week. (for the ponzi people, that would be 361% annually, but it's only 130% because it is non compounding.)
• Minimum weekly return 0% - any losses will be funded personally.

You will need to request a unique deposit address and supply a unique return address.  I will have a sensible limit on the number of investors because I don't want to spend my whole life doing weekly payments.
Returns obtained over and above 2.5% are taken as my fee - that's how I can afford to support the minimum return and "insure" the capital.  If I have coins sitting idle, they don't lose money, but impact on the average return.

Obviously the question is "What am I doing with the coins?"  
If I was to provide a simple answer like buying 50 BFL singles and going mining, or putting 10,000 coins into XYZ asset on GLBSE then there wouldn't be much science in that and it would ruin the market that I am looking at.
Also, I do expect people to assume funds might simply be going into BS&T and accuse me of feeding an illegal activity.  Due to the vitriol that goes with that, this will not be an open thread because there will be no point debating that.

So what am I going to use funds for?  Some will be going into my "vulture" capital business interests, some into some long-term BTC investments I have held in real-life ventures (such as an equipment manufacturer), some in BTC assets, a small amount of futures trading, some into various risk/reward adjusted investments that are available in the bitcoin world.

Edit: Currently 25 registered users.  18 currently paid.
Edit 19Aug: The largest commitment made was 1000 coins, and that was before the closure of one of the largest (and smartest) BTC operations.  In fairness, I consider a 1,000 maximum per account is appropriate making the absolute maximum size of Kraken Fund 25,000.

Kraken Fund#2 wait list (several):
HonsetBob, Rolo TonyBrown Town, BinaryMage, aghori, EskimoBob, Onichan, LoweryCBS, coinft, Mousepotato, Goelmer, CecilNiosaki, bruiser, Gigavps, "pm page 122", Electricbees, Macboy80, Brunic, Coin.Karma, Litecoin, Simonk83, DeadTerra, mb300sd, ScottJ, REF, nave, Soros Shorts, ShadowAlexey, Cobra

Patrick defaulted @50% on capital, breaking a few terms of his offer:


265.8065 BTC currently held on wallet. Forfeiting the pass-through's 10% cut on interest.

See KRAKEN SPREADSHEET (https://docs.google.com/spreadsheet/pub?key=0AvwwyRGyc1WgdGliN3R3R0hvSWp2Y2hnUzZxM1pwVlE#gid=0)

Claimed holding (note it adds up to 81%):
https://i.imgur.com/VOOmE.png

This fund was started it appears to scam people into paying Patrick's PPT debts.
The fact he was going to invest in pirate was not known by investors and it is also supposedly guaranteed by his personal funds.
I had a few of the passthrough shares on glbse before it shut down and I feel that people were intentionally misled as they had no way of judging the risk involved with the investment.

The realisation of value out of the bulk of the Kraken portfolio proceeds at
glacial pace.  That is, of course, extracting something back from the BS&T
assets.   

The most likely course of action that I have been advised of is pursuing
Trendon via the SEC.  Although providing an affidavit and details to the US
government is not my preferred choice, and there is no guarantee that it will
help, it becomes part of the process.  Additionally, I expect it to remain a
slow process largely in someone else’s hands.

Because of the slowness in extracting and returning funds, and being mindful
of several outstanding requests, I have done some work on getting additional
liquidity.  Again, this has not been particularly easy with assets locked up in
a non-functioning exchange and a variety of other places.

What I have managed to organise is an option for anyone that wishes to exit
during November at 50% of the face value of your Kraken investment.  The
alternative is to wait and see how the SEC process pans out.

This was a bait and switch on a massive scale.

This was a bait and switch on a massive scale.

I agree. I can't find any mitigating factors here. There's absolutely no rational explanation for why he would borrow other people's money to buy bad Pirate debt other than to sell his own bad Pirate debt at an above-market rate. That is, I believe that he used Kraken to bail out himself, probably knowing all along he'd renege on the guarantee. The evidence strongly suggests that he put those who trusted him with their money, both through Kraken and through the earlier loans, last.

Unfortunately, the scenario that I think is most likely is this one: Patrick put his personal profits from his loan business into Pirate. When Pirate defaulted, he lost a personal fortune and was left holding a pile of bad Pirate debt. To preserve his personal funds, Patrick created Kraken to use other people's money to buy his personal bad Pirate debt at rates well above market. He had to have realized that there was a significant chance that Pirate would never pay a dime and he already knew his own portfolio was shaky. So I can't see his personal guarantee of Kraken as anything but an outright scam for him to take other people's money and make it his money by exploiting this conflict of interest.

Assuming he was not using someone else's identity:

http://www.stuff.co.nz/dominion-post/capital-life/5175189/Happy-helping-the-homeless
http://www.rbzgroup.com/people/ph.html