Bitcoin Forum

I like this bond, though it is odd in a couple ways (none bad, of course).

• I'm curious why you are putting this on LTC-GLOBAL and not on BTCTC, since it is denominated in BTC. Are you going to use the funds to hedge your currency risk?
• Why not give the bond a maturity (1 year, for example), instead of making it perpetual? That would reduce your risk (both interest rate and funding) because you wouldn't have to buy it back at face value before maturity. You can put in some kind of rollover provision to allow an investor to roll the bond over to a new maturity date instead of redeeming it, if that is an issue.

BTW, you included the "start small" paragraph twice.

What magical thing has he invested in that has given him over 1,500% growth denominated in BTC in six months? Does this make sense to anyone? deprived is saying that in US dollar terms he has achieved something like .. wait for it...

180,000% growth in 6 months

This states he's only invested with ~15% of the fund (84.84% is in currency), and yet he has experienced a 1.56% daily growth rate over the past six months despite paying out 0.6% per week (~1 BTC/week) to LTC-ATF.B1 bondholders. This does not make sense.

You fail to grasp how leveraging works.  For most of the fund's history since bonds were sold we've had bonds out at 75-100% of fund NAV.

If I have 10 units of capital and make 4% per week then owners of those units make 4% per week.
If I then sell bonds with a value equal to 10 units of capital that pay 0.6% per week.
And make 4% profit on the total 20 units of capital.
Then the unit holders make 7.4% profit per week.

You totally failed to grasp BOTH reasons why the bonds were issued:

1.  Exchange-rate exposure limitation (described in previous post)
2.  Leveraging capital to increase profits (explained very simply above)

Somewhere there's a thread I made that explained point 1 in pretty fine detail before the bond was even put up for moderator approval.  I can't be bothered to find it -but you really should as you're totally missing the whole point of the bonds and then struggling to work out why the results they've produced are exactly the results they were designed to produce.  The various limitations/ratios I set on bonds aren't just pulled out of thin air - they're calculated to meet the requirements of the fund whilst protecting those who hold our debt (the bonds).

EDIT: Deleted part of post as it possibly revealed something I don't want to reveal.

Your fund has experienced 1.56% APD for the last six months. You're either operating a ponzi or you're cooking the books. You're so scared to release anything on your fund you edit your posts to take out figures that might clue people in to what you're doing.

1. You claim to have holdings that amount to 29,000 BTC.
2. You claim to be 15% invested.
3. You claim to be making 1.56% a day on 29,000 BTC. In short you are making 31.2% a day on the 15% invested capital.

Actually it may be very easy.

You have my permission to do the following:

Ask burnside/ukyo/rini to query the total value of buys and sales i've made on their sites (leaving out my own assets on LTC-GLObal of course - sale of my bonds/fund units aren't profit).

You can then publish the results.

And then eat your words - as when you see the results it'll be totally obvious that my results are genuine.  They don't need to match up buys/sells as there should be sufficient excess sales to show a clear profit - to which you can add the assets I logically MUST hold plus profits made operating the pass-throughs (which you totally forget to factor in - some weeks those have added a few % to profits on their own without tieing up much capital) plus profits made selling bonds into overpriced buy orders after currency moves etc.

And the best of it is - you still won't have a clue how I'm doing most of it - just that I indisputably am.

EDIT: If you tell the operators you believe I'm committig massive fraud AND that I have zero objection to them publishing the results then I'm pretty sure they'll happily give you the figures.

One additional clause (if not too late) : you should post here stating that you're asking for the figures and commit to posting them after receiving them.  If you want to make a (bigger) fool of yourself you can do it in public.

What you totally fail to understand - and this is shocking from someone who ran investments (even badly) - is how currencies play into this.

The ONLY growth that is down to my trading activity is the change in LTC valuation (if LTC falls then not even all of that is - and when LTC rises some of my trading growth is wiped out).  This week LTC has risen massively vs BTC/USD (like 300-400%).  As a result of that at present we're down about 18% for the week (as we have SOME exposure).

You KNOW how I make profit - you've done it accidentally yourself a few times.  I buy things for one price and sell them for a significantly higher one.  With the massive increase in our value from LTC rising there's no way I'll be making same profit any more (in LTC).  I can still make 1% per day on BTC no problem - but when applied to our LTC value that ends up being a tiny percentage.

No I'm not going to open my books to you.

1.  After this week's report I'll PROVE that I have all the cash I claim to have.

I can very easily prove I have the cash I claim to have. 

If I can prove I have sufficient cash to cover all units not held by me (at the 6500% profit in BTC level) AND all LTC-ATF.B1 bonds then kind of rules out most scams immediately (as if you believe I DO have the assets then all funds are what I say they are, and if you think I don't then where the fuck did all the profit come from?).

...the pulled out of thin air 29,000 number (where the fuck did it come from?)
...I just don't do the sort of shitty investment thing that you did so dismally at. Get over it.

What you totally fail to underatand is that this is not about me. This isn't about exchange rates or about how LTC-ATF.B1 lost 90% of it's value. This is about why you are publishing figures that show you are making 1.56% a day yet you claim you are only 15% invested. What you are claiming is impossible.

Cut the attitude. I am a 12% holder of LTC-ATF.B1. You work for me, not the other way around. If you don't want to release your books publicly I will respect that despite your lack of respect for other's similar policy.

This is why it's so difficult to believe you. You claim on one hand that you have growth because of the change in LTC valuation. But in the very next sentence you state that the growth in LTC value is wiping out your profits. Which is it? Where is the massive 1500% growth coming from then? If you lose 18% this week how did you gain 1500% the past 25 weeks as BTC/LTC has been rising this whole time?

"I can still make 1% per day on BTC no problem"

You need your head checked. You need to stop being so pissy and explain to your investors how you are making 1% a day because no one believes you. That's what pirate said. 1% a day on exchange rates. What, you think we're stupid? You need to release your books because if anyone thinks you are making 1% a day I have some pirate bonds I'd LOVE to sell you.

What are you so scared of? That we will find out you are lying about making 1.56% per day? We already know that.

You're confusing debt with equity.

LTC-ATF holders have equity.  LTC-ATF.B1 purchasers own debt.  As a bond-holder you have zero say in how LTC-ATF operates - but an entitlement that your debt is paid off before equity holders get anything in the event of closure.

I don't work for you (I work for the holders of units in LTC-ATF) - I (in my role as the manager of LTC-ATF) owe you money.  The conditions of that debt are clearly laid out in the contract for LTC-ATF.B1.  They do NOT include that LTC-ATF actually makes any profit - but they DO include that LTC-ATF hold BTC-denominated assets worth more than total face value of all bonds issued and that total bond issued have a total face value of no more than 150% the NAV of LTC-ATF.

I can prove either of those conditions is met by showing just cash (that's not always the case - but is right now due to LTC being so high).

No, I'm not confusing debt for equity, bondholders have senior claim on the assets of LTC-ATF according to the contract.

Again, I'm not going to respond to your 6 posts essay other than to say that I am one of your major bondholders and you need to cut the attitude with me and realize who you are working for. If this is how you treat your other major bondholders when they ask questions you probably don't have what it takes to be a fund manager.

Just prove you have the money like you said you would, and after that just make sure you don't screw up the payment of your bond coupons and I don't see a problem. We just can't afford another screw up like pirate, and when you waltz in here swearing at people who ask you how you're making 1.56% a day it doesn't look very good.

Sorry - but you ARE confused.

If you want to see all of it on Sunday let me know - and I'll cancel all orders etc.  And do bear in mind, this is with nearly 30% committed to securities - usually we're even MORE cash heavy than this but bought back about 40% of all units in the fund this week.

I can still make 1% per day on BTC no problem [...]
And don't short-change me - with this week's trading we're now at over 6500% growth in BTC and I guess an order of magnitude larger in fiat.

But you have already been caught in a lie. You claimed to own 160/300 units of the fund personally, then just now said you bought back 40% of the units of the fund this week. So you're saying there's just 20 units of the fund outstanding?

You're telling me 20 units of the fund are now worth 29,000 BTC?

I cannot be confused because I am asking a question. You can either answer it or not. Here watch, I'll ask the question again:

I am a 12% bondholder in LTC-ATF.B1. I have seen your financial reports, and they're rubbish -- you are claiming to have made 1.56% per day which is difficult to believe. After all, LTC-ATF is a fund; you don't produce anything. You just trade. I also trade. In fact I run a fund. I flipped a few hundred K of ZigGap for example, recently, for a 3 BTC profit. Yes, we all get lucky sometimes. But a 1.56% profit each and every single day even on average, over a 6 months period, is statistically impossible.

Here's why. You would need to double your money. That would be 100% gain. Then you would need to double your money again. That would be 300%. Then double again. 600%. Then double again. 1200%. And now, based on your 6500% gain comment, you have not only doubled your money again but again again after that. So in other words, you run an investment fund which doubles it's money each and every single month.

When looking around we see that you couldn't have possibly done this merely because there was no place for you to have done it. Maybe BTC has gone up, but your fund is denominated in BTC. So you couldn't have profited from the 1500% rise in BTC. No, the 1500% rise in BTC should have cut your portfolio by about 90%. You know, like it did to anything else denominated in an asset. Like a mining stock. Or an ART kiln security. Or a silver/gold fund -- like John Galt Asset Management's GOLD fund, for example. But no.

You GAINED 1500% during this time.

Okay. It obviously couldn't have come from the 15% invested position, so it had to come from the 85% of your holdings which are kept in currency. I get that. But you yourself state that when LTC rises in price your fund loses money. In fact you put a number on it; last week's rise in LTC price cost you 18%. So here's what I don't get. How did you make the money? I'll be honest with you. Pirate got all pissy when people asked him about it too.

What makes this whole situation deliciously ironic is, in fact, that you won't release your books. You participated in the theft of TU.SILVER's books and posted them online, which was the culmunation of six months of trolling and manipulating of my securities asset prices which were placed on line. But when put to the test yourself, it turns out you can't keep a straight book and I doubt if anyone is surprised.

At this point, if you are refusing to release your books to a 12% shareholder then you and your fund have serious problems. I will be liquidating my personal holdings in LTC-ATF and I can only advise all investors to avoid your security because it is beginning to look like a ponzi. Sorry Deprived, but no one makes 1.56% a day. Not even the guy who ran the trading desk at the Quantum fund.

So you see, it is you who is very confused. Proving you have cash proves nothing. Of course you have cash. You've sold a lot of very expensive shares to people. And I don't doubt you have your own money. But this is nothing to do with your business which cannot possibly have grown 1500% (sorry, 6500%, your words) in the face of a 1500% BTC price increase.

Learn to fucking read please.
[...]
You also mentioned you'd like to liquidate your bonds.

I will be liquidating my personal holdings in LTC-ATF

Ticker
BOND: LTC-ATF.B1

Moderator Score
7  (7/0)

Moderator Votes
YES 7 / 0 NO    (1 ABSTAINING -- Users with 10 or more shares of LTC-GLOBAL are allowed to vote.)

oZoNo voted YES with comment: Note: Although this bond never matures, the issuer promises to redeem bonds at face value (or greater) under certain conditions, including canceling the bond. Note: This bond is callable.
BTCTRADINGPT voted YES with comment: BTC-TRADING-PT shareholders voted to approve: 749-31

Shares
Outstanding 16037 / 100000 Issued

Issuer
DEPRIVEDASSET <deprivedltcasset@hotmail.co.uk>

Forum
https://bitcointalk.org/index.php?topic=129985.0

Issuer Detail
This bond is issued by the Fund operating under the ticker LTC-ATF on the
Litecoin Global Exchange. Further information about the issuer can be found at:

The listing for the fund at https://www.litecoinglobal.com/security/LTC-ATF
The LitecoinTalk thread for the fund at
http://forum.litecoin.net/index.php/topic,657.0.html
The Bitcoin forums thread for the fund at
https://bitcointalk.org/index.php?topic=112876.0

The threads in the last two links contain pretty much identical information (I
post all significant updates to both) so there's no need to read both.

Contract
DEFINITIONS

(The) Issuer / The fund trading with the ticker LTC-ATF on the Litecoin Global
Exchange.

(The) Manager : The individual controlling the user account
with the name "Deprived" on The bitcointalk forums.

The Bond : The security offered on Litecoin Global Exchange using the ticker
LTC-ATF.B1


OVERVIEW

LTC-ATF.B1 is a bond issued by the LTC-ATF. It is a sort of hybrid lieing
somewhere between a regular bond and a 'perpetual' bond. LTC-ATF is issuing
this bond rather than raising new capital via sale of additional units for two
primary reasons:

1. To allow LTC-ATF to trade in BTC-denominated securities without massive
exposure to the LTC/BTC exchange-rate.
2. To reduce the portion of future profits distributed to new investors - and
hence increase the profit retained by early investors. This increase in
retained profits comes with an associated increase in accepted risk (by existing
LTC-ATF investors, not bond holders).

The bond is primarily transacted in Litecoins (LTC) but has a face-value
denominated in BTC. Dividends are paid based upon this face-value. This means
that bond-holders are effectively making a BTC-denominated investment - with
transactions just happening to occur in LTC. This has advantages and
disadvantages for both investor and issuer - which should be carefully
considered before investing.

The bond pays a fixed-rate of interest weekly. This rate may be increased
without notice by the issuer but may not be reduced once increased. Bonds will
initially be offered paying a 0.6% per week dividend - then the rate will be
gradually increased as necessary until demand meets supply. Any such increases
apply to ALL outstanding bonds, not just to new ones sold after the date such
increase is announced.


FACE VALUE

Each bond will begin with a face value of 0.01 BTC. All Asks and Bids placed by
the issuer will be at approximately this face-value less (or plus in the case of
Asks) a 1% administration fee. The exchange-rate used by the issuer when
placing such orders will be the rate available for immediate conversion (i.e.
buying or selling into existing orders) on the BTC-E exchange.

In general the face value of bonds will not change. The exception to this is if
a platform on which LTC-ATF operates defaults, is hacked or otherwise loses
assets rightfully belonging to LTC-ATF. This is dealt with in more detail in a
later section of this contract.


REDEMPTION OF BONDS

The bonds have no expiry date - that is they are perpetual in nature. However
provision is made to allow redemption at any time (subject to certain
provisions) by holders.

Issuer undertakes to attempt to redeem at least 10% (or 1 BTC worth - whichever
is higher) of outstanding bonds on any calendar day on demand. This will be
conducted through two primary mechanisms:

1. Issuer will regularly check the LTC Global market for any Asks which are
priced at 99% of face value or less. Any such orders will be filled.
2. Any bond holder may directly redeem bonds provided at least 100 bonds are
redeemed in a batch. This is done by transferring the bonds to the manager
(DeprivedAsset). When manager notices such a transfer he will sell an amount of
BTC on BTC-E equivalent to the face value of the transferred bonds then transfer
99% of received funds (in LTC) to the holder.

Unfortunately, due to the bonds being valued in BTC but transacted in LTC it is
not possible for issuer to leave standing bids up on LTC Global in the manner
that is used to provide liquidity for LTC-ATF.

At his discretion manager may agree to redeem bonds by means of a transfer of
BTC on the BTC.CO exchange. Where this occurs, such redemption will be made at
99% of face value (with no exchange-rate relevant). This would need to be
arranged in advance and it established beyond doubt that the nominated BTC.CO
receiving account is indeed controlled by the same indivual as transferred the
bonds on LTC Global.

Manager may at his discretion sell bonds at below face value to existing bids on
the market. This would only be done if there were a specific very profitable
(and with short-term availability) opportunity available.


DIVIDENDS

Dividend payments are due at a nominal time of 23:59:59 GMT each Saturday. In
practice the dividend payment will be made at some time on either Saturday or
Sunday - typically just before weekly results for LTC-ATF are published. It is
not possible to schedule dividends in advance as the amount of the dividend (in
LTC) cannot be calculated without knowing the exact exchange-rate available at
the time of payment.

Dividend will be a fixed percentage each week. This percentage will be set at
0.6% per week when the bond is first placed for sale. Thereafter the rate may
be increased at any time without ntoice by the issuer. The rate may never be
decreased by the issuer whilst there are any outstanding bonds. Changes to the
interest rate will be published in the official threads for this security and in
the LTC-ATF threads. Any increases in interest rate apply to all oustanding
bonds, not just to ones sold after such increases.

When a dividend is paid the following procedure will be used to calculate the
amount to be dividended:

1. The BTC value of the dividend will be calculated - the number of outstanding
bonds multiplied by their individual face value multiplied by the current
interest rate paid.
2. a) If the issuer does NOT need to convert BTC into LTC to pay the dividend
then the exchange-rate used to calculate the LTC to pay will be the mid-point
between highest bid and lowest ask on the BTC-E LTC/BTC trade list.
b) If the issuer DOES need to convert BTC into LTC to pay the dividend then
an amount of BTC equal to the due dividend will be used to purchase LTC on
BTC-E. The LTC received from this transaction(s) will be the amount dividended.
3. The full amount of LTC calculated (or obtained) will then be dividended out.
No admin fees or transfer fees will be deducted from it.


MANAGEMENT FEE

No management fee is taken for maintaining operation of these bonds. The
manager expects to gain his reward from increased profits from his personal
LTC-ATF units and his 10% fee on LTC-ATF earnings.

The admin fees charged on purchases and sales are to cover (or reduce) the
various transfer and exchange-use fees necessary to conduct such actions.


RISK EXPOSURE AND MITIGATION

In general bond holders have senior claim against all assets of LTC-ATF (up to
face value of the bond). Most risks associated with LTC-ATF's operations are
carried by LTC-ATF rather than this bond. There is one specific risk which is
shared with bond-holders - the full or partial default of a platform (e.g.
exchange) on which LTC-ATF holds funds. This particular risk is share with
bond-holders for two reasons:

1. There is nothing LTC-ATF can practically do to mitigate this risk.
2. Bond-holders already accepted this risk when they deposited funds to LTC
Global to invest.

In the event that a platform on which LTC-ATF trades (or holds funds) loses (or
ceases to make available for use) assets belonging to the fund then the face
value of bonds shall (at the discretion of manager) be reduced by a percentage
equal to the percentage of asset value controlled by LTC-ATF lost (or made
unusable).

So if (for example) BTC-E vanished with all our funds on there, and those funds
amounted to 10% of the total assets managed by LTC-ATF then the face value of
all bonds would be reduced by 10% to 0.009 BTC.

If such a reduction occurs and LTC-ATF continues trading (rather than closes
down) then half of all future profits made (after payment of bond dividends and
before management fee is taken) would be applied to increasing bond face value
back up towards its initial value of 0.01 BTC.

Other than the above, all risks associated with trading (prices crashing, typoed
orders that lose money, investments that turn out to be scams etc) are carried
by LTC-ATF and do not affect the face value of bonds or the dividend payments
due on them.

So there are precisely two risks bond-holders have (other than that the issuer
scams them) :

1. Losses caused by default/theft from an exchange used,
2. That the value of LTC-ATF assets falls to a level such that the total assets
of LTC-ATF are less than the face value of issued bonds.

Here are specific risks associated with point 2 - and how they are addressed:

Exchange-rate changes : If all of LTC-ATF's investments were in LTC-denominated
securities and LTC suddenly tanked against BTC then LTC-ATF could end up with
insufficient funds to cover the face value of outstanding bonds. To counter
this the fund must maintain BTC-denominated assets such that outstanding bonds
amount to a liability of no more than 90% of such assets. So if we have 90 BTC
face-value of outstanding bonds then we must hold at least 100 BTC of
BTC-denominated assets. Funds will be exchanged between currencies as needed to
maintain this minimum ratio. This percentage will be included in LTC-ATF's
regular reports (usually, but not always, produced weekly).

Trading Losses : It is possible for LTC-ATF to accumulate trading losses such
that it no longer holds sufficient assets to cover outstanding bonds at face
value. This cannot be totally removed as a risk (as exchange-rate could) but is
very heavily mitigated through a few methods:

1. Every effort is taken to spread exposure rather than allow a single point of
failure (one asset issuer) to be able to cause massive losses to LTC-ATF. As
LTC-ATF expands back into BTC-denominated investment the range of securities we
can trade grows - and we can reduce exposure per security. Prior to bond launch
LTC-ATF has targetted a maximum exposure of 20% of assets to a single issuer.
After significant bond sales this target will fall to 10% (until a significant
number of bnds have sold this risk is irrelevant unless every investment
collapses at once). That's a target - not a firm commitment - but one taken
very seriously. Exposure to a single asset issuer includes indirect as well as
direct exposure - so holdings of investment companies traded ARE taken into
account. LTC-ATF never trades securities of investment companies that don't
disclose their holdings.

2. A limit is placed on the number of bonds that LTC-ATF may have outstanding.
This limit is defined as bonds with a total face value of 150% of LTC-ATF's own
NAV. So if LTC-ATF had 100 BTC of assets without any bonds then maximum bonds
it could issue would be 150 BTC worth. This ratio will also be included in all
regular reports of LTC-ATF. If this ratio ever rises above 150% then manager
will promptly ensure that it is reduced below 150% by either issuing more units
of LTC-ATF and/or repurchasing bonds from the market.

In practice there is no plan to ever intentionally get close to the two limits
defined above. However the first likely will on occasion need to be corrected
(if a few BTC investments suddenly fall heavily in value). The second is only
likely to need adjustment if LTC falls very heavily against BTC.

Despite the above mitigating actions risk cannot be totally eliminated. To
claim otherwise would be ignorant and/or deceitful. Investors should always
consider potential risks before investing - that is the case here as it is
everywhere else.


BOND RECALL

The issuer has the right to forcibly recall all outstanding bonds at will. This
must be done at 105% of face value - with the LTC payment made defined as the
LTC obtained by selling 105% of total bond face value (in BTC) on BTC-E. No
admin fee or transfer fees may be deducted from this.

Whilst there's no intention to ever do this, this right has to be reserved in
case trading conditions become such that supporting outstanding bonds can no
longer be justified. An example would be if BTC-denominated exchanges closed
down but LTC Global remained open - where LTC-ATF could continue but there'd be
no need or use for BTC-denominated capital.


FUND CLOSURE

In the event of LTC-ATF closing operations all outstandings bonds will be
redeemed at 100% of face value - with the LTC payment made defined as the LTC
obtained by selling the total bond face value (in BTC) on BTC-E. No admin fee
or transfer fees may be deducted from this.

Dividends remain due every week until such time as LTC-ATF is able to make such
a final payment.

If fund closure is announced then LTC-ATF may not repurchase any units or make
any payments of settlement to LTC-ATF investors until all bonds have been fully
redeemed. Bond holders have absolute seniority over LTC-ATF unit holders in all
claims on LTC-ATF assets in such a circumstance.


GENERAL ISSUES / FINE PRINT

In various places this contract refers to BTC-E when discussing currency
exchange. Whilst at the time of making this contract that is the exchange used,
such use is not intended to restrict issuer from using other such exchanges.
All occurrences of "BTC-E" should thus be read as "BTC-E (or such other exchange
as the issuer chooses to use)".

Changes may only be made by issuer to this contract if either:

1. There are no outstanding bonds,
2. A vote is passed approving the changes with 100% of bond-holders voting yes.

LTC-ATF may not hold outstanding LTC-ATF.B1 bonds itself (this is impossible to
do without use of a proxy account anyway).

For the purpose of this offering, BTC and LTC are considered virtual currencies
with no intrinsic value (akin to currencies in online games). This fund is
being run for the entertainment of the manager and investors with no expectation
of financial gain or loss for either party.
Executive Summary    This bond is a product - not a company. The business issuing the bond is
LTC-ATF - which I now give a brief rationale for.

WHAT IS LTC-ATF AND WHY DOES IT EVEN EXIST?

LTC-ATF is a small fund established to trade in securities denominated in
crypto-currencies. The fund's focus is very much on trading rather than
investment - it doesn't sit on investments waiting for them to (hopefully) make
a profit, rather it strives to buy and sell making profit in a much shorter
time-scale.

The obvious question to ask is "Why bother setting up a fund with such a small
amount of capital - couldn't you just use your own funds to trade?". There are
a range of reasons why the fund exists - hopefully the give some insight into
the rationale behind the fund and why it operates the way it does. In no
particular order :

Funding : Of course I have sufficient funds to use my own capital for an
operation this size. But if market conditions (range of securities and volume
traded) change such that a much larger operation is desirable then without a
track-record it would be hard to raise the funds to take advantage of that.

Fairness : I'm by no means shy about expressing criticism of other virtual
securities. It's therefore only fair that I run one myself and give opportunity
for those I criticise to reply in like manner. It's my hope (and expectation)
that my performance, fairness to investors, reporting standards and transparency
will make plain that - whatever else my faults may be - I'm no hypocrite when I
complain about others' lack of those same qualities.

Fun : It's far more enjoyable running the fund in public than it was when I just
invested my own funds in private.

Motivation : Having a responsibility to my investors causes me to put more
effort into my endeavours than I otherwise likely would. If I become lazy, lax
or careless then it will become a matter of public record - a great incentive to
do none of those.

Start Small : It's painful watching people attempt to create new companies in
areas they have no proven expertise in and trying to raise thousand or tens of
thousands BTC right from the start. I'm doing it (what I believe to be) the
right way - start small, prove you can do well whilst small, then and ONLY then
expand.


Business Description
This bond is issued by LTC-ATF. I describe here the areas of business LTC-ATF
operates in. The capital raised from sale of bonds is used in the execution of
these business areas.

WHAT SECURITIES DOES LTC-ATF OFFER?

At present LTC-ATF offers two securities on LTC Global:

LTC-ATF - This is the parent fund. Investors in this purchase units of the fund
representing a portion of the assets owned by the fund. This fund does not pay
dividends - all profits (or losses) are reflected in a regularly updated and
published fund valuation. Liquidity is provided via a constantly maintained
bid-wall just below NAV/U. Units of LTC-ATF are valued and transacted in LTC.

LTC-ATF.B1 - This is a bond issued by LTC-ATF. The bond's purpose is two-fold -
to retain as much of profit as possible for LTC-ATF investors and to allow
trading in BTC-denominated securities with greatly reduced exposure to fund
value changes casued by exchange-rate movement. This bond has a face value (and
pays dividends) denominated in BTC but transacted in LTC. Dividends are paid
weekly at a fixed rate which can be raised by the fund manager at will (but
never lowered again). Liquidity is provided via buying back through the market
at just below face value and by facilitating sell-back of larger quantities of
bonds through direct transfer.


Definition of the Market
The market for this bond broadly falls into three groups of investors. These
are now addressed in INCREASING order of importance :

1. Unsophisticated investors (mouthbreathers). These invest in anything which
pays dividends. They probably don't read contracts in full and definitely don't
do any analysis to determine whether an investment is likely to be profitable.
If they see this bond's price rise they'll assume it means LTC-ATF doing well,
if they see it falling they'll assume LTC-ATF is doing badly (price of this bond
is actually set 100% by exchange-rate and entirely unrelated to LTC-ATF's
performance). If you're reading this you probably aren't in this category.

2. Speculators. This bond provides a useful way to bet against LTC in the
medium term (short-term the admin fees wipe out gain, long-term you probably
shouldn't even be using this exchange). Speculators can also pick off orders
that aren't updated to reflect changes in the exchange-rate to make a fast profit.

3. More sophisticated investors. It's important at this point to consider WHY
people invest in specific securites. There are intangible reasons (want to
support community, think it's interesting etc) but one very tangible one which
applies to a lot of investors - to make profit.

But what does "profit" actually mean - and, more relevantly, how is it
calculated? Is an investor interested in increasing the number of LTC they own?
The number of BTC they can purchase? The purchasing power of their assets if
converted to fiat?

A more sophisticated investor may well opt not to put all their eggs in one
basket (for example investing/holding solely assets whose profitability is
determined in LTC). This is where these bonds fill a useful niche in the market
- they allow investors to effectively convert part of their LTC holdings into
BTC AND earn growth on them. That allows them to hedge against a total collapse
of LTC vs BTC. And they can do it without ever having to move any funds off of
LTC Global or use an exchange.

There's also two classes of investors for whom this bond is absolutely NOT suitable:

1. Ones who want to go "all-in" on LTC increasing in value faster than BTC in
the short to medium term (if they only want to gamble like that long-term than
the bond MAY make sense for them in the medium term).

2. Ones who want to hedge their investment portfolio against the devaluation of
BTC/LTC against fiat. This bond provides no such protection.
Products and Services    This bond is, itself, a product of LTC-ATF - it pays a fixed rate of interest
and does not offer any products or services.

At present it is the only offering on LTC Global offering a reasonable rate of
interest with the bond value tied directly to BTC. As such, it has no direct
competitors.


Organization and Management
This bond is offered by LTC-ATF. LTC-ATF is a one-man operation running a
virtual security for educational/entertainment purposes. Accordingly, no
licences or permits are required or held.

More information about the operations of LTC-ATF can be found in its contract
and discussion threads.


Marketing Strategy
Our target market is described in a previous section of this document.

Initially we are only releasing a very small number of bonds - so the
expectation is that little effort will be needed to sell them. Indeed our
requirement for funds isn't for all to sell at once anyway - so a slow pace of
sales is not some big disadvantage.

This bond has a fixed interest rate which can be raised at will by the issuer
(subject to a defined maximum rate). If our requirement for funds from bonds is
not being met then our marketting response is very simple - we raise the rate of
interest we offer until demand meets the supply we need to sell.
Financial Management    There is no relevant financial management required for the operation of this
bond - beyond that detailed in the contract. As a bond, the profitability or
otherwise of the issuer (LTC-ATF) has no bearing on the face value of the bond
or the size of dividends paid.

The regular reports of LTC-ATF (published in its thread on LTC and BTC forums)
will (from launch of this bond) contain the two ratios relevant to operation of
this bond:

The ratio of outstanding bonds (total face value) to unencumbered LTC-ATF assets
- which determines whether more bonds may be sold.

The ratio of capital raised from bonds to total BTC-denominated assets held by
LTC-ATF - which ensures no exchange-rate swing can make LTC-ATF unable to
service outstanding bonds.


Financial Management
There is no relevant financial management required for the operation of this
bond - beyond that detailed in the contract. As a bond, the profitability or
otherwise of the issuer (LTC-ATF) has no bearing on the face value of the bond
or the size of dividends paid.

The regular reports of LTC-ATF (published in its thread on LTC and BTC forums)
will (from launch of this bond) contain the two ratios relevant to operation of
this bond:

The ratio of outstanding bonds (total face value) to unencumbered LTC-ATF assets
- which determines whether more bonds may be sold.

The ratio of capital raised from bonds to total BTC-denominated assets held by
LTC-ATF - which ensures no exchange-rate swing can make LTC-ATF unable to
service outstanding bonds.

If anyone has serious concerns that the claimed funds belonging to LTC-ATF don't exist then it's actually pretty easy for me to prove otherwise.  Most of the time 80%+ of the assets managed by the fund are in cash.  I can, at any time, show all of that cash by placing pre-agreed bids on the various sites I trade on

If you look at the LTC cash on LTC-GLobal it says 8048 LTC then reports that as being worth 8100 BTC!  Obviously what happened is that at some point I typed the LTC balance into the BTC-value field and never noticed.  The mistake has no ramifications other than being embarassing - the BTC-value there isn't used in any calculations of significance and doesn't impact on the final NAV.  If (and it HAS happened) I enter a wrong figure into a cell that actually matters then I tend to notice it immediately as it causes a massive unexpected move in NAV/U - which lets me know I just made a cockup.

...I'd like us to be trading ASICMINER - but we don't really have the spare cash to do so.

Right now cash is around 500 BTC worth (15K LTC worth).  If LTC were to halve by then, it could be down to 300-350 BTC worth (20k LTC worth).

Sure - will do that.  I usually do reports Sunday evening - after this week's I'll flash the cash (place orders on all sites).

Deprived has time and time again lied about showing he has the cash:

I'll need a pretty precise time agreed in advance for it plus a list of assets/site and you can give some 3 digit ending you want so you can see the bids are the size I state AND the right ending so are obviously mine (or someone else putting them up on my behalf I guess).

LTC-ATF.B1 REPORT CARD #1 : APRIL 21st, 2013
MANAGER'S GRADE: B (76.3%)


SHARE INCREASE
On April 21st, while market-making LTC-ATF.B1, I purchased a quantity of 244 shares at 0.455 and 0.46. The face value of 0.01 BTC converted into LTC going rate was 0.451 at the time. I then noticed the number of outstanding shares of LTC-ATF.B1 had increased from 15793 by 244 shares. Here's the relevant data:

DIVIDENDS:
2013-04-21 05:15    Ł 42.6411    15793    0.00270000    COMPLETE

TRADE HISTORY:
2013-04-21 05:20:09    Market    44    Ł 0.455    Ł 20.02
2013-04-21 05:20:04    Market    200    Ł 0.46    Ł 92

Just noticed that you can't even get basic facts straight.

The 44 at .455 was actually ME buying, so I know for certain it wasn't you.

I'm waiting for someone to start writing options on the bonds - it's possible to speculate on the BTC/LTC exchange-rate by doing that.

No, I didn't say THAT 44 was me. You're misquoting me and putting words in my mouth -- that is a cut and paste from the public log of trading at https://www.litecoinglobal.com/security/LTC-ATF.B1 (see "History").

LTC-ATF.B1 REPORT CARD #1 : APRIL 21st, 2013
MANAGER'S GRADE: B (76.3%)


SHARE INCREASE
On April 21st, while market-making LTC-ATF.B1, I purchased a quantity of 244 shares at 0.455 and 0.46.

Why do you lie just for the sake of it when it's obvious to everyone that you're lieing.

I think that's a question you should ask yourself.

Well I think it's because you have some mental problem where you've lost touch with the reality the rest of us inhabit.  I have no idea whether you believe your own lies or not.  You don't seem stupid enough to be unable to read your own posts and see what you said - yet you routinely lie about what you've said in the past even when it's in posts you haven't got around to deleting yet.  Maybe it's just some very severe memory problem.  I honestly don't know what the problem is, just that you have a very major one.