Bitcoin Forum

Hello!

Let me tell you a story..


Once upon a time there was a user offering a variety of services. A "project1" had found this user through mutual contacts, and requested some services. These services included editing the content, making a thread and publishing it as well as keeping it open for multiple weeks. The price of the service is on a $/week basis (a full week is counted as 7 full days of the thread remaining open), where all of the work (as mentioned prior) is already factored into this quote.
The user proceeded to check out the project's team before accepting any payment (and had also contacted third parties for input). The user did not find anything suspicious and after seeing a statement about a partnership from the alleged project's partner (more on this later [1]), they have decided to accept it.
Without requesting all the weeks to be paid in advance (the usual is one), the project's contact had sent everything in advance and notified the user. After confirmation, the user had started working on the thread and had completed it (published an archived version - now removed; but archived via external tools).
A few hours had passed, and after exchanging several messages with the 3rd parties new information came to light which undeniably makes "project1" a scam: The whole team was fake. This put the user in a difficult position, who now holds all of the money and will not finish the remaining part of the job ('keeping the thread open') for obvious reasons.


How would you handle this situation (see poll for options and/or elaborate in post)?

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[1] This ended up likely being a statement about another project/company that has the same name, but the "project1" used it in a fraudulent way.
[2] Note: To clarify, there has been no communication between the user and project1 since the user became aware of this information, other then pointing out the team was fake - which was not yet read due to timezones.
[3] I'm not going to share what I'm more inclined to do as that would cause bias and probably mess up the voting.
[4] There's no solution that will satisfy everyone; user is gonna get grilled regardless of what they decide.

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Local rules (albeit not needed because self-mod):
No Quickseller, cryptohunter && similar trolls.

There should be a "Keep partially, donate the rest (to charity)." option. I wouldn't be against someone taking a share for the work they did do, and donating the rest.

Added. Thanks for the input.

Were there any terms set upfront? That can influence the ethics (and if not, there should be next time. Something like: "If I find out you're dishonest, our business ends instantly without refunds").

Could the charity be some forum-users who you believe have been scammed in the past?

No; but that has already been remedied for the future.

This was not considered, the idea was something more known (e.g. FreeRoss).

I would consider the received money to be only in users possession (i.e. not owned), until the work is completed. As the work is not going to be completed, and it's not a force majeure situation or anything like that, then full payment shouldn't be accepted. Regardless of whether the received funds would be kept or donated, it's still accepted money and it shouldn't be accepted in the first place. On the other hand user would then need to send money to the scammers. I would keep these two things separate and treat the received money as something you shouldn't have been sent at all.

So.. I would separate these two things: that they're scammers and that the user has a work contract/deal with them. I would seek to communicate and do a partial refund for the work not yet done, and keep or donate the rest to charity. It's a moral choice between sending money back to scammers and scamming the scammers (=not completing the work but still taking all the money). There's no correct answer. Also I would be very careful to be extremely sure that they are absolutely scammers. To make this easier, I would highlight the idea that the money is not user's until the work is done, and it could be in anyone's possession currently.

20% kept for work done and 80% to free Ross. Fuck the scammers, they wanted to steal users money - why else use stolen images?

Scam projects can touch my balls IMO they deserve to lose the money

So basically the aTriz situation but not carrying on with the project right?

I think it depends on some more things.
Was the payment solely for creating and maintaining this thread or were other funds included earmarked for any other service this person was supposed to provide or any escrow for any other possible payments?
Did anyone else get scammed or lose money or their effort over it?
How much for the service already rendered and how much is the remainder/overage? Is it substantial?

Who busted the scam?
Maybe instead of giving all of the money to charity you could give it to the scam buster, or a good chunk of it, as a reward.. Maybe put some of it up as a public bounty to bust more scam ICOs?
Reward and incentivize the good samaritans stopping these scammers..  

Sounds like a solid opportunity to start something like this if you are so inclined.

Given my understanding of the situation I would keep whatever amount is appropriate as payment for the work already done (or full payment for the work agreed to be done) and then the remainder is a tricky situation. Giving money back to scammers (as punishment for being caught) sounds like a terrible outcome. Charity or refunding those that were scammed in the past (especially by the initial fundraising for project1) would seem an appropriate response.

I have already clarified why I don't agree with this assesment. This would be the case if it were bounty management where work has to be completed at the end of a week. Keeping something open involves no work.

No, absolutely not. That was a bounty management thing where aTriz knewingly continued with the thread despite knowing that information was fraudulent (+ that was a ICO this is an airdrop).

Creating, posting and keeping it open for a while (which essentially requires no work to do). No maintaining of any kind, nor any other service of any kind.

Nobody got scammed because of it as it was never published (other than temporarily in archival). Whether someone got scammed before, that I do not know and can not know.

What does this even mean? If you are asking how much of the work was done in terms of percentage, you can argue any arbitrary number IMO. For example: If you see 'not locking a thread for a certain amount of time time' as zero work (since it requires zero effort), then you could argue that 100% of the work has been done.

This was not publicly revealed yet, but it isn't an issue as there is no project thread/no way to buy any tokens etc. Should be today/tomorrow once things are wrapped up.

That seems like a creative exit (as the title was to be chosen by the user). However, it still may lead to victims and the thread author would get the blame IMO (despite title && possible disclaimers).

There was no fundraising AFAIK (yet).

Officially I voted to keep some for the work that was done and refund the rest.  That seems like the ethical thing to do.  The evil little monster in my head would say that keeping some and doing something good with the rest (anything but returning it to scammers) wouldn't be too bad of an option.  I don't think either of those choices would draw anyone's ire, except perhaps for the scammers.

I don't like the burn address idea, as that's just wasting money that could be put to use.

I voted for "Refund partially, keep the rest" assuming that the project hasn't actually scammed anyone yet. Two wrongs don't make it right so the person should take the appropriate compensation for the work that's been done and return the rest.

Also assuming that there was no "early termination penalty" or anything like that in the agreement.

Don't refund to the scammers. They have used fake team this means their intention was not good by the way. Also they never contacting to the user so it's bit clear that their intention was to scam peoples although they failed to do it. My opinion is keep appropriate fund for user who took the work, and rest fund distribute on charity. Or distribute rest fund to user's who have exposed this kind of fake ICO's and save lot of fund  ;D  

But their intention was not fair.

I would keep what was owed to me for the work done, and refund the rest.  But, I would go further; I would keep "the work" so it could not be used to scam anyone in the future. 

Working for a project that turns out to be a scam, but this was caught in the very early stages and was immediately stopped.

So it should be a small amount of coin for a small amount of effort and only between the would-be scammer and the thread-maker-guy.

I can see doing BBcode work for someone but why would you post their thread for them and put your name on it? This was done before copper memberships were available to post pics and links but now that is solved.
I guess if you don't mind your name being front and center on some random "project" for no good reason ("No maintaining of any kind, nor any other service of any kind") have at it, but not me..

It was unclear to me what all the funds were supposed to be for and if their was a large amount of overage.

So we don't know who came with the information to stop it? The scam buster... Source of new information..
The guy I would probably give a big tip..


In this case I think you could do any of the above poll options without it being entirely unethical. I don't think doing any of them would make this person a bad guy..

Myself I would probably send it all to the guy(s) that found it out as a scam and keep none of it because I would feel like shit that I almost just contributed to a bunch of people getting scammed..

Unfortunately not. It seems that whenever a disclaimer is expanded, it ends up being insufficient due to unforseen events. For the future I advise everyone to use something like 'if any information is found to be misleading, I reserve the right to abandon the agreement and keep all paid funds' as part of their disclaimer.

It's not the same, no.

The absolute amount of money isn't the problem. The problem is any kind of division (if one of those options is chosen - which is likely given the input so far).

This is done nowadays. It is done via copper memberships usually by fake bounty managers and those that are afraid to make any risks due to recent scrutiny on said bounty managers for externalities that are out of their control (which I have predicted). Between posting with a copper membership and a legendary member, almost all projects will go with the later.

It was clarified at the start: Edit content -> format into thread/make thread -> publish/keep open.

Everyone will be credited in a 'timeline-styled contributions' part of the thread.

---

Whilst the input is very welcome and constructive, there is no consensus just as I expected:

You think it is okay to steal from an alleged scammer? That doesn’t sound right.

Unless a third party can lay a claim to the money, any excess funds belongs to the person who procured the work. Even in this case, without a court order, giving money to a third party is legally dubious.

A refund should be given for work not completed, however there is an argument that a full refund should be given, depending on the terms agreeed to.

I think one can keep money for the work OR the work but not both. It might be a moot point anyway. The OP makes it sound like the work is already in the hands of scammers and they can re-post the thread themselves.


Still not an excuse to steal from them.

If they had already scammed it would get murky - should the contractor enact some sort of vigilante justice to distribute the funds to victims? Given that there is no real law enforcement in ICO scams this might seem like the right thing to do but a bit of a slippery slope. Anyway, that's not the case here as far as I can see.

This. Also I feel that all of the "donate to charity" options are unethical simply on principle: either the user is entitled to keep the money, or he is not. If he is not entitled to keep the money, he is not entitled to donate it, either. Donating the money serves no purpose except to make stealing from a scammer seem less unconscionable than it is.

I would refund all money to the scammers

There's a reason they wanted 'user' to post and keep the thread. The deal included this for that reason. Now how much % of the payment is for for posting & keeping the thread?

That is correct. User should either keep the money or return it.

Perhaps user should make a video call with fake team before returning money to wrong person. If team fail to show their published face(s) during video call, user is not obligated to return money to new random person 8)

I see what you did there.

I still think that's not a good reason to keep the money. As far as I can see there was no obligation for either party to be truthful about their identity and I doubt the contractor could show a face matching their avatar either ;)

If the user is entitled to keep the money then couldn't he keep it and then donate it if he wanted to?


This is sounding to me like we are hypothetically talking about a proven scammer, not just alleged, and these funds were sent in the commission of a scam, and the contractor user did do the work but basically had to pull it due to finding out it was a scam.

Actually this whole thread is bullshit because we don't have any of the facts and this is all just hypothetical without even the clearest hypothetical events to go by.

None of the opinions in this thread should be applied to any specific situation until all of the facts of the actual situation are laid out for all to see..

You got it right there, most of the replies have their own logic/ethical reasoning.
I found myself in a similar situation a long time ago, working for people with very dubious ethics and practices, and terminated the contract early, keeping what I had earned and been paid for.
What to do with an overpayment like in this case didn't come up, although if there had have been I would have returned the balance to them solely for personal safety reasons, as those particular Project1 people were gangsters.
I started paying more attention to actual contracts and proper due diligence after that.

Yeah, I know ::) User should return whole amount if they didn't start working on thread, or return partial amount and keep the rest of money if they start working on thread but stopped because of fake things.
My vote goes to "partially return, keep the rest".

Question: In case of partial return, who will decide how much is partial? And how?

I would probably just return it unless you are 100% sure your contact with the project isn’t someone like you they just hired to do some marketing. Given you yourself believed they were legitimate at first, you could be screwing someone who naively believed the same.

Fair points. I guess the first thing to do is to wait and see how the project owner(s) respond to this; in the meantime hopefully there will be an option that has reached clear majority support (this could set a precedence for future cases although I'm hoping that people avoid them with the disclaimer that was proposed).

It is not. I hereby ask you to refrain from making this type of comment or you will be added to the local rule list. The situation was described almost 1:1 the way it happened just without revealing any names  (and/or specifics - those which aren't really relevant/wouldn't change anything).

If that is the preferred outcome, that will be the next issue to tackle.

Full Refund.

Wouldn't take money from scammers not knowing how they got it themselves.
There are other good projects to make a buck from.

Also scamming the scammer is not something I see as morally ok. Only version would be if it was written in the contract (if there is a written contract) mentionning what happens with the money in that case (charity for instance or similar would be the ideal option).

Sorry if I missed this.

-Was there in fact a contract. If so was there any defining points regarding payment, that they may have ignored in making a lump sum payment: Was it lump sum? was there a breakdown  in portions relating to maintaining and creating. I ask as you mentioned the norm is to do something weekly.

- What does the legal jurisdiction the contractor lives in have to say. This would be more important than our opinions, I think anyways. I say this as criminals can still sue or have you charged with theft, depending on the country.


Personally, I would take my appropriate cut for the work that was performed. If this has not been stated clearly in the contract I would side with the contractor deciding what their time was worth. This should be done inline with what they would quote a new client requesting the same service at the time they agreed to this job. The rest I would refund. I say this mostly due to legal liability (if it exists for them), secondly it's still IMO taking what's not yours regardless of how shitty they may be.

Ethical Dilemma's very rarely have a "correct" answer... and the varying opinions here are testament to that. Personally, my "values" fall in the "keep what you are owed/is fair for work done and return the rest" category.

I see it as being somewhat similar to selling a widget for $5 and someone pays you $50 by mistake. Keep the $5, refund the $45. Easy, right? However, suppose you found out (before refunding) that the person who accidentally paid you $50, was in fact a known scammer. Then what do you do?

IMO, keeping a "fair" amount for work done is reasonable. Keeping anything else would make you no better than the scammers themselves. Similarly, donating to charity might make you feel good and might be seem as a form of justice to some... but this is arguably the same thing as keeping the money for yourself and spending it on <insert stuff here>. You are doing things with money that you don't really have a claim to.

Has there been any discussion with "The Project" regarding payment for work done and repayment of extra funds?

"I wouldn't be against" doesn't mean that I fully support doing it. I think it should be a poll option though, as it was the most commonly suggested option when Lutpin was escrowing the Ebitz campaign (https://bitcointalk.org/index.php?topic=1682519.0) and Ebitz turned out to be a scam.

That's a big part of the ethical dilemma. When an illegal drug-distributor is caught all of the funds on-hand are seized; this is a terrible analogy for the situation, but if the community (as the authority) were largely in agreement that these funds were being used explicitly for illegitimate acts then it would seem appropriate that the funds be seized. Is that flawed reasoning?

This is not a convicted drug dealer though and even those laws vary significantly around the world.

This would be more like a suspected bank robber trying to buy a ski mask and the store refusing to give him change from a $100. You either refuse to do business at all, or do business like you would with any other customer, and/or call the cops if you have a reason to.

I think it will be honest to keep partially and donate rest of the fund to charity. Basically its legal for me to keep my wage because its not my fault to having a scam project and after confirmation of scam i will not feel so good to return the fund to scamers again i think :)

Refunding  to scamers again will not be a good idea from my side. There is no chance there that who got scammed will get back their fund.

The money was for services and the person was unaware of it being a scam prior to accepting.

You don't know how the money was obtained in the first place.

I think it would be fair for the user to keep the funds they were paid and put the rest in a cold wallet until requested for a refund.

I may also later be claimed if it was obtained through a previous scam.

If you give it to charity then you may still be liable to pay it back. If you hold it and don't spend it then it is available for later claim.

I would be strongly against doing that. As others have mentioned, stealing from a scammer is still stealing, and donating to charity doesn't change the fact that money was stolen.

I am shocked to see how little detail some of these escrow contracts for signature campaigns (and others) have. I remember seeing this (https://bitcointalk.org/index.php?topic=557743.msg6079121#msg6079121) escrow contract, and believing it has an appropriate amount of detail as to what all parties should expect so everyone will be on the same page depending on various outcomes and/or a dispute (this (https://bitcointalk.org/index.php?topic=309410.msg3319944#msg3319944) thread has a portion of the escrow contract regarding a potential dispute). Ideally, any (escrow) contract should detail what happens if work cannot be performed for any reason.

A problem with "giving the money to charity" is there is always the possibility the "scammer" will be able to later provide proof of innocence (or something to give doubt to their guilt) after the money is given away.

 A bigger problem is that you said you will do one thing, and end up doing something else.

Forfeiture laws and practices are horribly unethical, and IMO are likely to get stricken down in the fairly near future.

Also, you are incorrect as funds that can be directly tied to the crime are seized, which does not apply to the case described in the OP. Also, from what I can tell based on the description in the OP, the team in question has not actually scammed anyone yet, as it sounds like they are likely planning on scamming -- it would be appropriate to not work for this person, and to warn others of the likely scam attempt, however it does not sound like they obtained any money illicitly.

I don't think it matters who money is stolen from. Stealing is stealing no matter what.

Interesting Kantian philosophy.

I voted send everything to a burn address: it will clean up the max possible of your ethical conscience. Your responsibility to not investigate with an ethical sight BEFORE to accept the job: any part of money you are going to keep/send/transfer/refund, will only leave inside yourself a conscious,unsolved,partial,guilty sentiment to have been (unaware) part of a scam.
I'm very curious what will be your final decision tho.
Love u kitty

Either burn it or donate it to charity. Keeping the funds might results into you becoming an accessary in case of a criminal investigation. Another option might be refunding it to people who fell for the scam but it would be a pain in the butt to make sure everyone gets an equal slice.

Even if the team was fake, if there was no real intent of the team to scam you should refund to the team.

How can there be a real intent of the team if they are fake?

Well , personally i dont get the rush of everyone making a team public. I would like to work with hidden guys but to be sure they're gonna develope something.

Speaking of how many scams are arround i kind of get it, anyhow i don't like the centralysation arround developers teams in crypto.

In that case a team should stay anonymous and explain WHY they prefer to remain anonymous. Creating a fake team with stock images is shady as hell and will likely result in an exit scam.

Well yes, but sometimes new coins team are afraid because of the fud comming on if they are bad managers with the project and just destroy their names.

well thats normal somehow, but personally i wouldnt invest in a startup if the owners would never failed another project.

You're right. That's why I included that it was a terrible analogy. I'm not sure where to go on this one, and I'm just throwing out half-baked thoughts with the hopes they will be productive.


I'm not sure that's a better analogy :P
It would be even more like a bank robber trying to buy a gun and the plans for the robbery fall out of their pocket onto the counter in the view of the store-owner and then the store owner refusing to continue the transaction in any capacity. I imagine the store would turn over these funds, assuming they were already in possession of them, to the authority (community > charity , in this case).


I'm not disagreeing with a refund, it very well may be the most ethical thing to do. The question of how any of these options will affect the most people should be considered, though.

I don't think the community has the authority to impose this penalty here. I could imagine this happening if the funds in question were proceeds of a scam and there were known victims claiming those funds but even that is a big can of worms.

Keep a proportion to cover that work that was done and return the rest.

It doesn't matter that the money came from scammers - stealing is stealing, regardless of the owner of the funds or how they acquired them. The fact that they money paid may have been used to scam people in the future does not give you a right to it. Keep whatever payment is fair to cover the work done so far, and return the rest.

@Quickseller
Just to add
IRL, when someone creates damages to the society and is sued, the judge sentences the person to "vacation time in prison" and/or a fine. This fine often represents the amount to compensate the society.

Of course, online and in a case like this, it is difficult or even impossible to send the person to prison. For a fine also, you can say. Except that the funds held could be considered as the compensation for the society. (the crypto community). The judge is this thread

The money could be shared among the people who have been victims if any. And/or donated to something related to our crypto(community). Don't know how/where but it could be spent on education for example.
Or if it isn't something possible then, charities always need money, you can do a lot with a little.

Taking stolen money as a payment is also punished by law in most countries.

Yeah, fair point. However, I don't think in this case there is any suggestion or suspicion the money was originally stolen - certainly not in the description Lauda gave - only that the project was likely going to scam in the future.

Well if they are scammers, I would be assuming they didn't originally earnt the money honestly. Scammers will be scammers. Again this is just how I see things.


If you wear a 2k$ suit while you break in to my car, I am not going to assume you paid for that suit.

Yes, and in IRL, it is a (hopefully impartial) judge and court of law that decides if a crime has been committed, who the guilty parties are and what the punishment will be, if any... not an individual caught up in the situation making "vigilante" decisions.

Making judgements that the team are scammers that deserve to be punished and then doling out "justice" by keeping the extra funds or donating to charity or burning it is taking the "law" into your own hands.

oh my gosh this was so stupid..

You can make assumptions on everyone just because you feel you can, well you can do them but don't say them like your assumptions have to accepted by everyone.

A sales man will always lie to you to sell his product.



So much agree with you here

But his is not an assumption?

Facts :
you have received money from a project. You did you due diligence and the project was ok.
You do the work, and technically are entitled to payment for the work done.
Then you find out that the project is a scam. you halt your work and you are in a limbo situation


Thinking out loud :
Keeping the extra money for yourself could be considered as being part of the Scam (what if the money from 'project' came from a "victim')
Keeping a share based on the work done before you came aware of the scam situation is fine by me IF you then do a post to warn users about this project.
Especially if you explain that you refused to keep the funds.
If it is not you, someone else would have done the work.

I like Suchmoon analogy :

If you don't sell the ski mask, someone else will.
As a seller, i would maybe take a picture of the credit card and contact the local police office to tell then what i noticed and provide my  cctv footage. 


But the tricky part, is that if you return the funds, they can use them to pay someone else to do some work and organise a new scam.
And finally if you give the money to some kind a charity you are at risk of someone coming later and claiming that those funds (project's fund) were actually  stolen from them (aka a Victim)  by the scammers and that it should have been returned to them.

Well, there is no prefect solution.
If the total sum was less than $1000 i would do as following :
If it was me, i'll keep my share, ditch the remaining to a charity.
But i would also be ready to give back the usd value donated to a charity if a victim finds me and ask for his funds.
Odds are that a bull market might come back and that a small % of the money kept as payment for the work will pay more than the money donated to the charity (usd equivalent).

Let's be serious. Whats the point of a sales man? To sale stuffs arround, how can sell a product? If a person needs it. If he still needs to sell to more people he has to convince you to use a product you don't need.

So, it's on the job description lol

:-*

@Quickseller & co: While I respect Kant's views on many things, his view on morality is very wrong. It can and will cause much more evil which could be easily avoided (e.g. "thou shall not kill" applied in driverless cars would lead to letting your car run over 10 people instead of say 1). Not to say that there aren't situations where you should not harm someone/something in any way just because it may cause greater good/lesser evil. Labelling the whole subset of a certain type of actions as equally bad and always wrong is also incorrect. Say stealing to enrich yourself vs. stealing food to keep your children alive (assuming there is no other way). In say the later, the moral choice is stealing. Saying nonsense such as "stealing is always wrong" implies that morality is objective, which is a load of bullshit. Morality is solely a subjective concept that we invented. Anyhow, moving on.
@HCP & co: The law system pretty much everywhere at the moment is very corrupt (due to legality of lobbying and whatnot), and laws regarding stuff like theft are just nonsensical ('create a no-theft backdoor which can only be used by a small set of entities'). This is why I explicitly wrote ethical dilemma, as discussing legality is a waste of time; this is whilst ignoring many factors e.g. this is crypto, criminals are not going to sue you etc.

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As usual, the situation's complexity makes it impossible to make a satisfiable and quick decision. I'm just going to list a few factors that played a role without discussing them:
1) It is impossible to know whether the payment comes from a previous scam or not.
2) It is impossible to know whether the contact is a proxy, part of the team or a 3rd party (anything they say at this point can be considered dishonest).
3) Luckily, nobody got harmed from this incident (so far).

---

With all that being said, a decision has been made: The refund is going to be partial. The amount proposed was agreed to by the project. The user has also explicitly stated several times that they are no longer responsible for whatever happens on the forum regarding this (e.g. scam accusations, negative ratings, etc.). I'm locking this thread now, as it has reached some consensus. A full disclosure on who the parties are, who found important information and when this happened will be revealed soon (probably in the form of a scam accusation due to the fake team).

I thank everyone for their valuable input on this matter, regardless of whether I disagree with what you said or not.