Bitcoin Forum

I would like the forum administrators to make a decision on whether PPT operators actions contributed to the size of the BTCS&T collapse. Now that pirate has a scammer label should people who enabled his behaviour be given a tag as well ?

I think they should only have labels as long as pirate hasnt paid back his debt. Im in two minds about it and who is more or less responsible. Does the scammer label even matter ?

I also feel like some action is needed, a persons member-status in here should stand for something.

Each case should be evaluated on a separate basis though. I don't believe that all Passthrough OPs deserve to be labeled as scammers immediately, or in a few rare cases, not labeled as scammers at all.

To throw a blanket-label on every PPT now, would essentially be to invalidate every GLBSE contract on the market, as terms for certain programs were very clear from the start (basic pirate default clauses rendering certain bonds worthless that people purchased full knowing ahead of time)..

NOW, if funds were mis-handled or the acquiring of funds under some sort of misrepresentation has clearly occurred, then by all means, a scammer tag should apply (lying about WHERE funds will be invested and to what exposure etc.). For example, taking funds that were supposed to be used for INSURANCE against a 'pirate default' and allowing greed to see those funds secretly invested INTO pirate's program to get a high interest yield would be the WORST and most obvious case, as has been shown to have happened already.

This is just a slippery slope once set upon.... and each 'judgment' should be handled with care.

I agree with this.  A scammer should have done at least one of the following two things:

• lied in the security's description or in some other provable context (e.g. posting deliberate misinformation on forum)
• did not perform according to the security's terms

I don't think that the act of running a pass-through, by itself, is scamming, as long as the pass-through details and risks were disclosed appropriately.

I agree that if they are listed on the GBLSE AND that DISCLAIMED the possibility of complete loss then they SHOULD NOT be labeled a SCAMMER.   This is along the lines of if the risk section of the prospectus.    The investors are responsible for due diligence and if this was disclaimed then they deserve to bare the risk associated with that type of investment.  I read through some offering statements on the exchange and some did outright state this in clear English.


Dalkore

I disagree. Running a PPT was paying Pirate to make you and your investors the recipients of obviously fraudulent transfers of other people's money. If that's not scamming, what is? But as I've said elsewhere, I'm willing to give PPT operators who aren't on record as saying they knew or suspected it was a Ponzi a free pass this one time. But in the future, I will be holding people to a higher standard.

But if the investors knew going in that a pirate default meant a pass through default, how is the pass through operation scamming?

No. They were just resellers of the Pirate security. Independent entirely. They should not suffer any liability for the product they only resold.

I bolded the portion that explains that, which you seem to have quoted without reading. The pass through operation is scamming Pirate's other victims by hiring Pirate to take money from them and give it to the PPT's customers. If I help a woman hire a hitman to kill her husband, I am as responsible for the murder as the hitman is. This is true even if I was completely honest with the woman and got her a trustworthy and reliable hitman.

Really? So if someone wants someone killed and they pay me to hire a hitman for them, I'm not responsible for the actions I paid the hitman to take because I'm just "reselling" his product?

I see no fruitful way of arguing this. Your money is/was with Pirate. The PPT operators only provided a service and collected a small fee for that service. I can't perceive them as having any responsibility nor can I see any value in persecuting them.

As for murder as a commodity, if somebody needs a hitman, they are going to get it without a middle-man if they are truly serious.

You're still responding to the argument that PPT operators defrauded their investors. That's not the argument I'm making.

I agree, but that doesn't reduce the middleman's responsibility. Especially in this particular case because it was difficult to invest in Pirate directly. That's why the PPTs started up.

Ok, I see your point of view.  But, I see two differences:
1)  The scam wasn't known as a scam for certain.  You KNOW that a hitman is going to kill someone in your example - you don't KNOW that people are going to lose their money in a scam until it happens in the case of pirate.  Sure, there was a strong likelihood, but it still wasn't certain.
2)  I see risky investments as a form of gambling.  If people want to gamble their monies away, or give it to a homeless guy on the street, or light it all on fire, it really doesn't make a bit of difference to me.  And I would even help them do it if they wanted and I had some incentive.  Therefore, I don't feel as though the people who invested in Pirate were wronged.  They knew the risks of investing up front, and they chose to invest anyway.  I wouldn't say they got what they deserved, but at the very least, they understood the risk they were taking by investing in the scheme.  That is far different from someone who unknowingly has a hit placed on them.

Do you also think casinos are in the wrong for letting people lose money?  And banks that let people withdraw their money to spend at casinos?

In the hitman example the middleman knows what he is doing. You don't have any proof that PPT operator knew what was going on. If you just carry a bag of money without knowing that is for a hit you are not responsible for that crime.

Yes, it was.

The scam wasn't that people lost money. The scam was the transfer of money described as "investments" when there was no evidence of any actual investment activity. That was known from the beginning and repeatedly pointed out by many people, including me.

Also, would you accept money from one person to give to another if you know there's a "strong likelihood" that the money pays for a hit?

I agree. But gambling doesn't involve fraud. Fraud and gambling are two different things.

Correct, they chose to invest, but their funds were in fact never invested in anything. They were scammed. They didn't lose on a risky investment -- there was no investment.

Yes, they understood the risk but they didn't lose money because what they were doing was risky, they lost money because what they were doing was a scam.

No, those are risks. This was a scam. That is gambling. This was a scam.

Actually, they all knew or should have known. But as I said, I'm willing to give any PPT operator who is not on record as saying they knew or suspected that this was a scam a free pass this one time. However, after this, everyone should know how to spot an obvious Ponzi scheme or related scam and I for one will no longer accept the "I didn't know for sure" answer.

The only question I would be interested in if I had paid a unaccountable pseudonym to give money to a BullShit trust would be:
Did they actually give my money to the bullshit trust?

This is bitcoin, if they had given the money obviously they would have proven it beyond a shadow of a doubt.  If they didn't, well I'll let you connect the dots. 

Speaking as someone that watched it unfold as a lurker, I saw it for a scam. 7% a week is always a scam.

Sorry, but everyone in the situation knew what was happening.  There was no murder, in which the murdered person didn't know he was going to be murdered.  This is therefore an invalid argument. 
The investors knew that it may be a scam. 
If someone comes up to you and says "I will steal your money if you give it to me, but I will fake very high interest rates to make it look as if you're making money." and you give him money, when he steals the money, did he really scam you?  Scamming is lying/not fulfilling a contract.  If, as you said, it was so blatantly obvious that it was a scam, then the PPT operators didn't scam anyone.  They merely offered a service that they knew no more about than we did. 

Based on what I was trying to convey in the following quote that originated from the 3rd post in this thread...


Using 2 specific users for the following example....
Here is essentially what I was referring to in my post above and perhaps the basic criteria that I might apply if faced with helping to make the final decision:

PatrickHarnett
- Solid GLBSE Contract with clear default information.
- Even now, continuously working towards closing out his 'business' in a timely fashion, above and beyond original contract(s).
- Never lied about destination of certain funds, risk involved or consumer/buyer/investor protection.
- Good communication throughout.
*NO SCAMMER TAG*

hashking
- No clear contract(s) using GLBSE, rather used his own platform, for the most part, limited GLBSE.
- Currently estimates longer-than-should-be 'closing-out' business plan, even for Insured 'Securities' etc.
- Masked destination of certain funds received, misappropriations, re-invested Anti-Pirate 'Insurance' back into Pirate program.
- Complete LACK of communication, clarity and policies etc.
**SCAMMER TAG Deserving**

Disclaimer:
The above is based on common Forum knowledge. No assumptions were made by me during the above points.

This is why I feel that blanketing ALL Passthrough Operators would be unfair and counterproductive in a way, especially for those OPs who are working towards making things 'right' by their own standards and going above and beyond what even their original contracts offered.

Thanks for taking the time to read this,
bitlane.

You kind of just contradicted yourself. First you say that everyone knew what was happening. Then you say the investors knew that it may be a scam. Did the investors know it was a scam?

Are you saying everyone who claimed it wasn't a Ponzi was lying and that everyone really did know that it was a Ponzi scheme all along? If so, the PPT operators who didn't say they knew it was a Ponzi were lying, just like Pirate. Right?

If it's your position that everyone knew it was a Ponzi scheme all along, then the PPT operators were knowingly participating in a Ponzi scheme. They're as deserving of scammer tags as Pirate.

I think there are two questions to ask in each case: (1) whether they actually gave the money to Pirate as described or were effectively running their own synchronized Ponzi, and (2) whether they shilled on behalf of Pirate, by claiming to know his business model, cash flow, whatever.

Affiliate scams and confidence men certainly deserve the tag, but not flat "honest" pass throughs, who could plausibly have been duped.

Case-by-case determinations should be made, I think.

This one time, yes. But next time, nobody has any excuses.

Joel, you give people too much credit. Some of us here are dumber than a box of hammers.

Personally I also feel that it is not the PPT operators we should be going after, but rather those who formed part of the Pirate propaganda machine irrespective of whether they operated PPTs or not. So if you operated a PPT, but did not campaign for Pirate you get away with it. Simply providing a service that the market demands.

But if you went around claiming to know the business model, saying stuff like "No-one with half a brain thinks this is a ponzi" and tirelessly shouting down anyone who dares disagree, then you were either on the payroll or so incredibly stupid that others should be warned against paying heed to anything you say. Unfortunately we can't prove who is unethical and who is developmentally delayed. So I suggest that they should be made to choose between scammer tags or dumbass tags. It has to be one of those.

I can't help but think of the 'Good Sumaritan Act' and how it saves people from being charged with assault or sued by a would-be-victim, after they break the ribs of that 'victim' who's life they are trying to save by performing the Heimlich maneuver, in order to actually save that person's life, rather than leaving them to choke to death...LOL

There is no way to prove payb.tc, the operator of the BitcoinMax PPT, knew or did not know the nature of pirate's operation.

That doesn't matter; the reasons payb.tc is a scammer are that he

1) refused to recognize the reality of the BS&T default, preferring to remain mired in the past and demand full payment

2) refused to comply in good faith with pirate's request for PPT account information

3) refused to comply with his own BitcoinMax account holders' requests that their account info be passed through to pirate

4) suddenly proclaimed an 'all-or-nothing' stance towards pirate, despite having been willing to trust him previously, only after the default was announced


Payb.tc, next time both your PPT account holders and pirate ask you to do something (such as pass their PPT account info through to pirate) DO IT.

Ok, let's turn the situation around then.  Let's assume you are right, and EVERYONE knew this was 100% a scam and a ponzi.

Then why do the pass through operators get their reputation dinged again?  For servicing the people who wanted to gamble their money on the scam?  Uhh, not in my book!  They held up their end of the bargain, which was to pay out as long as pirate was paying out.

And I don't see how "knowingly participating in a Ponzi scheme" makes someone a scammer.  There are plenty of openly-ponzi "investments" or "services" or whatever you want to call them on this forum.  Are you saying that every one of those operators should also receive a scammer tag?

To me, the scammer tag is a result of someone not holding up to their word or contract.  Pirate should receive it, since he promised to pay out, and did not.  The insured PPT's that didn't pay out should receive it, since they promised to insure their deposits, and haven't paid them out.  The uninsured PPT's should not receive it, because they did what they said they would do.  They didn't scam anyone.

Now, certainly, I'm not saying that participation in a Ponzi scheme is legal, or morally "good", but I fail to see the connection between that and the scammer tag.  As long as the PPT's were up front about what they were investing in and upheld the terms of the agreement they stated, they did not scam anyone.

He had to do these two things, for reasons that I explained elsewhere. He had no other way to protect those of his investors who did not wish their information given to Pirate. Had he passed through information to Pirate, there is no way he could have prevented Pirate from trying to settle his debts directly, depriving other of his investors of their rightful share of those payouts. If you and I each half own a house, you can't cut the house in half, sell half of it, and keep all the profits as "your half". We are each entitled to half of the proceeds of the sale of any part of the house. You are not fully entitled to all the proceeds of the sale of half of it leaving me to try to sell my half by myself.

For the same reason Pirate does.

There is no such thing as "gambling" on a "scam". Gambling and scamming are mutually exclusive.

Knowingly participating in a Ponzi makes you a scammer because you are paying the Ponzi operator make you the recipient of fraudulent transfers.

They did precisely the same thing Pirate did. In fact, they paid Pirate to do what he did!

They scammed everyone else who paid into the Ponzi scheme, just like Pirate did.

I guess here is the meat of what we disagree upon.  I don't agree that participating in a ponzi makes you a scammer.  And pirate is only a scammer in my book because he didn't admit it was a ponzi up front.  If he had admitted it was a ponzi from day 1, then I wouldn't see any reason to give him a scammer tag.

Open ponzis are illegal only because the law says they are.  I don't see participation in a ponzi as any different than other forms of gambling.

One definition of gambling:
2: to stake something on a contingency : take a chance

The PPT operators didn't admit it was a Ponzi either.

Then you don't understand what a Ponzi scheme is. The crux of a Ponzi scheme is that depositors are told that there is some underlying business or investment that does not actually exist.

"A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going."

Right, but you can't take that literally. Otherwise, everything would be gambling. Crossing the street takes the chance that you'll get hit by a car but it's not gambling. When you are being lied to about what is happening with your money, that's scamming, not gambling. When you play craps, that you might win or lose is gambling. That the casino might not pay you even if you win or that the table might be rigged is not part of the gambling equation.

In these cases where they advertised clearly what they were exactly reselling, I see no scam.

I have only followed, and not too closely, Goat's PPT. He insured Pirate's bond partly, and horoured his contract. No scam there whatsoever.

These people didn't claim to respond for Pirate's solvency and there very existence proves there was a suspicion something might go wrong. Am I missing something important?

Again, you're responding to the argument nobody's making. We're not saying PPT operators scammed *their* *depositors*. We're saying they scammed *other* *pirate* *depositors*, just like Pirate did.

Again, we're not saying PPT operators scammed their own depositors.

For the fiftieth time, like seriously -- you're missing that they paid Pirate to make their customers the recipients of fraudulent transfers of other people's money where they knew that other people were told that money would actually be invested and where they knew that paying that money to their customers didn't constitute a legitimate investment of any kind. PPT operators paid Pirate to cut their customers in on his Ponzi scheme.

Did PPT customers get any sort of special treatment? Better rates? earlier payment? Honest question, I wasn't following that closely as I totally disregarded Pirate's obvious Ponzi while it was actually running.

Ok, this is the first time I have heard you say that you don't consider the PPT's to be scamming their depositors.  This was the argument I was trying to dispel the whole time, so I am glad we agree.

One question remains though Joel... if the PPT's deserve a scammer tag for aiding people in participating in the ponzi, wouldn't everyone who participated in the ponzi also deserve the scammer tag, since they "stole" funds "illegitimately" from other investors?

That's what I'm making out.

I'm trying hard here to understand how a late entrant in a PPT is in any better position than a late entrant directly in Pirate's Ponzi, other than the fact that the PPT operator may suck up a bigger part of the butthurt when it finally collapses. This makes the operator a scammer? makes no sense whatsoever. If they were indeed having a better rate then he'd have a point.

In any case, by this argument all securitization should be banned, which I think it's ridiculous. The PPT themselves weren't opaque and were very public about their exact conditions. I believe this is perfectly legitimate.

People who invest in non-audited securities directly or indirectly do so at their own risk and they should be able to shoot themselves in the foot. GLBSE will start offering some surface proof of operation for those who want some standarised book-keeping of ventures. And in any case you should be wary of anything you cannot very closely verify.

These two items are a smokescreen and make zero difference.  All of your other points stand. 

Yes. But again, I'm willing to give people who can even remotely plausibly claim that they didn't know it was a Ponzi scheme a free pass this one time. But hopefully now everyone understands that when something is obviously a Ponzi, it is in fact a Ponzi (or related scam).

Knowingly paying someone else to make you the recipient of fraudulent transfers makes you a scammer.

Again, nobody is arguing they scammed their own depositors. You can stop beating to death the argument that nobody is making.

The problem is that they shoot other people in the foot, not just themselves. When someone invested in Pirate, they were paying Pirate to take someone else's money -- someone who was told their money would be legitimately invested -- and give it to them. Clearly, that is not an actual investment in any sense of the word.

I don't see how you can make this argument work unless you want to argue that Pirate also did nothing wrong because everyone who invested with him knew what they were doing and he didn't do anything he promised he wouldn't do. The scam is not that Pirate couldn't make payouts. The scam is that the transfers were fraudulent because there was no actual investment activity.

Again, Joel, why are you targeting the PPT operators themselves if that is the case?  It sounds as though EVERYONE who received funds from the ponzi more than they invested should be labeled as a scammer, based on what you are saying.  And everyone who received less funds from the ponzi than they invested should be labeled a victim.  True?

I'm making the arguments that I'm making because I believe that they are true and because I believe that getting the community to accept them will reduce the number of times the community needs to learn this painful lesson. Passing the buck doesn't cut it with me.

Only if you have any way to know these transfers are fraudulent. That's like labeling me a scammer because I got interest in my account in Barclays and they made money from fraudulent operations. I have absolutely nothing to do with that and cannot reasonably be held accountable.


I mean that they were very public to everybody, both clients and not. Transparency is a factor here, it's not like PPT ops ran secret rackets where they positioned themselves better in the pyramid. This simply did not happen at any level AFAIK.


It's a derivative and I've seen much worse IRL.

I will continue defending these practices as perfectly legitimate (talking about PT securities in general) and put the limit at the personal responsibility of people knowingly entering into opaque investments directly or indirectly. The scammer here is Pirate and knowing collaborators only, no matter how hard others may try to have a go at anyone who actually invested and lost money to Pirate (or got lucky and didn't). Other scammers would be those who knowingly participated and benefitted from the scam. To pretend someone who lost a massive amount and who's going to pursue Pirate IRL had inside knowledge seems absurd to me.

You are advocating a scammer tag policy based on insufficient grounds. I think this is a matter to approach on a case-by-case basis. A passing-through operator can be a scammer, or not.

what part of reality does this statement stem from? in fact i would be very happy to accept less than 'all', as i'm sure would most people at this point.

As you can tell throughout some of my posts before the BCST bust, I was always trying to determine which category the various PPT operators fell into:

A) Stupid, young and/or naive, totally believing Pirate's bullshit:  I agree again with something Joel Katz said:  give them 1 time pass in this scenario.  I believe PPT operator Goat falls into this category. 

B) Suspects foul play, but continues to help scammer make large money while making small money:  Now we cross into "criminally negligent" --> there must be accountability for Payb.tc as I believe he falls in this category.  He was instrumental in helping Pirate steal ~$1.5M in BTC.  he did so continuously for months and months.  Hard to believe he didn't suspect scammery and continued to promote his product so he could make a small % each week while sending the bulk to Pirate, likely knowing he was helping the scam get much bigger.

C) Totally knows what's going on, fucks over everyone to make small money while knowingly shipping huge monies to a scammer:  Under this scenario the passthrough operator is a high level scumbag.  I believe BurtW falls into this category.  Constantly shilling for Pirate, putting in his signature "Pirate is not a Ponzi" making these horribly transparent shill-threads ( https://bitcointalk.org/index.php?topic=97094.0 ) --> Dox him at the stake.

Which is obviously the case here since fraudulent transfers were the only possible business model known. (Other than obviously ridiculous things such as someone who gives away money for no logical reason and happens to choose people who would invest in something that looks precisely like a Ponzi scheme as the beneficiaries of his generosity.)

I'm sorry but I don't buy into the argument that no operators could be deluded. I also don't think this forum should label the same way proven/obvious scammers and people running dubious operations, for some arguable concept of dubious. There could be a label named "has defaulted" or something of the sort, but ultimately you cannot defend people from being reckless and not doing their due diligence.

The reason I said that is because you said it was very obvious that it was a ponzi.  So, if what you say is true, nobody knew more than anybody else (except for pirate, obviously).  If the investors knowingly invested in something that was likely a scam, and they knew it was likely a scam, they knew nothing more than PPT's. 

Now, I'm not saying it was ethical to run a PPT, I'm just saying that it doesn't really justify a scammer tag.

For only running a PPT, I would agree. For lying about having inside knowledge of Pirate's identity and business, thereby increasing confidence in Pirate and thus making more money on the PPT, a scammer tag is warranted.

By this argument, Pirate wasn't doing anything wrong. Everyone knew he was running a Ponzi. Everyone knows Ponzis must eventually default. All that's unknown is the time of the default. And it's quite possible Pirate didn't even know that much before anyone else. Sure Pirate lied, but nobody believed him, so no harm done.

And Pirate knew nothing they didn't know. So it was all just honest fun. Pirate's scammer tag should be removed. Right?

Then start arguing that Pirate doesn't deserve a scammer tag. In all likelihood, his primary business model was operating a pass through to Zeek. (And market manipulations which largely lost money but he said he was going to do that.)

I say give them all (PPTs) scammer tags.

They profited off of this bullshit.

Y'know, I do agree with you about BurtW shilliness, but I'm not sure that we can be certain enough about the actor's subjective intent.

Take Goat (please!). He sure acts a lot more humbled, confused, and pissed off at Pirate that BurtW (who is still shilling up a storm), but consider that it's relatively easy for a knowledgeable person to feign ignorance and for a smart person to play dumb. It is truly breathtaking how dumb Goat's posts are--I mean, if you take him at his word, he still think that Pirate had a super-sekrit money-making system. If you take him at his word, he thinks there's powerful evidence Pirate was never running a Ponzi. It's so dumb, I find it borderline incredible.

I agree there's a good chance that Goat got duped, but I wouldn't bet even money on it.

To my mind, the best way to separate the sheep from the goats is to determine whether they misled other people in aid of the scam. By that measure, I think Goat is a goat; viewed in the most favorable light, he had no idea what Pirate was doing, but whenever someone would point out obvious truths about the scam, he would shout them down, assert that he had a pretty good idea what Pirate was doing, and so forth.

Goat was no passive conduit of funds to Pirate, no mere public service requested by Theymos. No, Goat was an active promoter.  For that reason, I would group him in with BurtW. Even if he was suckered by Pirate (which impossible to determine given what we know), he was a useful tool in misleading others about Pirate's scheme.

Agreed. 100%. There are no shades of gray in this brutal gang rape, every one of the PPT operators who have not made good on the funds invested through them, is just as guilty as pirate, and deserves just as nasty of a consequence.

The only way out should be to compensate everyone for everything they sent through, in full, and then permanently shutting the fuck up about it.

And reset all of their experience and post counts to zero, because their is nothing heroic, supportive, or VIP about fucking people for profit.

Are you stating that the PPT operators are guilty regardless of knowledge, or that you believe they all had knowledge of the nature of BS&T? In either case, I'm intrigued to hear your rationale.

Judging anything consequential on post count is illogical and, frankly, idiotic. VIP/donator status is given solely based on a donation to the forum. If Theymos starts modifying user attributes / stats on subjective guidelines, half the forum will leave, and rightly so. The only reason this forum is still so active is because of the remarkable lack of subjective moderation.

Yes. The standard is whether they knew or should have known. A millisecond's due diligence would have made it clear that no plausible business model was known other than a Ponzi scheme or similar scam. There simply wasn't any other reasonable possibility. But they looked the other way because there was money to be made at no risk to themselves.

I cannot agree. The proof in question here is not whether a plausible business model existed that could have been the basis for Pirate's operation, but whether the PPT operator in question thought there was a plausible business model. Knowledgeable negligence with investor funds and lack of some subjective level of diligence are not the same thing. I understand it seems obvious now, but hindsight bias (http://en.wikipedia.org/wiki/Hindsight) is a real issue here. Before Pirate closed up shop, there were really only a few select individuals calling it a Ponzi. Now, I see a new poster every few minutes claiming to "have known it all along." Many possible business models exist that could make the kind of returns Pirate provided - plausibility is the question. You cannot prosecute someone for disagreeing with you on what is or isn't plausible.

I don't care about his other investors, especially those who decide to not accept the terms of the default.  They forfeited their right to a share of any settlement by refusing.

PPT customers agreed to pirate's terms for PPT funds by signing up.  At the point where they stop abiding by pirate's terms, they have broken the agreement.

As an aside, it's ludicrous to trust pirate (and an anonymous PPT operator) with your bitcoins but not trust pirate with your account info.


The recalcitrant other investors have no "rightful share of those payouts" for the reasons I stated above.  In contrast, I (by intending to comply) do have a rightful share.  And paybtc had no right to deprive me of the opportunity to negotiate or whatever directly with pirate.  That's why he deserves a scammer tag.

You are using the wrong (outdated) frame to conceptualize the PPT fund.  Before the default, your metaphor was apt.  After the default (IE during the wind-down) the PPT fund is no longer like a house. 

That is the same problem paybtc encountered (and unfortunately passed through to his customers).  Previously indivisible assets become liquid in a bankruptcy, for purposes of distribution to creditors.  We asked him to leave the Before Time (the Long-Long Ago) and join us in the post-default present, but he refused to accept this scary new reality.

In terms of the house metaphor, think of it as a foreclosed property being sold at auction (liquidated) and the proceeds being divided among those following the rules set by the executor.  The executor is pirate in this case, which is a conflict of interest, but who else could do it?   :)

i have the right to get paid for my time.

those of you demanding i do something have never actually offered any kind of compensation, they just make demands of me like i'm some kind of charity.

go negotiate with pirate if you want to.

if you want me to do it on your behalf, make me an offer or STFU.

You may not care about his other investors, but he has to. And you can't just add new terms to an agreement and declare other parties to have forfeited their rights by refusing your new terms. That would be scamming, and that's precisely what didn't happen.

PPT customers had no agreement with Pirate and they certainly had no agreement that required them to do whatever Pirate asked them to do at any time.

I completely and totally don't agree, and I suspect a lot of other people don't either. In any event, other people will have different priorities from you.

He absolutely not only had the right to deprive you of that but the obligation to do so. You, on the other hand, have no right to negotiate with Pirate and deprive his other investors of their rightful share of any payout you might receive.

Fortunately, it didn't make any difference. Not surprisingly, there weren't any payouts regardless. So all he did was prevent Pirate from getting identities where we have no idea what he would have done with them.

For PPT operators to be deserving of a scammer tag, my opinion is that:

It must be demonstrably proven that 1) a PPT operator knew Pirate's operation was a scam and 2) said PPT operator did not disclose his knowledge of Pirate's scam to any/all investors and/or 3) said PPT operator did not give explicit and sufficient warning to all investors that there was a reasonable and real risk of some or total loss of deposits.


As far as I know, it's hard to scam someone when you don't know you're scamming someone.  I think scamming is largely about intent.  

Imagine that you've never seen a change machine before, and that I explain to you that you will receive four quarters by inserting a dollar into the machine.  So, you insert a dollar into the machine and - KaBLAMO! - you hear a knocking inside the machine and it shuts down.  Not only won't you get your four quarters, but depending on your personality you might be pissed at me for suggesting that the machine would work in the first place.  But ya know what?  I had a reason to believe that there was a damn good chance that the machine would work for you as it has worked for me.

Now imagine that you've never seen a wishing well before, and I tell you that if you throw a dollar bill in the well you'll get four quarters in return (you need toll money badly).  So, you toss a dollar in and - .......... -  nothing happens.  You're pissed because you lost a buck.  You ask a stranger nearby if he's ever received four quarters for a buck at the wishing well, but when he tells you what a wishing well actually is, you begin chasing me angrily with clenched fists.  But ya know what?  You can't catch me because I'm driving a Porsche while screaming "I own part of the well!" out the window.

It sounds like, given the presence of number 2 above, you're responding to the argument that PPT operators scammed their investors. I don't think anyone's making that argument.

The argument is that PPT operators scammed other Pirate investors by paying Pirate to make their customers the recipients of transfers they should have known were fraudulent -- transfers where Pirate obtained the money by representing that the funds would in fact be invested and where they knew that transfers to PPT operators were certainly not a legitimate investment of any kind. PPT operators paid Pirate to operate a Ponzi scheme for the benefit of their customers, and they either knew or should have known that this was what they were doing.

Everyone knew Pirate's operation was almost certainly a scam. (And perfect certainty is never the standard.) No other possible business model was known and every previous such get rich quick scheme has proven to be a scam. Every single sign of a Ponzi scheme was present and there was never the slightest shred of any actual legitimate business activity. At least a dozen people were explaining on the forums why it had to be a scam. You can't stick your fingers in your ears and scream "LALALALALA!" while a dozen people are trying to tell you something and later claim you didn't know that.

Let's see if we really believe your argument though. Say another Pirate comes along with precisely the same pitch, the same vague business model, the same absence of any evidence of any actual investment activity. And say someone starts up a pass through to this new scheme, claiming they don't know it's a scam and they think it's legitimate for some reason. Because ... Bitcoin! Would you say they're doing anything wrong?

No, I would not. Would I invest? Certainly not. But I try not to condemn people based on subjective judgement.

If I had evidence that they did know the true nature, I would absolutely consider them a scammer. A fair legal system works on facts - not opinions. With all due respect, assuming you know the 'true nature' of anything and condemning people based on that opinion is nonsense. If you have facts, that's a different matter, but, at least in my humble and perhaps inexperienced opinion, innocent until proven guilty.

I read the thread title, and the OP, and gave my opinion with the knowledge that I have of the situation.  I wasn't really responding to anyone else specifically.  I'm just thinking within the context of the 'scammer tag' and what I think would also be consistent with the moderation on this forum.


Thanks for the clarification, but I think that something similar to what I said earlier still applies here.  I think that if the PPT operators' knowledge of Pirate's operation is generally equal to their customers' knowledge, then I don't see how you can blame them.  The customers too "should have known" that this was what they were doing, so long as the PPT operators weren't withholding any information that would significantly affect peoples' opinions about investing.


Not everyone.  I spent a good time creating a few models that would stand a reasonable chance at creating the same returns and also mimic Pirate's payment schedule.  However, all of them required a nice chunk of initial capital and a 3rd party.  Also, if everyone thought Pirate's operation was a scam, then how did Pirate manage to vacuum 5% of the market?


To answer your question, I don't think it's a black or white situation.  Time is important in this context.  The longer a 'mystery business' operates and generates consistent payments, the more one is inclined to believe the next payment will come.  Pirate operated without a hitch for a rather impressive length of time given his rate of interest and given the size of the market.  What if Pirate had continued business successfully for another two years (albeit with declining interest rates), would you say he's doing anything wrong?  How about after three years?  After five years?  Ten?  

The way your scenario is poised, there is little information to be had outside of "here's a new guy that reminds me of Pirate."  If instead it's "here's a new guy that has made me and many others a lot of money over the past few months and he's always punctual and he's never missed a payment," then that changes things a bit I'd say.

Fair enough. But at some point you have to assume that people know the obvious, even if you can't prove it. If I take a gun hold it against your head and blow your brains out and then claim that I had never encountered a gun before and didn't know that guns do that when you pull the trigger, do you think I would get away with it? Even if the prosecution was unable to find any proof of me having encountered a gun before, I would still be found guilty.

Joel argues that it is not plausible for PPT operators to claim they did not know BTCST was a ponzi, just as it would not be plausible for me to claim I did not know what a gun does when you pull the trigger. To take the analogy furter, individual investors were playing russian roulette (which is stupid but not criminal), but PPT operators were playing russian roulette with the gun held to someone else's head (which is criminal). And for them to turn around now and say they didn't know doesn't pass the sniff test.

To my point, all we new that it could be a ponzi, pirate could simply run away, or that if he would die because of smt we wount get funds back...
So why would PPT operators be guilty, they gave opportunity to have high rates of return for everyone and possibility to get out when people want...
No one was offering glbse ppt before people asked to do so.

OTOH (arguing with myself here  ;)) if everyone knew that it was a ponzi then PPT customers were willingly playing russian roulette and the operators can not be blamed.

Problem is that either EVERYONE knew it was a ponzi, in which case no-one was scammed, and therefore no-one is a scammer (including pirate), or not EVERYONE knew it was a ponzi in which case it is impossible to prove that the PPT operators were not among the few dumbasses who were not in on the game.

Still believe they should choose their own tags
SCAMMER or DUMBASS.
It has to be the one or the other.

Don't you have already been paid with a cut of your pass through? Or that was a payment just for you to pass BTC to Pirate but not for getting them back?

Anyway I offer 10% of my Bitcoinmax deposit if you find the way to get my BTC back -or 10% of whatever fraction of it you get.
How about it?

I disagree. Many people believed Pirate had a legitimate operation.

Pirate was the first case in the Bitcoin community where a scammer went to great lengths to build up a good reputation and even started a proper business on the side (gpumax.com). This fooled a lot of people.

With hindsight now people should be smarter, of course.

unfortunately no, i haven't been 'paid'. not with anything that can pay the mortgage anyway.

same goes for a % cut of your bitcoinmax account sorry... i have to put food on the table, so my time available for chasing magical pirate money is very limited.

Charity?
you passed an estimated (http://"https://bitcointalk.org/index.php?topic=98225.msg1074859#msg1074859") 110000 BTC to pirate. Your cut was 0.1% or ~$1,200 per week. Not too bad for such a basic website, most people dont earn that much from a full time job. And that is assuming you did indeed pass the money through to Pirate, I would like to see some transaction IDs to validate that claim because for all I know, you knew exactly what was going on and pocketed a portion or all of those coins yourself. which would give you a very good reason not to want to give pirate your customer list.

So you did your PPT for charity?  So maybe we found a PPT operator who merits a scammer tag.

my 'cut' was non-existent pirate money. i'm not sure how many more times i need to say that before people get it.

i wish i actually cashed out $1200 a week.

That's a reason for you to try to recover something from Pirate.

That you didnt is no one's fault but your own. It doesnt really matter if you lost your cut playing poker or by reinvesting it in pirate, that is your problem.

Actually, your cut was money stolen from other victims. Start paying back in full or be painted as a co-conspirator, morally and legally. No grey zone at all.

his cut was his fee for managing the bitcoinmax.com site - NOTHING more.
i don't expect him to pay that.

but want him to see to try to get some money back from pirate - which he refuses (except we pay him)

Actively solicited contributions to the fraud? Check.

Maintained resources to funnel funds collected for the fraud?  Check.

Shilled for the scammer, vehemently defended the scheme?  Check.

Hasn't made good on the money that went through his service and was delivered to pirate?  Check.

So, in what way is he any different than pirate? I cannot take a percentage of a crime and make it clean by calling it a "fee", it remains ill-gotten funds. The only exoneration in this scam is to refund, IN FULL, everything that each of the PPT operators took in. Anything less than that and they are accessories to felony fraud, and will be held accountable.

Felony fraud at a level which insures extradition from most countries in the world, including Thailand.

i don't have much choice in the matter... i'll do what i can, but i have to pay the bills, ya know? that likely means focusing on something else totally unrelated to bitcoin.

I still don't believe these numbers. Who would run this on 0.1%? There surely were timing issues around.

payb.tc, how about a straight answer: what was the interest rate Bitcoinmax had in BS&T?

Payb.tc, I don't understand why you're even giving this thread attention.  It's ridiculous to think that you're responsible for Pirate's nonsense.  After all it was clearly stated in your OP that if Pirate defaults then that's the risk all the investors take.  Never did you guarantee anything in any shape form or way.  The fact that you're a scam is, in my opinion, completely ridiculous.  It's obvious by this thread that money clearly clouds peoples judgement and intelligence.  

You could, but you'd be cutting into JPMorgan's turf.

I thought the same thing at first, but...

If someone robs a supermarket, and you help them out in doing so, are you at fault?
If someone sets fire to a house, and you help them out in doing so, are you at fault?
If someone steals a bunch of people's money in a ponzi, and you help them out in doing so, are you at fault?

Your logic is flawed my friend.  This would only be accurate if he had prior knowledge that it was in fact a ponzi scheme. As far as I know, there is no evidence to support that.

Even the dimmest bulb knew it was a scam after time had passed. Those that kept selling and collecting for the scam are just as culpable as the brains behind the scheme.

Yeah, that's an even better argument than the previous one...There is absolutely no way to prove this.  It's an assumption, and last time I checked, assumptions weren't considered legal evidence.

Then the choice is that the guy you're dealing with is either an idiot or a crook.

Is there a 'naive idiot' tag for pirate's victims?

Ugh...troll thread is devoid of intelligent arguments.  I'm out.

Been tented to give you a lot of +++++ for that.

But they , at least in the case of bitcoinmax are still running ponzis themselves........if you see the facts, "Running a PPT was paying Pirate to make you and your investors the

recipients of obviously fraudulent transfers of other people's money. If that's not scamming, what is?"  am really completly shocked about your itellectual corruptness and

ignorance to make those other people whole again.  Intellectual abetter and abider of theft i´d call it.

Of course you can´t see your own prostata to be incontinent this time again ;)

Oh my

Zyk

so did any of the PPT investors get their money back?

Are you sure you want to resurrect this dead body?

There's already a whole lot of fresh corpses we can make forensics into now...

Somebody could make a funerary, that would be bitcoin's killer biz, excuse me for the redundancy...  :D