Bitcoin Forum

So I called the guy on the email, left a voice mail and expected him to email me. Well As I was getting ready to hop in the shower he called back. Pirate40 is going to Prison...... he did not say the exchange was going to be closed cause he could not disclose that information but he asked 1000's of questions about it. When I told him I was going to move my money he said, might not be a bad Idea. I answered all the questions honestly, he had me on speaker phone and told me anything I said could be used for court purposes.
NOW
On to butterfly labs, I told him the situation with them and he told me to file complaints with the FTC and my state attorney gen...
advice for butterfly labs, expect a call lol.
He asked tons of questions about PPT operators, theymos and how to buy bitcoins.
I have to head out now but Ill update with more info to questions when I get back tonight.

Woah, What the heck did i miss? Theres alot of seemingly important information in here!
Pirate was Found and Caught?
Butterflylabs wronged you in someform?

Quit calling Mommy and Daddy to settle disputes. Instead, why don't people learn to watch how they conduct business and be careful of who they conduct business with?

I call Shennanigans!

SEC is going after pirate. There's a thread in the main forum.

Jesum dude, we need more info as you are dropping bombs all over in that paragraph. 

Also, 1,000's of questions?  Was this call over the course of several days? 

about 35 mins and recorded by the S.E.C

GLBSE he asked about
He knew all of pirates info already
Butterfly Labs I told him about and he sent me to the FTC and NCDOJ, can prove that with email responses and Ticket I.D.
he noted on both of them,
Call it what you will Inaba you will get a call or a letter I Bet 50 Coins on that lol

OK, now I can decipher the original statement......the exchange is GLBSE, and you are thinking of moving your money off of the platform. 

10-4. 

Lol, sounds like he said "I don't care, go on a government goose chase (http://www.youtube.com/watch?v=JtEkUmYecnk)." Are people really this inexperienced with bureaucracy? I can see the AG enthralled with your story of how website members ordered computer equipment that was promised in 4-6 weeks, and it actually took 9-11 weeks to arrive instead. I'm sure they'll have a whole team (http://www.youtube.com/watch?v=pBcNpXmr-Ps) on it in hours.

I'd say that's excellent news.

Why?  You think he was just going to pay everyone in full tomorrow except oops he is going to jail so he can't.

He wasn't ever going to pay anything.  Either he can't be (because he stupidly lost it) or he wasn't because he figured he got away with your cash.

He is scammer, thief garbage.  We aren't talking a couple GPUs here but millions of dollars.

It's really bad news for people who received any kind of payout from pirate during the whole operation. Google clawback (http://dealbook.nytimes.com/2011/08/17/madoff-trustee-gets-a-green-light-on-clawbacks/). Welcome to the underside of the bus.

I'll just leave this here : https://bitcointalk.org/index.php?topic=112402.0

GLBSE is based in the UK and is subject to regulation by the  Financial Services Authority (FSA), we are in the process of becoming a registered company that meets all conditions to carry on business.

We have not been contacted by the SEC and are not subject to SEC regulation.

Nefario.

You're being pretty hard on garbage there. At least garbage is honest.

All of this, down to involving the SEC (who will now be all over this board), is a result of people allowing their obsessive acquisitiveness (greed) to overtake common sense. I watched the Pirate drama unfold and only rejoined this board when it fell apart.

I sometimes wonder if this board has a large share of dumb smart people or smart dumb people.

I was just going to post that link... makes a lot more sense now.

Everyone who was a part of that operation should have known better.  It can't come as a surprise to *anyone* that the legality of BS&T was dubious at best.  Since the beginning.  If you are a part of an illegal operation, you should be prepared for the consequences, and don't expect to keep any "profit".

You're preaching to the choir. Malevolent (https://bitcointalk.org/index.php?action=profile;u=23092) has one of my many prescient warnings (and really my last public appeal to logic on the matter) as his forum signature. And you're right, if pirate was involved in any additional illegal activities, such as laundering, etc, welcome to the second set of wheels on that bus. Good luck in not ending up in Gitmo (http://www.aljazeera.com/indepth/opinion/2012/09/201291872137626701.html?utm_content=automate&utm_campaign=Trial6&utm_source=NewSocialFlow&utm_term=plustweets&utm_medium=MasterAccount).

http://eleanorstrousers.files.wordpress.com/2008/09/government-t.jpg?w=500

I made the comment in that thread that this is not related. Theymos decided in our shareholder meeting on Friday night/Saturday morning to sell his stake. He doesn't want to be a part of the process of GLBSE becoming legitimate.

Alright, fair enough.  ;)

Two problems with this... I would love to see how they can clawback BTC (And what is the value of that BTC?)... but more importantly, I would love them to formally acknowledge that BTC is a legitimate currency.

That's the problem with any legal action by any state government.  The minute they enforce any monetary rules on Bitcoin, they legitimize it and that opens up so many doors and cans of worms that they will avoid that at all possible costs.  Right now, it's imaginary nerd money, no different than WoW gold or the like, and that's just fine as far as they are concerned.  If the SEC weighs in and imposes sanctions, well then, it becomes something much more than imaginary nerd money.

Best news all day.

http://www.safetygoat.co.uk/bckup/goat_2.jpg

I bet Goat is reeeeeal afraid now sitting on his boat in the middle of a flooded rice field watching for the Hueys to arrive.

They don't have to acknowledge bitcoin as a currency, just that it has value. The government only recognizes it's own currency and by all accounts by law in the united states if you have a debt to settle you must allow for it to be settled in federal reserve notes (e.g. even if a farmer owes you a bushel of apples by contract you must allow for him to pay you consideration in dollars. Annoying, no?). So the way the government will do the clawback is, after determining the identities of the pirate payees through various means (including public record of your IP address on your bitcoin transactions and contacting your ISP), they will assign some arbitrary US dollar amount to what you owe and say "you must pay this to the court." If you don't pay it, then they'll garnish your wages.

If you're out of the country, then they'll probably be shit out of luck, but you never know. If they can dox you, they might issue a bench warrant.

Exactly. It wouldnt be any different than if this was a swindle with foreign currency (which is also not legal tender anywhere), stocks,  gold or cat food. Then again, I dont know how much the SEC has to say about cat food, but possibly they do have some authority when it comes to trading future contracts or whatever.

You mean write, right?
Ps. Since we're leaving things here (https://bitcointalk.org/index.php?topic=110062.msg1214580#msg1214580)...

Why would it not be?

Now, elaborating on that bit might be useful. Is some zealot mixing up Mt. Gox in this?

This would be very annoying and counterproductive IMO. :-\ Not looking forward to another regulation war, I hope they don't try that.

IANAL

It becomes money what is what bitcoin has been since it was first created. In fact all governments will avoid the vast majority of  regulatory problems and cans of worms by simply treating bitcoin the same way they treat foreign currency. The SEC is simply following the lead of the Brazilian regulators and treating bitcoin like what it really is and regulating securities in the United States based on BTC that same way they would regulate securities in the United States based on CAD or EUR or any other non USD currency, as is their mandate under existing law. As for what a BTC transaction was worth in terms of USD in the past this is trivial to establish since one has both a blockchain time stamp and easily established published historical BTC / USD exchange rates.

By the way stealing bitcoins is subject to that same laws for theft that apply any valuable item. For example if one steals bitcoins in a jurisdiction where the punishment for theft is the amputation of one right hand, then the fact that the law in question proceeded the invention of bitcoin by over 1300 years does not negate the applicability of this law, in that particular jurisdiction, to the theft of bitcoins.

American regulatory agencies aren't exactly famous for respecting their jurisdiction when it comes to shutting down .com sites...

No offense to BitcoinINV, but I would prefer that information about bitcoin that will be used IN COURT is not provided by random forum users.

In addition, please do not inadvertently link BFL to pirate's scam.  BFL has not violated an SEC regulations as far as I know.

I don't think posts implying that GLBSE has not been legitimate in the past are going to be helpful to any investigation of its activity.  The DoJ has a long reach and where your business is based is often less material to their powers than whether you are conducting business with people in the US (see online poker debacle).  A number of countries have laws which make it illegal to offer unregulated securities to people who don't qualify as "sophisticated investors".  You may or may not be in the clear, but don't assume that you are purely on the basis of location.

Get legal advice now.  Even if you're cleared of any wrong-doing, the cost of complying with investigations by financial regulators can be devastating.

Is there a case where the registrar was based outside the United States and the .com was shut down by the US Government? The best example to the contrary is thepiratebay.org where the PIR registry is based in the United States but the registrar is not. GLBSE.com is not registered by a US based registrar.

QFT. There are some valid concerns about BFL, but trying to get them shut down or cause them issues for no reason doesn't help anyone.

Who should it be provided by?  Or are you saying that we are supposed to not talk about anything that it is being investigated by the SEC?

I must admit this is sad that the Internet is not decentralized enough to prevent such moves. TLD .com is managed by Verisign which is based in US, therefore it would be prudent to move GLBSE onto a different TLD, with a registrar and the TLD registry based in some liberal place.

Information should ideally be provided by nefario or PPT operators' lawyers.  If not lawyers, then at least knowledgable and respected forum members.

BitcoinINV runs a GPU farm based GLBSE asset (ironically more at odds with the SEC than BFL is) and would benefit from the government hassling BFL.  In fact, he would only benefit if BFL is not a scam but the government hassles them anyway, as if BFL is a scam an investigation would not change the availability of ASIC devices.

Getting BFL involved in this is nonsensical and frankly, childish by the OP. Wont go anywhere.

However, it could be worth mentioning bitcoinica to them. Im sure they would be a whole lot more interested in that.

It would be prudent for all Bitcoin services which do not require a physical nexus or an interface with the legacy banking system to operate anonymously on Tor like Silk Road does to insulate them from future changes in the law and/or extra-legal regulatory harassment.

The thing about BFL sort of came out of the blue.

~pyotr

Temporarily at least. There's other ASICs in the pipe that would end up eating his lunch anyway.

Depends what you mean by helpful. If you mean "help conceal the facts of the matter", then no. Otherwise, yes.

Lol, so whats the relationship between Pirate thing and BLF?

True, but then again they are cutting themselves from a big portion of customers who never heard of / used TOR.

The guy has a few Single SCs on order (4 I think), so he should probably avoid screwing over BFL...

They both netted a pretty good haul.  That's the way I see it anyway at the time of this writing.

Put another way: 'subscribing'.

BFL????what need is there to fuck BFL with SEC?

Sorry, I did not see this but here is what I don't understand (also I would like to know if anyone here has taken the Series 7 exam) how can SEC be involved in this problem both for pirate and BFL.  Securities Exchange Commission deals with registered securities so who registered with them from either group?  Companies such as BFL become state problems in which they are legal entities for and same with any pirate ventures as well.  As for GLBSE again did they register as a US entity and trade company securities and not bitcoin developed or funded properties.  Again SEC would work with the state the company was established in and they also not discuss the status of an individual who is under criminal investigation.  

Basically if an SEC agent did call which could happen it is someone trying to make a name for themselves.  Any SEC investigation will yield nothing but if you wanted to have teeth in this I would have been worried if you said Secret Service since they handle currency issues which Bitcoin does that since it used to transfer funds arround the world.  

As for BFL not sure why SEC would care since they are a privately held company but if that is not the case let me know so I can get some stock or bonds.  

We use the terms stocks and bonds but that does not mean that SEC has jurisdiction over them since it is not a registered or recognized instrument.  If that was the case, the next bogus coupon you see or even coupon managment at the grocery would fall under SEC if we follow this train of thought.  I really don't want to get broker dealer license just to by some milk but maybe you do.

Enjoy and yes I do have a finance background and I have worked with the SEC.  

People turning State's evidence in ...3....2......1.....NOW!


This is some serious s**t people.   Sure we let of bankers that commit fraud with Billions but they are most likely just looking for an excuse to come down hard on our alternative.   This is why I was going after all the illegal businesses that were trying to IPO through this forum months back.   It was only a matter of time.


In closing THINK ABOUT THIS:    Pirate going to prison?   Maybe on a reduced sentence.   You think he might not of already turned State's evidence and is spilling his beans right now?   While everyone was fawning over him, they most likely thought he was a friend and told him many many things that they thought would never come out because he was their buddy and they were in the cool kids cliche.  

How can GLBSE be under FSA?  Won't that be an issue once you are a registerd company?  I agree with you on SEC.  Just asking because I have had little involvement with FSA but I understood that they followed the same views as the SEC when it comes to companies that their ownership is traded, public or private.

Did zeek offer registered securities?
Its a rhetorical question, but to be sure, I just googled it, and found this:

http://www.sec.gov/news/press/2012/2012-160.htm

To add if BFL did violated an SEC regulation please tell, I can't figure that one out. 

"Information should ideally be provided by xxxxxx or PPT operators' lawyers.  If not lawyers, then at least knowledgable and respected forum members."

I would like to point out some of these "respected members" turns out to be people involved in not so great business ventures that have caused a lot of heart ache on this board from reading through many posts.   For the record, I am not referring to the member in the redacted text, that person was just name dropped.  

BFL:  I hope there is no connection behind the scenes of Pirate and BFL, that would throw us all for a loop.  We really need to get an official list from the OP on exactly what questions where asked and what he replied to the best of his knowledge.  

Ok, well that explains the pirate approach but SEC is going to have a problem with connecting BFL.  Again this sounds like an SEC agent trying to make a case to make a name. 

This whole discussion is sad and short sided.  Pirate sucks we all know that but I would think we all support bitcoin or somthing like it but if you want to see it end keep poking the bear.  Washington will come down on this whole thing so fast and we can go back to business as normal.

Dude lay off whatever you think you've gleaned by watching half-hour tv shows. The guy involved (Philip Moustakis) is already senior, has a name and so forth.

They didn't, hence why the agent told the OP to contact the FTC and his state AG.

http://business.ftc.gov/documents/alt051-selling-internet-prompt-delivery-rules

"By law, you must have a reasonable basis for stating that a product can be shipped within a certain time. If your advertising doesn't clearly and prominently state the shipment period, you must have a reasonable basis for believing that you can ship within 30 days.

If you can't ship within the promised time (or within 30 days if you made no promise), you must notify the customer of the delay, provide a revised shipment date and explain his right to cancel and get a full and prompt refund.

For definite delays of up to 30 days, you may treat the customer's silence as agreeing to the delay. But for longer or indefinite delays - and second and subsequent delays - you must get the customer's written, electronic or verbal consent to the delay. If the customer doesn't give you his okay, you must promptly refund all the money the customer paid you without being asked by the customer.

Finally, you have the right to cancel orders that you can't fill in a timely manner, but you must promptly notify the customer of your decision and make a prompt refund."

Dude busted a 400 million ponzi last year. I very much doubt he needs the pirate case to "make a name".  ::)

Sounds like an seasoned pro. 

I gotta wonder, did Pirate shut down before or after he learned the SEC was investigating him? He's obviously known for some time now.

He shut down on the day the SEC closed Zeek.
Pirate's rates were slightly below those of Zeek (so he'd make a profit passing funds through to there).
Now that the SEC is investigating Zeek they're interested in Pirate.

Coincidence?

I would assume he got a visit and they sat down and had a long conversation.  That is how it usually works.

Hmmm, I thought this wasn't true, but actually it does fit. Zeek apparently was 1.5 daily, or 10% weekly and I seem to recall pirate saying something like his process makes 10% and he pockets the difference. There's also that whole thing about him wanting the price to be stable.

Also, everyone who is asking about BFL, THERE IS NO CONNECTION. The OP brought up BFL with the investigator and the investigator blew him off, saying he should go to the FTC and the GA. But I'm telling you right now the GA isn't going to care about people getting their boxes 5 weeks late. Every case I know of, BFL always offered a refund when it was late (in my case, even in advance of the due date). It's a complete non-starter.

I told you I would answer questions it later,

First off I called the guy just to see if the email was true. This was all after the asked about the dividend payments. I called the guy left a voice mail, and told him to email me. I went about my day, I was about to get in the shower when he called back. He identified himself as Sr Investigator in charge, of the S.E.C and was a lawyer yadda yadda. He then Asked me first about the GLBSE, fee's, how you got money on the accounts, asked about the Mt.gox how you added funds, Hit hard on how you withdraw funds, and the amounts. Asked me about butterfly labs, Look you slow facks he has been reading the forum for a while now, with help from some interns. When I told him my name he already knew I had a mining company. Like investigators always do they ask questions to answers they already know. I told him about sonny and how much we think they have in USD. And they had not posted a picture or anything of the product they were selling, He told me to submit a report with the FTC and the NC attorney general. We talked about PPT's in depth about if people knew what they where investing in, If I knew. Yes I had some exposure but only 2 btc on a insured pass through, lol
I told him, about the system why it was called a Pirate Pass, He asked if BCST was ever pirate bank or something like that. I said I had no clue it was before my time.

If you want to tell your part here is his office direct line
Philip Moustakis  Senior Attorney (212) 336-0542  moustakisp@sec.gov
The dispatch center number is 212 336 1100
moustakisp@sec.gov

I had no intent to do anything but make sure the email was real, I usually check all that crap who comes on the forum. Its just I don't trust a 1 of you greedy pigs lol JK kinda

I'm Going to ask him join under his name, so you all can attack him and not me lol

+1

And I'd say the same for anybody who has offered shares on GLBSE; I am not a lawyer, but you should talk to a lawyer about whether or not you might have broken some laws you had no idea existed, and if you did, what you should or shouldn't do about it.

I was curious too.  I called the lawyer at 5:00 pm EST and he picked up right away.  He recorded our call and had an intern in the room with him.  I answered all his questions and he answered most of mine.  I told him how much I had invested in PPTs (883 BTC) and how much I had recovered (455 BTC).  He wanted to know how I got my GLBSE account.  He wanted to know the terms of each PPT contract.  I told him.

He told me that the SEC can investigate any security.  That securities do not have to involve dollars.  He cited two supreme court cases in which a security was not a dollar instrument one of which involved oranges.  He said that most contracts promising a return are securities unless there are specific court decisions that say otherwise.  He mentioned Mortgages and car loans as not securities.

Questions he would not answer: How did the investigation start?  How many people are working on the investigation?

He implied that he has investigated other Ponzi schemes.

He hinted that he has talked to a lot of people.  He was surprised at how young some of the people contacting him were.

He said that my explanation of a bitcoin wallet was the best he has heard so far.  There is a lot he still doesn't understand about bitcoins. I just said something simple about public keys and private keys.  Why can't all you other informants explain things better?

Best of luck to all involved.

I hope this doesn't bring down GLBSE...

The US Govt claims all .com, .net, .cc, .tv and .name domains fall under US jurisdiction. Source from http://www.wired.com/threatlevel/2012/03/feds-seize-foreign-sites/.

I believe .info and .org also fall under US jurisdiction based on the contract-holder with ICANN. The contract with ICANN is what matters, not where you bought your domain.

It will be fine, for several reasons, to a large extent a lot of whats traded on GLBSE would fall under the new croudsourcing legislation that's come out.

That takes care of Americans who've used GLBSE to raise BTC for projects. I would say the only worry would be to people who've run scam assets.

GLBSE itself is based in the UK, and comes under FSA regulation which is something we're working on.

I enjoy GLBSE, I hope it don't either. From the feel of what I got from him is, he was after pirate, and seeing if the PPT operators had any fault in it. Wanted to know what is going on with BFL. Then was looking or money laundering areas, disguised on the exchange. It seems lots of people have talked to this guy I was just the first lol. Thanks for filling my inbox.....

Where is the papers you filed? You do know the S.E.C has nothing to do with this, and you would better off contacting the IRS before S.E.C. Another person trying to create FUD, for benefit. Plus I am surprised the S.E.C would even discuss this since it has nothing to do with gold, or USD. I feel your lying I want proof you even made the call, and someone talked to you. Why didn't you record it? Any smart person would have hit record and let the person know.

Took them 20yrs to make a case against madoff and pirate is already getting the look at. If you believe any of this your a fool.

Well looking quickly, the SEC does investigate and prosecute ponzi schemes. I thought that would be the FBI's department (fraud).

Numbers above call him yourself lol Email whatever get off my nuts, if you want copies from me gweedo. Use the U.S. Freedom of information act, they will be there in about a week.

Nefario Ill email you everything I can recall if you would like.

The SEC is responsible for civil litigation of securities fraud.

The following organizations are responsible for criminal enforcement of fraud :

Department of Justice Federal Bureau of Investigation
United States Postal Inspection Services
Internal Revenue Service Criminal Investigation Division
United States Secret Service

Good, because I have a listing I'm considering  :D

Call then come back and tell us :) please, then you can say sorry for being your normal turd self and doubting me.

Read the whole post as well other people have called, and people have been mailing me that called as well.

Yeah, for Pirate. That scam was hilarious to watch unfold though. Thanks for the free entertainment suckers.

http://www.sec.gov/news/press/2012/2012-112.htm

Bitcoin would be small stuff for Philip after his previous case.

The guy might have a genuine interest in bitcoin...besides him investigating pirate as part of his job.

I stopped reading here and just concluded that you're horribly, horribly wrong.

It's the SEC. Pirate would get a fine smaller than the amount he stole.

I'd imagine this has already happened for two reasons:

1) Pirate hasn't posted for a long time.
2) This guy doesn't seem to care much for the SEC's typical policy of maintaining confidentiality of an investigation and seems to be talking to random victims of the scheme. It suggests the case is in a high state of development.

Small stuff monetarily to be sure. However, as far as sending a message and making good publicity it would be larger than his previous case, which was a mostly local to New York Long Island ponzi.

You forgot the US Attorney's Office.  They've been extremely prominent in past ponzi prosecutions.

Which just so happens to be his former employer.

dearest OP,

get a life douchebag

For those who might have other skeletons in the closet, here's another suggestion that may or may not be worth considering:  Run like a bastard!

Most people don't consider lawyers to be policemen.

With due respect, they'll almost certainly pass any information they gather about GLSBE on to their UK counterparts.  And there's a very good chance that they'll look at whether GLSBE has broken any US laws (you don't have to be based in the US in order to break US laws).  Never take the attitude of "she'll be right mate" once you're on the radar of a financial regulator or financial intelligence service of any nation because there are so many mutual aid agreements between nations that your head would spin.  If there's any chance that US citizens are laundering money or evading taxes through your service, you're a potential target of both US investigators and those in the UK.

The US Attorneys are the chief federal law enforcement officers in their jurisdictions.

http://www.justice.gov/usao/

I would expect them to, and this is not a problem for us.


There are two issues here

1) Taxes, which only really becomes an issue when amounts involved become significant.
2) Money laundering, which IS an issue, and is one we're working on, it becomes more of an issue as amounts grows.

Nefario,

I think that you forgot you are the sole issuer and custodian for counterfeit, unregistered securities. I think that would be a problem for you.

Yes we've got frequent offsite backups, you've need to read our threads on our disaster plans, from government action to me being hit by a bus.

I'm trying to keep it simple for Nefario by pointing out the people that kick down doors and carry guns. He still doesn't want to understand the seriousness of his actions.

It is not illegal for people to pool their money together. If 10 people got together and bought a cow its no business of the SEC the same as its no business if 10 people get together and buy a GPU and mine bitcoins with it. GLBSE is just a glorified spreadsheet tracking who owns what. It doesnt use USD or any countries official money.

Dude, this is Britain!

People knock politely.

No, we as a business are liable for taxes on profits we make, even if those are in bitcoins.

It's not knocking politely. It's more like being crushed by a steam roller in slow motion.

Pretty much everybody here that has told you that what you are doing is a terrible idea has been involved in this process in their past. Maybe it will become real to you when you realize it may be too late.

The JOBS act is not effective until January 1, 2013.

Yeah but thats just making official what already exists.

This statement will come back at you.

Did GLBSE ever verify the identity of Pirate40 ?

Your selling these securities and allowing an IPO, like SecondMarket.com, but they are regulated which in essence is verifying people.



The SEC will come down hard on you, 5m is not a small amount of money.

At the end of the day, they need to blame someone for this mess and if they can't find Pirate + they will likely try and shut you do down.

I like GLBSE, and it allows for some great Bitcoin projects to raise money and make awesome products for us.

Is there a backup plan? Has the corporate owner under the Ltd. been contacted yet?

-Charlie

http://www.youtube.com/watch?v=QPlMmwOq7U8&feature=related (http://www.youtube.com/watch?v=QPlMmwOq7U8&feature=related)

someone's making money on the intertubes, we can't have that ... send lawyers, guns and money!

Thank god GLBSE can always come back as an Open Transactions server and all these parasites will have to find real jobs.

Why would we verify pirate40? He never listed listed anything on GLBSE. How are we supposed to verify people who don't even use our platform?

If all else fails run it behind tor like silk road. Although that reduces the useability a lot.

How the hell are you concluding that?  By Nefario's own statements, it's FSA regulations he needs to worry about in the UK and the FSA is very much in the business of both preventing and prosecuting the use of financial services for money-laundering and other financial crimes.  They regulate financial services markets, exchanges and companies.  That GLBSE doesn't deal in cash is irrelevant to whether or not it is deficient in respect of AML/CTF legislation.  It's absolutely possible to launder money or finance terrorism without ever involving cash - you just keep trading things of value for different things of value.

Pretty much all FATF member countries require that financial service providers be AML/CTF compliant, and that means verifying the identity of their customers at the very minimum.  In the case of stock exchanges, it requires collecting large amounts of information about the stocks being offered and who is behind them.

GLBSE is a pretty crappy way to launder money. As anyone who uses it can tell you the liquidity is terrible.

And this is why it's a gray area.

I don't think any companies should be listed with government agencies.  Staying fluid is the best option.

Plenty of bitcoin companies are registered and they cant raise bitcoins by listing on any current stock exchanges and unless bitcoin is going to remain a niche internet currency at least some companies are going to have to interface with the greater economy.

Not every company is able to up and move, or keep its location hidden the way a bitcoin one can. And unless they stay out of the banking system completely this just isn't an option.

Look at GLBSE, we have to register otherwise the tax men will be coming after me.

So why was GLBSE brought up in this topic ?

Same reason BFL was, the guy mentioned us in passing when asking about pirate.

This SEC guy is sneaky

Maybe I should go down and meet him. Not sure if its a good idea.

What do you think ?

Why not, maybe he just likes bitcoins.

Ask him about http://empireavenue.com (http://empireavenue.com) while youre there  :)

I don't think he's "sneaky".  Trying to work out who's connected to what is pretty much standard for any investigation.  pirate pass-throughs were listed on GBLSE, so the role of both the PPT operators and GBLSE itself in pirate's operation is bound to come under scrutiny.  Even seemingly unconnected things could be connected, so no investigation is going to dismiss information about other apparent ponzis or enterprises in which the operators have "cut and run" out of hand just because they're not connected at first glance.  They're going to look for any common points and common people.

I think that anyone who looks like they can provide key information which may be vital to a future prosecution needs to realise that they may find themselves on the receiving end of a subpoena at some point, though, and that those who facilitated the flow of funds to pirate probably have the most to worry about in that regard.  

pirate's venture was being openly promoted here when it was thought that he was laundering funds for Silk Road or other illegal enterprises, so there are larger issues involved than him simply operating a possible ponzi.  To an investigator, this place must look like a haven not just for scammers, but also for those looking to attract funds for and from other illegal ventures.  Any investigation into pirate's activities is going to raise questions about other people and other ventures which promote themselves here - that's a given.

While you are there ... ask them why nobody was charged in MF Global robbery ... just in passing.

Take a Lawyer or 5, lol cause everyone in that building is lawyer/investigator lol 1 wrong word any you could you could be in a world of hurt

I have a close friend who works a investigator for the local sheriff, they will always ask some questions they know the answer to, they just want to see if you lying to cover something up at first. So yes being sneaky is part of every investigation, they will be friendly with you so you feel at ease. The whole thing behind this is the VAST majority of us are just trying to do business and be left alone. We do not commit crimes against anyone, or anything so the community as a whole should be alright. It saddens me to see them going after Glbse, its a great tool. I have said this before and I will say it again...... U.S. Gov is watching this site... every part.... BFL's mess was public here and guess what they read it.  There is a ton of interns working in this office, how do I know? I called the guy back last night to ask him to join the forum, but I called the dispatch. She said asked who I can connect you to, I said the guy with the intern, I can not remember his name. She chuckled at me and told me there was 100's of interns there lol. My guess is a couple of these interns job is to read this forum and pick out possible "scams". So if you read this say "Hi" don't be shy LMFAO.

 They would probably call you a co conspirator with glbse because you both use bitcoins  :D

Being that you have a real business that is successful, being proactive is a good suggestion.  I would bring an attorney if possible or at least have one on call that can be available and do a little coaching before you show up.

Of course, I would never go alone, but by bringing an identified lawyer may make them be 'hands off' with giving me information and possibly make me look suspicious.

I'd likely bring our in-house counsel and identify him as my advisor.

We have some friends in the SEC and gonna pull some strings to see who this guy's boss is and come from on top of him.

I just dont want the SEC spinning this into an anti-Bitcoin suit.

-Charlie 

That would be fantastic please keep us updated on what happens, if you go.

Thank you! It's important that we all help draw the line between Bitcoin and a few rogue greedy people abusing it.

Fraud is bad, and action against it much appreciated. Attacking Bitcoin and its infrastructure, however, is unacceptable and outright absurd. Nobody should want that. I'd like it if that feeling of wrong and absurd gets conveyed when this topic comes up, and that they understand Bitcoin is not as easily replaceable as centrally created currencies.

Because of all the pirate pass-through bonds that were listed on GLBSE, one presumes.

Gotta investigate, to determine if GLBSE was a "front" or "enabler" for Pirate's BS&T.

Charlie / Yankee, I don't see what you gain by talking to investigators.

This vid is more about police and criminal cases, but it is still very much worth watching and the lessons are still applicable.

https://www.youtube.com/watch?v=6wXkI4t7nuc - "Don't talk to the police"

Draw from it what you will, but give it a look over before you decide whether to talk to the SEC.

Hardly.  BFL was mentioned because the OP is an ass who wants to make trouble.

GLBSE is a reasonable target for a Ponzi investigation, as it was a vehicle for making investment in Pirate very easy (via PPT's).

Mind you I'm not claiming GLBSE is guilty of anything...  just noting that reasonable people can understand why GLBSE is receiving attention from Ponzi investigators.

^This is the kind of post I hate.

The reasons:

- it starts off with "So" (the beginning of any stupid story)
- it says NOW in bold to carry the readers away from the interesting part to a personal issue of no interest to anybody, and no given specifics
- it mentions the author about to hop in the shower
- it makes a preposterous claim with no information to back it up like he was the state attorney himself ("pirate's going to prison")
- it says "he asked tons of questions", leaving you with tons of questions
- essentially the author just gets the reader hyped then says "but I gotta run now (meeting my fiance at the theater or something)" taking his time to come up with more bullshit he can tell you later this evening

So let me rewrite the original article:

"Hi guys! I just dared calling the evil fed and now I'm so excited I gotta tell you to make myself look important, too! And look! I have a girlfriend as you can clearly see in my avatar picture!"

Damn sorry I hurt your feelings lol

Nothing was mentioned in passing he asked questions I answered I know of 3 people that talked to him and had the same type of convo. He knew well before he talked to me what he wanted to know. Like I said he has been reading the forums and all the info. Call him yourself, ask get off my nuts.
Ill build you a bridge Gweedo so you can get over it and live under it.


Did you not just say you were going to turn me in?

I fall under hobby tax right now so good luck with that...... make bitcoin a bigger target while your at it

who snitchin now lol

EDIT:I'm rolling now your going to turn me into the I.R.S for taxes I have not yet had a chance to pay on? Dude I pay taxes in April don't know about you.

Ok gweedo  8)

Awesome video! Back at ya
https://www.youtube.com/watch?v=eDJrQBwJpqk

No feelings hurt you're just annoying lol

I can take that, better then following all my posts and trolling me out, like gweedo.

That is a great idea but you might want to talk to your lawyer to be safe.  It would be nice to hear your feedback but not at the cost of exposing your operation.

Stop mixing your metaphors!  It's unseemly.

http://www.youtube.com/watch?v=6wXkI4t7nuc (http://www.youtube.com/watch?v=6wXkI4t7nuc)

and this: http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/1594035229

Fuck, I hope GLBSE can handle this one if shit hits the fan.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.

Nice..... :)

Now that's sig-worthy.

Its going to get ugly.

We've always known that sooner or later Bitcoin ventures would come under the scrutiny of US regulators.  If service operators didn't prepare for that inevitability, then they are fools.

I'm not familiar with UK compliance laws, but GLBSE is in clear violation of US laws.  I'm surprised how many of you are involved.  Don't worry, the SEC is here to protect unaccredited investors like yourselves.  They will do so by making your investments worthless.

posting in a legendary thread.

That being said,

if they make any sort of move against bitcoin they will cause a streisand effect.

I have talked with Nefario told him about what we discussed, and also expressed my concern with this. We face a problem, if the GLBSE goes legit, the U.K. will require people to disclose their identity. " I'm  not positive about this but it makes sense". Now the U.S.A says GLBSE is illegal, GLBSE requires identity,U.S. asks the U.K. to cooperate and now we are charged with securities fraud. We could not list or register under real names, which would make it impossible to have a validated I.D. thus making U.S. Businesses not able to post on the GLBSE.

I just saw a Lecture where a guy was talking about the Jewish Diamond dealers and Cowboys selling cattle in the west today.  These businesses operate on trust and reputation alone.  If you go to the government to try to solve a dispute you are ostracized by the group.
I'm not sure of the details on the start of this thread but bringing in the Feds as it were might be a cure that is far worse than the disease.

 

As does the Mafia and the Triads.

I'm not sure how operating like criminal organizations helps Bitcoin.

I'm not sure about the 'crying to mommy and daddy' business in seeking justice through official channels.  What other ways are there?  Giving someone a 'scammer' tag on a forum?  Scary.  Not trading with them any more?  They'll open a new account and scam away.

The alternative is vigilante justice and settling scores like less savoury sections of society. 

Can you post a link to the lecture?  I would like to watch.

Pretty much.

Interesting.

Also, why would government have jurisdiction over Bitcoin, and not Bitcoin over government?

After all, this is the early stages of a more advanced system over the old one.

<tongueincheek>

We should be taxing them.

</tongueincheek>

After all, they're running governments on our soil.

The boundaries are no longer so clear anymore since the governments have gotten increasingly criminalised with rorts like the MF Global robbery, the trillion dollar bankster bailouts, fraud-closure, SEC watching porn while Lehman bros crashed and untold fraud went by .... choose your "enforcers" carefully?

Because the government has become one giant corrupt organization, and they don't like it when others step in their ballpark and try to play their games.

According to an article about zeekrewards, what i got from it was that they wanted to save investors from "dramatic losses", so they closed shop and instead delivered to the investors "semi-dramatic losses". There was 0 recovery for investors as big badass uncle sam kept it all.

There is currently ~$225 million of Zeek funds in domestic and foreign financial institutions.  The emergency order has frozen those assets so that the receiver can recover them and distribute them to investors.  The sheer number of customers and the huge number of affiliates means this is going to be complicated, but it's likely that the receiver will seek to claw back payments and go after the millions which were transferred to family members as well.

How much of those ~$225million will be left after the "authorities" take their cut?
I suppose as much as what will be left of Bitcoinica's funds after the liquidator takes his cut... ::)

"The authorities" have already taken their cut.  He was fined $4 million.  There are over 1 million investors in Zeek and over 200,000 affiliates.  The amount of work it's going to take to begin unravelling it is astronomical.  Someone has to be paid to do that work and people would whine like babies if it's was team of government employees using tax-payer money in order to facilitate Mr Average America getting a refund of $5.

I'm pretty familiar with the NZ liquidation process.  If what we've been told is essentially true - that the MtGox intrusion caused a shortfall of about 30% in the amount of outstanding claims valued at the date Bitcoinica stopped operating but that a significant portion of the funds lost in the MtGox intrusion have been recovered - then the two key issues for liquidation will be adequacy of records and any preferential payments which were wrongly made. 

Preferential payments shouldn't be an issue if the value of Bitcoins has risen sufficiently to cover the outstanding claims (which were based on Bitcoin being valued at around ~USD 5).  Even if they become an issue, subordinating the claims of creditors who have received preferential payments is an option which the liquidator can use as an alternative to claw back and I've read case after case where NZ liquidators have chosen that option (sometimes in conjunction with demanding the return of an agreed portion of funds).

The biggest problem with the Bitcoinica liquidation is going to be the adequacy of records.  Tihan has indicated that Wendon intends to waive its right to be regarded as a secured creditor.  Under NZ law, Wendon would still be entitled to be treated as a preferential creditor due to its role in recovering the funds from the MtGox intrusion, but Tihan has given no indication that it intends to pursue such status or even that it intends to lodge a claim as an unsecured creditor (secured and preferential creditors can choose to waive that status and be treated as unsecured creditors). 

There are some wild cards regarding Bitcoinica and the adequacy of records is one of them.  It could make the process of validating claims time-consuming and costly.  But liquidators don't formally validate claims until they are ready to distribute funds, so there'll be a reasonable indication of the likely pay out by that point.  The existence of a currently unknown major creditor could also drastically reduce the return to users, but no-one has even hinted at the existence of such a creditor despite some pretty public slanging matches.

Bitcoinica users have far more reason to be optimistic about receiving some eventual pay out than Zeek Rewards "investors" do at this point.

Because the criminal organizations know something most honest people don't know.
You will fuck up a perfectly good thing or make a bad thing worse when you get the GOV involved.

The police can't be counted on to help you any more than the army can be sent on a peacekeeping mission.

Armies are trained to blow shit up.
Police are trained to arrest.

oh the irony

I missed this whole Zeek thing, just read up on it...tons of comments from irate Zeekers who refer to their involvement as a "business"  for example "but out SEC and give me back my business" or "I guess Zeek rewards is over, I just need to move on and build my business."

How in the fuck do people think that clicking on some internet bullshit is a "business" ?  Jesus, a lot of Americans are in for one rude ass awakening.

"Build my business" is pyramid/ponzi speak for "Spam like a mofo until my downline referral tree is over 9000".

What irony would that be? The one where he knows more languages than you do, makes a mistake while typing in a not-native language, which he has to use to talk to people like you who know only one language, after which you can step forward to correct him?  ::)

Of course, explaining humor kills it, but ... The_Duke, wachtwoord's complaint (of the OP's lack of "correct English") itself lacks "correct English". That is the irony.

In this case, explaining the humor doesn't kill it, it just makes you look silly.
At the risk of killing it by explaining the humor: I totally got what grue link was saying. I noticed the typo in wachtwoord's post. I understood the irony. And after doing all that, I ridiculed grue link for being a douche and a spelling nazi by attacking people over small typo's in a language that is clearly not their native language.

Did I kill it good?  ::)

Not to me: you asked a question and he answered it.

prolific prosecutor "pads" personal pay plus peculiar pilfering passion


http://www.legalaffairs.org/issues/May-June-2005/scene_snider_mayjun05.msp



Watch your stationary!

Theres a few things I would like glbse to do.


Get a  domain name without ICE jurisdiction to take down.
Move the servers to a country with less stringent securities law.
Register as an offshore company somewhere like Belize.
Retain an anonymous operator similar to silk road.


This would greatly reduce the chance the site will disappear overnight but Nefario might need to build a brand new site to create a regulated bitcoin stock exchange. Dont think you can with the existing site without delisting all securities.

I agree bitcoin.me he needs the exchange needs to be moved from where it is at, unless it wants to comply with all the laws. sweeden would be a great place. I think someone needs to write a S.O.P "standard operating procedure" for things that went down with goat and so forth.

All of this would also increase the chance of the site operator running off with all funds.

Don't worry, he's super long and all invested in Bitcoin and stuff!

scnr,

Ente

+1.  Sounds like a good idea.


(provided that it has not just happened right now) not much compared to now. And stealing is a crime even in tax havens.

But Nefario's behaviour is incredibly shady, and the conclusion of that new message just looks like he's trying to shift the blame for not paying (as he is already in control of most coins, it appears).

Maybe we could call the Nice Guy from the SEC, and ask him just what's really going on? At this point, I fear we can count more on him being on our side, or at least fair and honest with us, than on Nefario... at least he could confirm there is actually something going on, and this is not just Nefario's paranoia, or idea of a good excuse to disappear with the cash.

Worth giving a try but I doubt the SEC will be doing much good.

closed investigation he told me that from the start, he won't tell you anything.

-1

I just found this thread and started a reading. This is my ever -1.

Full Disclosure: I have no idea what a -1 does, but believe I used it correctly.

~Bruno~

I was thinking about something like that along the same lines. Thanks for phrasing it better than I would have.

~Bruno~

Thanks for bumping Nef's post, I missed it before. Of course its nonsense to think that GLBSE would fall under the crowdsourcing act. Just a quick glance:
http://thomas.loc.gov/cgi-bin/query/D?c112:4:./temp/~c112y9xMho::

Shows GLBSE complies with almost none of the requirements.
It is however at first glance  potentially viable to make something like GLBSE that is lawful under this act.

who would trust nefario now if he would open a new business?

The same people who still believe pirate is going to pay, are still using Intersango and keep falling for obvious scams.

Very possible, though I'd assume that plan recently and suddenly changed. Not so long ago, Nef was pushing a tiered system onto lenders.

"I don't want people using GLBSE as their personal piggy bank for personal loans so outside the pinkslip market I want to limit bond issuers for lending (i.e. borrow to lend to someone else) to a number of players who adhere to some principles and reach some standards.

I want to have a block of solid bond issuers who then get that money dispersed to the bitconomy in the most efficient way.

Standards I have in mind are additional verification(get a background /credit check), who have GAAP accounting, reporting, and who agree to publish data of people who default on their loans to a central credit website."

Independent audits would satisfy the requirements for most smaller operations. Outside that, Nef would need to ensure he complies with Accredited Investor & AML laws, which'd be a pain in the ass. "Rebooting" may've been the ideal solution, but I think this's been handled so poorly, it's pretty much out of the question. The far-reaching other requirements, I think, imply he may not have had regulatory risk in mind when he wrote that.

What is wrong with Intersango? I used it several times without any problems.
Only thing I know about is some banks in some countrys won't process payments to and from them for whatever strange reason.

What is wrong with Intersango? I used it several times without any problems.
Only thing I know about is some banks in some countrys won't process payments to and from them for whatever strange reason.
[/quote]

Intersago announced that it will be stopping BTC/USD trading on 10/14/2012.

Ah, so no problem for me, I'm from the Netherlands and use euro's.

Search the forum for Bitcoinica. The three guys who are running Intersango are now involved in a lawsuit because they fucked up on all fronts with Bitcoinica. They were also involved in the organisation of the latest Bitcoin conference (like Nefario from GLBSE, who had not turned to the dark side at that point), which is why lots of people did not go. I wouldn't touch any of their businesses with a ten-foot pole.

Isn't Nefario an Intersango employee even?

Well this pretty much says it all.

Seriously?!? You don't know how hard I just laughed :-)

What would be a reason to be fired for incompetence from Intersango? To mention or to even think about solving a problem?

But they kissed and made up, then all four of them orchestrated the London conference.

I just thought of something after penning the above. We all know Josh with BFL attented, but does anybody know if Nasser G. was there?

~Bruno~

I think they should bring back miserydearia to complete the awesomeness.

They might as well add Atlas to the team to head the unremorsefullness department.

Maybe this is why nothing seems to be happening on the SEC front:

http://www.techdirt.com/articles/20121113/16501921036/sec-porn-surfing-down-waste-up-stunning-disregard-basic-computer-security.shtml

The Bitcoin Securities investigation is being handled by the Division of Enforcement.

This article and the activities it mentions occurred within the Trading and Markets division (as is says in the first line as if you bothered to read it).