Bitcoin Forum

https://vircurex.com/Reports/2013-05.pdf

Is this some kind of bad joke in the quarterly repprt, Kumala.
""...unfortionately the service provider has then done and posted the credential in there helpdesk ticker, rather than the standard process of sending it to our email adress (witch has 2FA protection), also the security setup of allowing only our IP range to login to the management console was not working. It was an additional security feature the provider offered....."

Then later it's stated
"Consequensces  The loss of funds will be recovered out of the monthly dividends. Dividends will be used to purchase back the missing funds in the coming months. Depending on the trading volume development this is expected to take 9 to 12 months."

Then if one takes a look at the Vircurex contract at Cryptostocks
https://cryptostocks.com/securities/34#info
"Special conditions The security issuer will not be entitled to dividends for a period of 12 months after the listing. "

So from a fault from the hosting provider has done you decide to not demand compensation from the provider ?

Instead you decide it should come out of the dividend from your new investors, that bought 30% of Vircurex stocks at Cryptostocks those that own that 30% should acourding to you for the next 9 months pay for it in the form of no dividend, the same period for witch the majority owner 70% is not entitled to dividend...

Why don't you split the responsibillity according to the ownership , 30% the new shareholders will pay for and 70% the majority owner in case you can't get the funds back some other way and persua a process to get the lost funds back from the hosting company for there mistake and try to trace where the money has been stolen to and who's behind it.

Or at the very least take funds from the building of NAV value and still pay out 70% of the net profit to the shareholders first.

However you look at it,  this moths result if you include the stolen funds as a loss in the result(if you can't get it back) that dosen't mean next moths result will be a loss and therefore if that month is generating profit(witch it should do unless the breach of security will become a monthly event) shareholders should still have there dividend from next month and onwards.

^^^ that does seem pretty reasonable to me.

So, according to them (with no proof whatsoever) a provider they pay for fucked up and just gave away the root password to some random dude, they stole ~$175k worth of your investors bitcoins, and you just say, 'fuck the investors', more or less.

Wow.  For all anyone knows this guy just straight up STOLE $175k.

Don't think it was $175k of investors' (i.e. shareholders) funds that were stolen.  It was $175k of depositors'/users' (people who use the exchange) funds that were stolen.  That means he's now running with less cash than is in the accounts of the site's users.

Which risks a spiral of death - where some people withdraw (as they don't want to be the ones left with balances when cash run out) which then rapidly hits the point of withdrawals being blocked.  At which point revenue drops and confidence vanishes - meaning no chance to ever make the funds back.

Or he just stole the coins himself.  I'd assume that if he doesn't produce any evidence of it tbh.

EDIT: On reading the report more careful it appears the majority of stolen funds were (at least purportedly) covered by held assets - so they're only short by 100 BTC or so funds necessary to cover all deposits.

The recovery from investors IS theft however.

"Operation costs / Revenue / Profit The security listings proceedings will cover all operational expenses for the period of 3 years, hence all revenues will be net profit and paid out as dividends during that period."

Profit is defined as revenue in the contract. Charitably it could be considered that this month's revenue (or at least that part before the 'theft') was stolen and so cannot be paid out.  But there's absolutely no basis on which to withhold any dividends in future months (other than the 30% which investors for whatever stupid reason decided to give back in the recent vote).

The contract explicitly says "all revenues will be net profit" - there's nothing at all unclear about that.  But I wouldn't hold out much hope of him actually following his contract given he changed it mid IPO to avoid having to refund all share sales.

Hmmm, more like 210k USD if you count the 20k LTC.

That hurts.  :(

Edit: it was late.  it's actually quite a bit higher than that.  ;)

At today's prices the total losses amount to ~$293,000.00.

Wow just wow.

will this be the standard 93 page thread were people talk about how unhappy they are, possibly register a domain about the person who stole the money and end up doing squat ?

Can a mod just turn page 2 into 93 to speed up the process ?

=)

When one looks a bit closer at the numbers in the may 2013 report some numbers seems a bit strange, under financials for example:

                                         Feb              Mars                April                     May
Number of shares:                   -             28700              28700                 28700
[Free Float Shares                    -              8612                8612                   8612
Revenue:                               -             125.63             252.44                130.65
Paid Dividend:                         -             125.63             252.44                        0
Cost of operations:                 -                520 $            1541 $              730,30 $
Book Value:                    2149.77 BTC     1937,99 BTC      1485,70 BTC             -102.33 BTC
NAV:                                  0,749 BTC      0.0675 BTC         0.0518BTC             -0.0036 BTC


Book value from Feb 2013 is clearly the exact value of (8612*0,25BTC)*0,9985(0,15% fee at cryptostocks)= 2149.7705BTC
Was all 8612 stocks sold before the end of Feb 2013 ?
Why no shares listed in Feb numbers ?

Acording to the contract,
"Currency Exchange Risks All expenses are paid in USD, thus to limit the possible risk of currency fluctuations, all proceedings from the listing will be converted to USD immediately. The funds will be held in a bank account and will not be used for anything other than paying the operational costs of the platform."
 the BTC brought in from the IPO was going to be deposited at a bank account to garante to cover the cost of operations(in case BTC price would go down during the 3 year period i guess), when was this done(28 Feb ?) and what conversion price $/BTC was there when the funds were converted to $ and in the book value for Mars-May what BTC/$ price is used for calculating the Book Value for the funds in the bank account and whats the amount on the bank account for each of those month.
Basically when you mix BTC and $ in your financial repport you have to have the actual amount in $ in the bank account and/or what BTC/$ rate you used for the calculations for it to be clear.

Also NAV value for Feb 2013, no stocks still it seems to be calculated at 2870 stock, a calculation error and a typo at number of shares or Feb 2013 ?

If BTC was converted to USD at the 28 Feb 2013 at the avg price that day 32,69$, then how on earth can the book values for Mars(31/3 92,7$/BTC) April(30/4 139,84$/BTC) and maj(31/5 128,15$/BTC) be correct then ?

It looks to me that the book values for mars should be more like 752,49 BTC for Mars, 487,81BTC for April and 526,61BTC for May

Mars
2149.77*32,69=70275,98   70275,98-520=69755,98   69755,98/92,7=752,49BTC
April
69755,98-1541=68214,98  68214,98/139,84=487,81BTC
May
68214,98-730,30=67484,68  67484,68/128,15=526,61BTC

if the funds was converted to USD directly as stated in the contract.
and the may value of 526,61BTC is ofc without the loss of 1454BTC
So if you include the btc that you are missing from the loss it's more like -927,39 BTC !!! (that should be reported in the book value for may) with only the $(in bank account) and BTC(loss in security breach) part taken into account, it should be even worse if you add the fact that you stated about 23 400 LTC and 225 263 TRC was lost to that is mentioned in the report to.

Should we interpret this fact as that the funds from the IPO was never converted to USD as said in the contract or as that Vircurex is lying in there May 2013 report about how bad the situation is ?

So Vircurex/Kumala, would you care to tell us if Vircurex in reallity is missing way more than the 102,33 btc(that is stated in the book value) and rather the equivalent of way over 1000 btc instead ?

I think your table just blue itself.

http://25.media.tumblr.com/tumblr_m724aul9R61rb02kao1_500.png

There is some bug in your voting system at cyrptostocks Kumala, JDBIF has a vote that closed on 31 may and the result is not shown yet.

Now the 2 votings in Vircurex is closed to but there is no result from that vote either when will you fix the bugs in the voting system on your cryptostock site ?

What do they mean by "Book Value" and how is it calculated?

Yes, it was. And at the same time somebody said a few things about how nonsensical that all was.

Those who heeded said somebody's warning are okay. Those who thought themselves smarter have been duly fined.

In the february value they have calculated "Book Value" as (8612*0,25BTC(introduction price of the stocks))*0,9985(0,15% fee at cryptostocks)= 2149.7705BTC. so it looks like it's only the assets (the BTC they got in from listing the company that should have been converted to fiat immediately acourding to the contract) on the bank account that is included in it. Surely they have to include the value of the coins they are missing in the value from may and onwards to.
If the site woulden't have lost those coins, what they would build up in reserves from the 30% they would not pay out in dividend ("to raise NAV value") would be included there i guess.
There's really no explanation from Vircurex to how they calculate the "book value" or the NAV so people can only guess there.

What happened to the monthly report they said before that they would publish on there Vircurex site, i could not find any on there site for Mars and April, diden't they publish any for those months or did they remove them ?
Now they changed it to quarterly ones instead, so i guess it means no info to the shareholders for 3 months, there gonna keep them in the dark on how it goes, that's real bad of Vircurex.

By definition of book value, if Vircurex was shut down at the end of May, and everything got liquidated, shareholders will be left with -102.33 BTC.
Is it possible, they have no idea how book value is actually calculated and have pulled some arbitrary numbers out of their arse?
Not surprised because this looks like a common practice in the funny land of btc finances. One delusional dipshit likes to call it "the standard", btw. :)

It seems strange that Bitcoin service operators are STILL using VPS.  We have been running bare metal, with a "known good copy" of OS installed remotely using IPMI remote media capabilities.  Nobody at our hosting provider either knows any login credentials or has the ability to reset them.  Whole disk encryption ensures that even physical theft of disk would not lead to data loss.   The funny thing is that even with that I was too paranoid to use a hot wallet for refunds so they required manual processing.

Sounds like you know what you are doing, unlike so many in the bitcoin world.

Yes, also it is strange that people use hot wallets on servers - using BIP32 addresses it is easy to run a hot wallet at home on a mobile internet line for example. Good luck in finding that IP even. Also you could just run TOR at home too to hide your hot wallet IP even further.

Anyways - it's sad to see that people prototype stuff quickly, gain traction and then suddenly realize not by their own but by getting hacked that they screwed up. Then, because others put their trust in them, they just can walk away unharmed and disappear. People who warn about that do either so in a way that is usually insultive or at least perceived as a "typical naysayer" that just weakens the entrepreneurial spirit... This is still the internet and you have to expect that there are hundreds or thousands of people out there that are smarter and better than you in any and every aspect - tread carefully!

Don't confuse what you do with your scammy ART asset and what this guy does, on one side (ie, childish delusions of "finance") and what MPEx does (ie, the actual standards of Bitcoin finance).

The distinction is important for you because internalizing it represents your only chance of becoming less stupid than you currently are. Irrespective of how small this chance is or may appear to you, it's absolutely all you've got.


"People" need to fix their perceptions misconceptions.


There really is no other way.

FastCash4Bitcoins was a badass service.  Hopefully it will come back.

What does FastCash4Bitcoins have to do with Vircurex?

Kumala

why is the host provider not sharing the cost of this loss for there errors?

also I don't think Kumala did this to self, as the dvidends would be worth more over a few year to him, and the selling of his stock vs loss of rep and thus exchange value.


I can not believe the all round incompetence though, as I said in the other thread, why don't you use a special code that only you know and you r provider will not give out ay info without it.

ID is not enough

Because their is not spelled that way; because it's not part of their business model; because you sign disclaimers when you get cheapo shared accounts; because linode didn't when it fucked over slush. Take your pick.

fdddk illogical spelling I use contextual phonetic spelling always have (this is why korean is = best lang)

no I am seeking the logical reason, not any legal reason even if what you say is true, which, is really superficial.

Dividend has not been paid on time this month either, so 2 months in a row now that you haven't paid dividend on time.

From Vircurex contract with it's shareholders at Cryptostocks:
"Operation costs / Revenue / Profit The security listings proceedings will cover all operational expenses for the period of 3 years, hence all revenues will be net profit and paid out as dividends during that period.

Dividend The monthly net profit will be paid out as dividend, typically in the first week of the month. All issued shares are entitled to the dividend payment.......

..Special conditions The security issuer(Kumala 20 088 Stocks, 70% of the issued total of 28 700) will not be entitled to dividends for a period of 12 months after the listing. "


Vircurex has not published there monthly repport for June either that they should do at Vircurex site.

How are you running your company's(Vircurex and Cryptostocks) Kumala, why are you constantly breaking the contract with the shareholders you made at Cryptostocks and why don't you publish monthly repports that you informed the potential investors at Vircurex site that you would produce ?

goodbye vircurex.. this sucks.. seems like mtgox with all their problems is one of the only ones who can lead. the level of incompetence is high.

just wanted to point out that until today, there was still no dividends paid out and there is no information on how long it will go on like this...

until another "hack"? :)

The entire securities forum should be moved to gambling. Because thats essentially what it is.

Just hold your bitcoins and spend them on stuff you need to save pulling your hair out.

Can we sticky this and force people to read it before opening any other Security thread?  So true.

first time I read this thread. had I known all this, damn vircurex, and damn me too

well, now we know for sure that we will never get any dividends anymore

and yet, "interest" on deposits is still being paid out...

I said a while ago that I thought that was a totally asinine idea while us shareholders were still getting shafted, and I still do now, more so than ever.

If the shareholders can't be paid dividends, then depositors have no business being paid interest. ALL of that coin should be going directly towards making up the shortfall from the thefts, like we were railroaded into agreeing with.

If Vircurex has enough extra coin lying around to be able to pay interest twice a day, it has enough coin around to be distributing dividends to their partners that actually own a piece of the damned thing.

=squeak=

They don't have enough coin. The interest was giving depositors a reason to keep their money there instead of withdrawing and having a run on the bank that could cripple them. Looks like that plan worked to perfection.

It occurs to me that interest on balance is also a huge disincentive to trade, and trades are where they make the income, so....

one thing is for sure: current shareholders value is ZERO! vircurex should raise new fresh capital and the dilution would almost wipe out any existing stock value. then they should proceed in refunding the current depositors with frozen coins. this is the only way to keep the exchange afloat, one of the oldest in the crypto arena.

Where are they going to find somebody willing to invest money into a failing exchange that has repeatedly been the victim of hacks (or was it just the operator taking some of the money to play with)? The risks here are huge, and he would have to offer a huge interest rate to attract any investment.

yeah that's the problem. :(
but someone crazy can come up and takeover the business. there's so much to do in the cryptoworld and this might pay back in a year or so. don't know maybe a group of devs that can take the platform and improve it over time, restoring confidence after reimbursing every depositor.

well, if you run "Ruby on Rails" in such critical services, its normal that you get hacked.

have a see

I do want to know how it work