The following is the wording currently added to the icbit wiki to warn people about practices at that site. Fireball has removed various warnings several dozen times. Any suggestion on wording that might be less offensive to him, while still being accurate, would be appreciated. 

https://en.bitcoin.it/wiki/ICBIT

− Warning.

There are several reports of dishonest practices at icbit.

The website owner has refused to respond to accusations publicly.−

-These accusations include that contract prices do not trade purely based on bitcoin price movements and speculative pressures, but largely on manipulations and that website management cooperates with, and encourages, these manipulations. This allows larger traders, including the site owner, to effectively strip funds from smaller traders.

There are other ethical issues at icbit as well.

−The owner of icbit has so far refused to answer complaints publicly, he has refused suggestions on how to clean up his site and he has refused to refund money to those who point out unethical practices.

−Please do not invest any money at icbit until you understand the issues raised in the complaints and/or the alleged dishonest practices have been changed. If you are not sure please ask questions in a public forum like bitcointalk.org and do not give any money until all questions are answered to your satisfaction.−

I think you're confusing icbit with another site.

icbit is a scam site trying to con people who are not familiar with futures trading. I'm just trying to reduce the number of people they scam until they either clean up or go out of business.

Two and a half months and Fireball has refused to address a single one of the issues himself.

Some observations were made by me and a few others to the effect that icbit seemed to be engaging in some dishonest practices. I made a point to Fireball that I would make this issue public until he refunded at least some of the money he scammed from me, as he has done with some others.

On the last revision he made to https://en.bitcoin.it/wiki/ICBIT he says "FleaSpirit - you were told on the forum by many traders that you mistake. Stop spamming. You won't get refund for money lost due to your own actions."

So I ask on this post for anyone familiar with icbit to publicly and clearly either state that they believe it is an honest site run ethically, or that they think it operates in a dishonest way.

Some of the issues I raised in the first complaint were
1) Clearing is done in a way that is patently dishonest. Many people have pointed this out.
2) The owners of the site use their knowledge of client accounts to make trades against those clients.
3) A small group on the site tries to use various types of trickery, including the funny but improper use of real trading terminology like contango and backwardation. If you search this forum for the word contango you will find a bunch of the scammers who try to cover for icbit.

I'd be grateful for anyone who would simply respond to this post stating that they fairly believe icbit to be an honest outfit or a dishonest one.

As I've said before, I think icbit could become an honest site. It is possible that Fireball is just a teenager who doesn't understand the rules necessary for a financial site. I don't know. As things are now I want my money back before he disappears.

Most of the people Fireball has conned have no idea that they have even been scammed. He preys on people who have no knowledge of financial terms or common practices.  All I'm doing is giving a little information that most people who have never traded derivatives might not know.

From volume charts it is clear his business has been steadily declining. People arrive at the site, lose money and leave, or if they are a bit crooked themselves they play along with the price manipulations and try to profit from the people who do not know what is going on.

As for the money, of course I will probably not get any of it back. He will close the site eventually and create a new user name and start a new business. But at least one other person did apparently expose his practices, then drop the matter in exchange for Fireball refunding some of the funds he scammed.

The real problem with exposing Fireball is that most people do not understand his scam and it is very difficult to explain. So blackmail, extortion, more nonsense words he throws out to try to trick people his way.

Fireball has made a blackmail accusation because I have said I will continue maintaining the edit on the Bitcoin Wiki until I get some of my money back. https://en.bitcoin.it/wiki/ICBIT

Some of the initial accusations are on the post here https://bitcointalk.org/index.php?topic=246845 Fireball has refused to address them so far. There are other accusations against icbit elsewhere. As Fireball does not respond to my other posts, I will give him another opportunity here.

The following is my discussion response on the Wiki. Please feel free to respond Fireball.

 Fireball, wanting money back that was taken through dishonest practices is not blackmail.

If you are comfortable with the practices you engage in on your website, why don't you address some of the accusations that have been made against you and your site?

1) Prices are blatantly manipulated through last clearing. The site encourages this, apparently because one or more site owners profit from it. A person expects prices to derive from movements in bitcoin, not overt manipulations. I have provided screenshots on the linked post below.

2) People running the site use their access to client financial information to conduct trades running positions against those clients.

For other observations refer to https://bitcointalk.org/index.php?topic=246845 which you have so far refused to even respond to.

If you want to defend your practices either here or on the forum Fireball, please do so.

No serious trader will stay on your site when they see the kinds of things you do. You are not running an honest financial exchange, you are running a scam built on keeping your clients in the dark about how you operate.

I have made and lost a lot of money on financial exchanges in the last 30+ years and I have never in my life made any sort of complaint against any exchange until yours.

Still no answer from Fireball.

Never heard of 796 until your post. After a few minutes looking at the website and so on I'm a little wary. Their marketing seems a little aggressive. I'll spend some more time researching them over the next few days.

Bitfinex has worked well for me so far. Every issue I've raised with them has been resolved quickly. There is a girl on this site MPOE something who says they are doing some kind of scam but I've seen no bad yet there. They offer 2.5 to 1 margin but you can extend that considerably. If you want an explanation of that let me know.

There are several sites that offer strange pseudo options. They promote heavily through affiliate programs and are some of the most obviously crooked operations on this planet. Far worse than icbit.

My best suggestion for the moment is bitfinex.

I made some posts detailing some negative experiences at icbit. In response you, "Fireball", sent me an email in which you said we could discuss the issue but you said you would block me if I was not respectful enough. You did not respond so I assume you blocked me. Thus I will address you publicly.

My complaints about icbit are detailed at https://bitcointalk.org/index.php?topic=246845

I think most people would agree that icbit is not in the business of marketing genuine futures contracts. Rather they offer a platform to draw in people who are interested in trading derivatives, then those people are relieved of their money through a series of moves that the long term traders at icbit are familiar with and are willing to profit from. Specifically those practices include deliberate manipulation of contract prices in collusion with "Fireball" et al.

There are enough screenshots and other details on the first post, I think, to show that icbit is not an honest exchange and should be avoided by sincere traders.

Again, I lost about 20 btc at icbit. I asked for half of that to be returned to me.  Now I ask only for 25% of it. When 25% of what was lost is returned I will drop the matter. Til then I will make sure that anyone who looks at the wiki is at least made aware that there have been a number of people who have questioned the ethics of "Fireball" and the practices at icbit.

25% of what icbit got from me is about 5 btc
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The edits and deletions you make to the icbit wiki at https://en.bitcoin.it/wiki/ICBIT are dishonest. Until this matter is resolved I will continue editing to show that there are people who have serious concerns about your business. You are free to change the wording of the warning, and if it is truthful I will not change it. But as long as you continue removing the warning I will put it back up.

If you want to make an honest business you have a concept that could work, but if you continue cheating people and allowing sleazy practices you will not succeed.

-Response from fireball?

Here is the annoying part.

If icbit were legit it would be beyond successful. I had just got a few friends into bitcoin and told them to open accounts at icbit and another exchange when I had to tell them to steer clear of icbit. Just these people I almost brought would have added a lot of depth. So they make a few bucks being crooked. If they just ran things straight they would make a fortune. It makes no sense.

Your exchange seems to be run right, at least not a scam, but 30 btc to get in leaves most people, including me, out.

Bitfinex has been first rate so far. Obviously not high on your list but I have seen no major problems there.

Here is one issue with volatility and pricing specifically as it applies to the type of contracts on icbit. The contracts are calculate by 1/price1 - 1/price2. If you enjoy math too much you can make a curve with the likelihood of a specific price being reached in the life of a contract on one axis and the profitability of a contract bought at one specific price on the other. x percent chance of the price touching a certain price, y percent profit on a contract at that price etc.

When contracts were priced $70 above spot that calculation was vaguely within an acceptable range. Both buyer and seller could be said to be in a position that made sense. A few weeks after that, the price of contracts went below spot even for contracts traded out to December. In other words someone was betting very heavily that between now and December the price of spot would not rise above the 80s.

It makes no sense unless you look at the trades and notice the unnatural patterns. I've covered this in other posts. Briefly again look at http://www.nonprof.com/bitcoinistan.com/unlikely.jpg Right before the previous clearing someone extracted 325 contracts at the ridiculous price of 104. Then clearing was pushed up to 110. Then an hour 40 before the next clearing someone pushed clearing down to 107 and put a hundred contracts on the block to prevent it being pushed up. Selling December contracts at 107 is beyond suspicious. 104 more so. In the 90s even more so. In the 80s its silly. Again, a person would not sell at those prices based on any market info. Those trades are completely apart from any bitcoin price considerations. Do you deny that? It is funny.

When you say "the primary reason for it to trade IN LINE with spot is arbitrage" you are giving up any credibility you have. You are just making stuff up.

Same when you say "I told you when leverage makes volatility a factor and when it doesn't - it all has to do with the option of the contract holder to default". Uhm "leverage makes volatility a factor"? Volatility, the degree to which the underlying equity is volatile, has to be accounted for in anything that is leveraged.

I'll add one point on a less hostile note.

The first time I noticed irregular activities on the site I decided to withdraw what I had and leave but I read through the comments and saw what seemed to be comments of some integrity by staff. Someone said something about using referrals and a staff person, icthy I think said "that's spammy" which struck me as a comment of some integrity. So I thought maybe I was misunderstanding something when I noticed the scam. Then it happened again several times, there was no doubt.

Most of the issues on the site, what most people in most countries in the world would call scam issues, crookedness, may well be a combination of the background of the people running the site, perhaps limited knowledge of basic standards on any financial exchange, limited experience on their part etc.

The site is well designed even if the contracts are poorly thought out, but as it is it has zero chance of success. You cannot run an operation like that and succeed.

Any person who has some knowledge of markets, and is honest, who looks at the examples I give will call it scamming.

On another post, https://bitcointalk.org/index.php?topic=164255.msg2690056#msg2690056 Fireball says "we are constantly improving ICBIT to add transparency, to stick to the rules, etc" and "I am not interested in robbing people for a few hundreds BTCs when this thing could grow into a multimillion US dollars venture. That's the goal I wish to achieve, and our team is putting all efforts to make that happen.".  If his honest intention is to run a straight ship, and he takes real steps in that direction, I'll only be helpful. But first I want half of the bitcoin that were taken from me using dirty tactics. At that point I will consider financial matters square and would be supportive of genuine efforts to make it an honest site.

Boomerlu you are continuing the icbit tactic of "If you can't dazzle them with brilliance, baffle them with bullshit".

You know very well that the contracts on icbit are almost completely disconnected from the bitcoin market. icbit prices are most often the result of a position reacting to a trader who is not aware of what goes on, squeezing the trader and extracting the contracts cheaply. That was done to me several times, with contracts being put down against the movement of spot and apparently with knowledge of my account particulars that only icbit staff would have.

The nonsense about backwardation etc is getting old. You know it very well but I'll spell it out for anyone who might be deceived by you. The price of a contract at icbit moves for a short time with contracts bought by someone landing on the site. Once that person has some bitcoin vested all of the major price moves are artificial pushes deliberately meant to squeeze the client, force margin. There is nothing to do with backwardation, contango or anything else. Those words are used to con people plain and simple.

As far as "nowhere does volatility enter as a factor", that's silly. I've covered this in another post, you cannot have leverage that ignores volatility in valuation. It is the first signature of a scam.

You can use all the big words you want, maybe you will impress someone. I know bullshit when I hear it.

There is no legitimate exchange that allows the practices that are promoted at icbit. These scammers are pretending these are common financial practices on financial exchanges. They are not.

I posted a https://bitcointalk.org/index.php?topic=246845 lengthy complaint about crooked practices at icbit in the service section. This post is just a quick summary.

Please do not invest at icbit until you have read and understand what is going on there.

The proprietor of icbit, Fireball, made a statement after my complaint saying he wanted to run an honest exchange https://bitcointalk.org/index.php?topic=164255.msg2690056#msg2690056 . I offered to overlook his dishonesty if he refunded half of what was scammed, and reformed his practices. He has done neither so I will summarize some of the issues here on the scam section.

ICBIT trades against its clients.

Employees of the exchange who have access to the financial details of their clients use that information to place targeted trades against those clients. This has happened often enough, and volume is thin enough that there is no question that they are doing this. See the screenshots in the linked posts.

The first time I was squeezed, close to a margin call, it was very clear that another trader knew my exact position and the balances in my account as they put trades, down to the fraction of a dollar, that would force me to either deposit money or sell very cheap or face margin calls. That was the first time. It looked to me to be far beyond coincidence, but I deposited more money and went on trading.

The second time, again, it was clear the person laying trades knew my account balances. In other words they were either getting that information from the icbit staff or it was the icbit staff itself that was placing these trades.

The third time as well. It just would be astronomically unlikely, given the small volume, that the few trades placed would coincide so exactly with what was necessary to squeeze my position.

This happened several times, twice resulting in serious margin calls that forced me to sell very expensive contracts at a very cheap price. In each case the prices of contracts were pushed abnormally, sometimes in the opposite direction of spot, with no advantage to the person doing it unless they somehow knew that they would be forcing someone to close and thus they would buy the closed contracts very cheaply.

As was always the case on icbit, when something like that was pointed out people would pop up with http://www.bitcoinistan.com/chat1.jpg unusual explanations.

ICBIT encourages price manipulation and bizarrely defends this practice.

This is covered at https://bitcointalk.org/index.php?topic=246845 so I won't repeat it but it is one of the things that distinguishes icbit management as especially crooked.

An exchange is supposed to be a place where any trader can take a long or short position based on their view of the market. With futures a trader should reasonably expect that a member of the website staff or anyone else cannot push the prices in a way that completely ignores the underlying asset.

This is something that could easily be fixed but icbit evidently makes so much money off this manipulation that they do not change it.
A few examples, look at the trades at 11:59 and 23:59 on the following.

http://www.bitcoinistan.com/spot1.jpg

http://www.bitcoinistan.com/unlikely.jpg

http://www.bitcoinistan.com/final.jpg

These manipulations have the same effect of bitcoin itself moving up or down several dollars. So at icbit you are not trading bitcoin futures, you are trading futures based on manipulated prices. There is more about this in the other posts.

ICBIT uses the common scam practice of using technical jargon to baffle skeptical people.

If you go over the icbit chat there are three words you see over and over again. Arbitrage, backwardation and contango.

These three words are all real words. They are known to a lot of people, especially arbitrage.
On icbit the words are used to confuse people and the people using the words often use the words improperly.

Likewise the associates of the website, several of whom appear to be the same person, also use these words improperly. They are pretending to be professional traders in order to scam people.

The question you pose on that thread under the guise of paraphrasing my comment is very dishonest.

I'm sorry to see the level of ethics of people who have 'power' in the bitcoin world.

Post whatever conversations you like wherever you want. If  I notice something I feel needs a response I will respond.

xxxxxxxxxxxxxxx

Have to add this comment I noticed from you Stephen.

https://bitcointalk.org/index.php?topic=50817.msg1450792#msg1450792

You and Fireball and others who may be clones of you do not notice the dots on the path traced to closing spot. Do you know what those dots are, e.g. 1m 6m 1y on your diagram? Do you know how they relate to the word you and Fireball use again and again and again? You do not know what the word means. Please provide a hundred links to whatever investopedia you like. You do not know what the word means. Fireball does not know what the word means.

This is theater of the posers.

I beg any of you pretenders to please find out what the words arbitrage, backwardation and contango mean, and what they do not mean. They are not magic words that you can just toss out to throw a smokescreen when you don't know something.

"Why is price x lower than price y"
"Oh, it is backwardation"
"Ah, I see. It's clear now."

"Why did a December contract move against spot by $10?"
"Well its arbitrage. Maybe you don't have the knowledge to understand it".
"Oh yes. I see. Arbitrage it is, okay"

A whole bunch of people that sound like teenagers pretending to be experts. And how they got this far without their bluffs, their fraud, being called, who knows?

Please, anyone who might be thinking of investing with this group please read all the posts and ask someone who knows about markets before you deal with them. Be careful of this group.

You are playing the same game they play of trying to make it look like the deficiency is in the trader rather than the exchange. 

Your childish comments about FDIC say a lot about you. I have no problem with risk. On icbit it is not risk, it is outright scamming, cheating.

Any person considering investing there, I urge to simply look at all the posts regarding the site. There is no way to make money on an exchange when you are holding positions that compete with people who can create unlimited contracts and who can see the details of your positions, including available bitcoin.

Anyone who defends those kind of crooked practices is the same as the scammer./

Stephen the words are not used in the way a genuine trader would use them.

It's like if you stand outside a doctor's office and one person goes in with a broken leg and the doctor says "you seem to be suffering from an inexorable indisposition". Most people would say "Well, you're a doctor, that sounds about right".
Then another person walks in with a toothache and the doctor says "you seem to be suffering from an inexorable indisposition". Most people again would say "You are the expert. It sounds right".

This is again and again and again on the icbit site with the same three words. It just is not normal. A person will say "I am such and such from this or that place and I noticed the contango" and another person will say "Oh yes, well I am from x and I noticed it too" when any simple idiot can just look at the orders and see what happened. It's beyond silly. It's like when you are a small child in kindergarten and someone starts some word game that makes no sense to someone who knows the words.

So okay, in a very strict sense, in the example above, an alternate use of the word backwardation sort of applies. I say "sort of" because even that alternate use would apply normally to a contract that trades near spot. To use backwardation to describe a heavily margined bitcoin future that has been manipulated is a stretch. The word is meant to describe a market condition, not an act. A trader would not use the word the way Fireball did above and the vast majority of the time those three words are used on icbit it would make a person scratch their head.

icbit has potential if it is run as an honest exchange. That is a big change from how it is now. I was cheated in a way any honest person with trading experience would see. I don't know Fireball or any of the other characters on icbit or this board but I am willing to extend the benefit of the doubt that maybe Fireball is a younger person who does not know what is good and what is bad. If that is the case, if he is scamming simply because he does not know the difference between an exchange and a scam operation then he can return half the bitcoin he got from me and I will point out some things he is unaware of that tag him a scam.

I have to get one more word in about something that annoys me endlessly.

Fireball you own a futures exchange. Why not take the time to go online and look up the words arbitrage, backwardation, and contango? You and a bunch of people on your site use these words constantly but you are using them in a way that shows you do not know what they mean.

Just google the words and spend a few minutes learning what they mean.

I apologize if my comment is not help and faqs.

Sorry. Stephen I lost most of the money I have because I was slow to realize what was going on. Fireball claims he is trying to create an honest exchange. I am offering constructive feedback rather than simply exposing the current problems, in exchange for half of what they got from me.

icbit could be made into an honest exchange with protections against manipulation and in house trades. If Fireball wants to make things right I'll give feedback to help.

As far as I'm concerned that falls in the realm of "Help & FAQ". I'm sorry if it doesn't.