Nope, I don't want to make the exchange the arbiter of what is acceptable or not.  I want the exchange to ensure companies listing provide sufficient information for investors to make that decision.

Well that would solve everyone's problems - yours and mine.  And Ukyo could still get revenue from the trading so it works for the exchange.  If he does it then he should add some way for people with zero shares to be white-listed to see it - e.g. some box where they type in a ticker name (given to them by the owner) and from then on it gets displayed.

So you think the best way to inform your investors (who know what the business is) is to post a news item that has NO details in (becuase it's posted in public)?  And to do so at a time when (according to YOU in the news post) a lot of them aren't even signed up to Bitfunder?

Giving no information to half of them is the best you could think of?  Surely if they know about the business anyway you could actually send them .. I dunno -- maybe some actual information?  Or is it your intent just to give vague generalities about unidentified people doing unidentified things even to those who (allegedly) already know what the business is?

To answer a question you raised - why would someone who knows nothing about the business buy shares?  Well, speaking personally, I happily buy shares in businesses I believe are scams regularly (for my fund).  I do so because scammers, especially early on in the life of their 'business', are exceedingly predictable and easy to exploit.  Specifically, they'll happily sell shares at any price - but won't let the price crash : so you can back them into buying the shares back at more than you paid for them.  That's why I had an order up at 1% of your listed price - and I hope it's why the guy at 20% of price had his up (I pulled mine after he outbid me - as I don't like to go over 5-10% on blatant scams.  I'll go to 30-40% on more subtle ones where the likelihood of selling on to an idiot is much higher).

Other people, I guess, treat it like a lottery ticket - that's the ones who never research what they invest in anyway: so not knowing the identity of the business doesn't especially affect their (nonexistent or unused) judgment.

You need to read the thread - especially the earlier part of it.  Sales are a possibility, maybe even a likelihood.  So is producing loads more ASICs for self-mining.  So it producing next-gen ASICs.

You misunderstood my point.

There's PLENTY of reasons why YOU (or other businesses) would want to list on the exchange without disclosure.
My point was that there's no reason why the exchange should let you.  

Hence me saying "why the exchange shoud list you" rather than "why you should ask to be listed".

Two entirely different things.  Though I'll admit there IS one reason why an exchange would let you list - to increase short-term revenue/activity (at the expense of credibility).  So rather than saying "no conceivable" reason I should have said "no valid reason" or "no sensible reason".

EDIT: There would, of course, be absolutely nothing wrong with Ukyo allowing private companies  to use the exchange - with their shares only visible to those holding them.  Then the rest of us wouldn't have our screen-space and band-width wasted on meaningless stuff of no interest or value to us.  And you'd be spared the problems associated with people buying your shares in error, not realising they weren't for public consumption.  If you do it in private you can shuffle funds between your 'transparent' accounts all you want to simulate an actual business - and if your investors are happy with it then great.

So why did you sell 500 shares at 20% of your listed price to an anonymous buyer?  Or was that a pre-arranged sale to someone who knew what your business was (Ukyo can likely easily verify that if you claim it to be the case - so would be a brave bluff to lie)?

Why, for that matter, did you sell 1 share to ME at 1% of your listed price?

Why, for that matter, do you list shares for sale (of your own) at all?  You DO realise there's a transfer function?

Why, shortly after listing, did you immediately put up 100,000 shares for sale (you took it down within a day) whilst only have a few (from memory 17 - but was defnitely under 100) shares in the hands of investors?  Did you really have private investors lined up to buy 100K shares?  Weren't you at all concerned someone not knowing the business may accidentally buy them - not realising it was a private thing?

Why, do your (supposedly transparent) accounts have transfers from your Expenses account to an unidentified account, which then promptly sends the funds on to your Revenue account?

Why, if all your investors are obtained and contacted privately, did you post some fluff news post (about unidentified celebrities doing unidentified things with the unidentified product produced by your unidentifed company) to Bitfunder - in which you actually CLAIMED that most of your actual (alleged) investors hadn't even signed up yet?  Surely you sent an unexpurgated version to your actual (alleged) investors - making it only of use to attract investors who DIDN'T know what you're doing.  Which is what you claim is NOT your intent.

There's actually one more glaring thing that makes it all a mockery - but it'll be a few weeks before I can point it out without you being able to rectify it and claim it was just a mistake/late action on your part.  You don't mind me not disclosing it yet I hope - given your own love of non-disclosure.

You're trying to value ASICMINER based on the 6 TH currently mining.  Remember there's another 6TH or so nearly ready and chips for 50 TH more already starting assembly into finished units.  Plus, the main value, which is the ability to produce loads more very cheaply.

If you think of ASICMINER as just a mining company then obviously it's WAY over-priced.  But it's not just a mining company.

Snipped your post to avoid this one being too long (and far too lazy t o quote specific parts).  A few points:

1.  When I talked about comparing to other minign companies that's what I meant.  Mining companies - not ASIC manufacturers who don't mine OR have shares on the market.  You were trying to value ASICMINER as though it were just a mining company - hence I was comparing to those.

2.  Pretty sure (as in certain) friedcat said the yield was around 95%.  I agree there's no info on subsequent failure rate - but unless it's ridiculously high there's little meaning to it yet.

3.  I agree there's been no bills presented yet.  But then I've never seen bills for expenses charged to other companies - e.g. where's the invoice for S.DICE's consultancy this month?  Or S.MPOE's payment for PR?  Whether they were paid in BTC, USD or WOW gold has no real bearing on what quality of accounting is required - as with ASICMINER there's no proof either of those items were ever charged for or paid.  As a (small) shareholder in ASICMINER I'd far rather time was spent getting the rest of the gear mining than preparing accounts right now - though I DO definitely expect them to be prepared in the not too distant future.

4.  Not so convinced about Avalon's under-promise and over-deliver.  Their ordering was barely delivered at all and their claims of "we've shipped" actually meant "we've sent out a few prototype units and the rest will go in a month's time".  They're certainly saints compared to BFL - but, as you pointed out, using BFL as a comparison for ANYONE is setting the bar rather low.

5.  I do agree that the ASIC saga likely has some big twists to come - I don't have much resting on it whichever way it turns out : I'm ahead on ASICMINER now even if they openly defaulted right this instant (i.e. I've already profitted - for my fund - by more than our total remaining exposure to them).  And, of course, I always have very low exposure to all BTC mining 'companies' - there's NO purely mining 'company' I ever hold for longer than it takes to flip it for a quick profit.

6.  The "sweeping problems under the carpet" is likely largely a cultural issue more than anything.  When I lived/worked in that area of the world two massive differences in culture within business were apparent: 

a.  (Very relevant) People would rather bang their heads repeatedly against a brick wall than ask someone with the relevant tools to demolish it.  Admitting to a problem was seen as somehow losing face/demeaning - hence problems remained concealed as long as possible.  i.e. often until the chance to easily remedy them had passed.
b.  (Totally irrelevant) Noone would argue/disagree with their (work) superior in a group setting.  When I did it regularly, other (local) workers spoke to my manager privately about it - concerned that I was showing him disrespect.  He, of course, just laughed and explained that one of the main reasons i was there was BECAUSE I was willing to argue/disagree with him and that when I did so there was nearly always an issue that was better resolved than left unaddressed.

Never underestimate cultural differences when looking for an explanation for behaviour.

WEEKLY REPORT




Well - it's been an interesting week to say the least.  LTC has well over doubled in value vs BTC.  Even with out BTC exposure heavily limited by our bonds we still ended up making a 4.82% loss on the week.  My spreadsheet indicates a trading profit of around 17% - it's hard for me to work out whether thats correct or not as the change is so dramatic that the precise timing of when we made the BTC-denominated profits which kept our percentage exposure roughly unchanged is of massive importance.  I know actual profit from trading was somewhere in that general area (it was over 10% before the last big spike and we've had more profit since including some from actually trading LTC/BTC on the two most obvious drops back down).

During the big jump today, an investor sold back 46 units to the fund at 55.3.  As I was afk when the spike happened they actually managed to sell back at slightly above NAV/U (which I'd guesstimate to have been around 53.5-54.5 at the time).  On the face of it that's bad news - in fact, given we already showed we can sell units at over 10% above NAV/U it's no problem at all.  If investors would prefer it, I'm happy to take those units off the fund's hands at 60 LTC each - otherwise I see no reason or need for the fund to sell them at all.  With LTC having risen so much we're no longer anywhere near our limit for bond-selling - so I believe the increased share of profits for all investors is worth far more than the ~0.1-0.3% drop in NAV/U caused by the sale being slightly over NAV/U.  As we aren't near our bond limit and don't use most of our LTC, the sale back of some units has zero impact on the amount of profit we can generate but increased the growth/unit per week week by about 5% or so of what it would otherwise be.  i.e. one week of making 5% growth then everyone left in the fund is better off than if those units had not been sold back.

This week I've started trading a bit more aggressively on LTC-Global.  I just haven't been trading big batches at a time recently - my sizing of Bids has fallen well below where it should be given our growth.  This sunk in when, at one stage this week, we had holdings in TWELVE different securities on LTC-GLobal - yet in total it amounted to under 5% of our NAV.  I've been placing Bids worth 100-200 LTC when I should be placing ones worth 500-1000 LTC : simply because I just haven't properly adjusted to the fund being worth over 5 times what it used to be.  This won't solve the issue of our LTC stockpile but will make a start on it.

I've referred a few times to a proposal for using our LTC.  There's actually two things I have in mind - one of which I can't discuss until it's ready to go.  The other one is that I'm giving serious consideration to offering LTC loans - and would welcome feedback on this (especially from investors - though potential borrowers' views are also definitely welcome).  They key points to it are:

1.  All loans would be very solidly secured - with no exceptions.  This would be done by requiring securities to be provided as collateral - with them valued very low for the purpose of collateral.
2.  Each loan would use a diffierent account - into which the securities would be transferred, so zero confusion over dividends etc (on repayment I'd change the password and they borrower could then access the account and verify all dividend history themself).
3.  Only a small subset of securities would be valid for collateral - ones where there was a long enough (and solid enough) history to make default a low risk.
4.  Only individuals with a significant history and/or contribution to the community would be eligible for loans.
5.  Surrendering the collateral instead of paying off the loan would NOT be a valid option for lenders - doing so would be explicitly defined as scamming.  Hence the only way we don't get repaid is if the securities default AND the borrower defaults.  With pretty tght selection criteria on both that should be extremely unlikely.
6.  Rates would be very competitive.  I'd be looking at a minimum loan size of 1K LTC with a 1% arrangement fee then interest at about 0.14% per day compounded - just under 1% per week.
7.  Repayment terms could be anything (reasonable) borrowers wanted - from gradual pay back to payment in full at a specific date.
8.  Borrower would NOT have to disclose any personal ID or even provide the reason for the loan.
9.  Details of loans would be published - minus the identity of the borrower (that would be provided only if they defaulted).
10.  In the event of late or non-payment we'd have the right (but not obligation) to immediately sell collateral into the market to reduce or totally pay off the debt owed.  In practice I'd be reasonably flexible with this - all the time that the collateral more than adequately covered the debt.  But obviously any piss-taking or trying to f*ck around and the collateral just gets dumped into bids and they get whatever change is left over.

I think we could safely lend out somewhere around 15k LTC with zero impact on our trading and bring in an extra 150 LTC (which is now 1 BTC or around $40-$50) profit per week (plus the 1% arrangement fees).  Too much effort for too little reward?  I believe the risk to be absolutely minimal - as I just wouldn't loan unless I was certain about the collateral (e.g. I wouldn't take over 50% being one security with exception of LTC-ATF - meaning multiple defaults necessary to realise any real loss).

I think the number of people valid for such a loan AND needing one would be small - but there's a few obvious circumstances where it could be useful: one of which being to buy MORE of the securities being used for collateral : where obviously they can't sell them to raise the funds (if they believe the securities will rise in value by more than a few percent per week then this makes perfect sense).

I also have another project in the works - hopefully I'll be in a position to disclose this and put the securities for it up within the next week or so.  I won't be progressing the loan idea further until this other project is done - so there's plenty of time to discuss it and it's by no means certain that we'll go the loans route at all.

For now I've shelved running an ASICMINER passthrough.  Aside from anything else, it's not a great idea to start a new pass-through whilst LTC is so volate - I'd have to be glued to the screen to leave any orders up.  And with pass-throughs already on Bitfunder/BTC.CO at near zero fees there's no real need for one.  Our own 10 ASICMINER shares should be getting transferred to the BTC.CO pass-through in the next few days - whilst there's no urgent need to sell them, I'd like the option to do so if/when I can get the price I'm looking for (or if events make me revise that price down).

There's no management fee this week.  As per the revised contract the HWM is NOT adjusted down (under original contract it would have been).  So no management fee will be taken on growth up to last week's ending adjusted NAV/U.  Looking again at BTC-E, LTC seems to have dropped back a bit since I made the spread-sheet - as HWM is not adjusted this has zero impact (we're still not in profit) hence me not worrying about posting the spreadsheet immediately whilst it was up to date (which I had to do last week as the exchange-rate altered what units were taken as management fee).

Bid for now is at 52 (and quantity at 50) - I'm being cautious as the exchange-rate has been moving a lot.  If anyone DOES want to sell back, try to PM me - I'm always willing to work out a more accurate (and almost certainly higher) one based on the exact rate at the time.  Once LTC settles back into a new range I'll put more competitive rates and the usual quantity of 100 up.  Right now the fund could buy back every unit except my own with cash on hand and STILL have sufficient backing for the bonds - so I've no objection at all to buying back any number of units at a fair price.

Spreadsheet in OP has been updated with all results up to and including this week's.

Or ones with X number of members signing a thread asking for it.  With only members with accoutns older than X months and/or Y posts eligible.

Number of threads is obviously meaningless - remember all the threads created by the same few spammers (who appeared to be thedevelopers but were embarassed to admit it) during the week or two TRC started?

I'd also support only allowing a single thread for buying/selling/giving away per currency (including LTC and XRP).  If they're big enough to be on an exchange then use it.  If not then 1 thread is plenty.  Every new currency gets the same dumb threads of "Giving away 1 XXC" where the cost of the power used installing the client is more than the value of 1 XXC.  On which note, I'll laugh when XRP gets listed on an exchange - it being easier to trade it on an exchange than inside Ripple itself.

Silly thing is the reason he wanted the loans (which he explained) was one where it was very likely (almost inevitable) that he'd not be around much for the next few weeks (a business opportunity which involved him doing some carpentry work for farming friends).

When someone:

Will likely not be around much if they're telling the truth.
May not be around much if they're lieing/scamming.

Then when they aren't around much it is NOT evidence of scamming.  That something is compatible with a theory does NOT, of itself, make it evidence in favour of that theory.  Bayes theorem etc.

In fact the timing of his absence logically tends towards it being evidence of him NOT scamming - as were he scamming he'd surely be trying to beg/borrow/steal more right up until he got a scammer tag (or at a minimum until the first payment due date on BTCJam).  Not vanishing and leaving money on the table - that's what someone who had some other business to take care off does.

Which is not to say I'm by any means confident his fiat-denominated business opportunity is going to make enough profit to justify/afford taking out BTC-denominated loans to pay for it.

Not seeing a big difference - BTC.CO has had 1200 or so trade and BitFunder maybe 1500 (no 30-day total on view, estimate from scanning history).  Bitfunder started selling first but BTC.CO sold 1k first - then Bitfunder passed it as BTC.CO had no new ones up for a day or so after their first 1K sold out.

Low trade on other securities isn't relevant when there's plenty of buyers for ASICMINER.

If I was buying I'd likely put up bids on both and cancel one when I bought on other.  If I ended up buying on both then I'd try selling on both and repeat until I ended up with number of shares I wanted.  Nut then I already trade (and have funds) on both sites.

If I was selling right now then it's a close call - I'd go BTC.CO if I was willing to put up an Ask and wait (Low Ask is significantly higher there plus a lot less other shares competing against me to sell) and BitFunder if I wanted to sell quickly (higher Bid there).

I was talking about more batches of the current ASIC not a newly developed next-gen one  (which WOULD cost significant cash).

From memory friedcat indicated that the cost of further chips was under $1 each - to that has to be added the PCBs, cooling, power supplies, rack-mounts etc.  But the bulk of expenditure to date has been on the actual development of the ASICs not the production of them - and that's a one-off sunk cost (for this design).

That's why you can't compare ASICMINER to other mining companies - as they just can't expand their ASICs for the same low cost ASICMINER can.  We don't have enough information to accurately work out the cost/TH for ASICMINER to produce more hardware - but I'd be shocked if it was anything like as high as 25% of what other miners currently have to pay to get BFL/Avalon hash-power.  I'd actually be surprised if it was much over 10%.  We already know BFL are happy selling their FIRST batch at a 50% discount (in exchange for return of pretty much useless to them FPGAs) - which is the batch in which they need to be making serious inroads into development costs (as price-cutting won't be too far away once the back-log gets cleared).  That indicates that production costs are such that they could sell at half the price and make a good profit (if not, then they're majorly screwed as they'll never recover development costs).  I can't see component/PCB/assembly costs being higher for ASICMINER in China than for BFL in the US.

And do remember that the next 50 TH of chips are already done - with assembly starting soon.

Right - I see your responsibility as being to ensure those listing provide some "proof" that they operate the business and of any claims they make in respect of its past performance.

It's down to investors to check the "proof" out and determine just how strong it is as evidence.  But if you don't do your part (making the issuer provide the proof) it's impossible for investors to do theirs (assessing it).

It was the only buy order up.  I'd cancelled my .0001 one below it.

If a business needs to raise $X or values itself at $X then there's no way it can ever have a good reason for selling shares well below the price that would raise $X.  Aside from the impact on the business it dilutes other shares previously sold.  Plus it's classic scammer behaviour

One of key things all IPOs need to state is the pricing polciy of shares (be it in batches, in BTC/share or BTC equivalent of USD/share).  There's no reason why he couldn't have stated that in his contract even if he kept everything else quiet.

I'm NOT in favour of excessive requirements in terms of ID etc.  But there's a bunch of very basic stuff that absolutely needs to be in every contract.  And #1 on that list is disclosure of the business - without that it's impossible to assess anything as, even ignoring financial issues, the risks can't be determined without knowing what area the business operates in.

Similarly, I'm NOT in favour of the exchange being required to (or liable for) assessing the viability and legitimacy of businesses.  But the exchange SHOULD be responsible for ensuring that anything listed provides sufficient information for potential investors to make such determinations themselves.  That again means the business needs to be disclosed.  It also means that (as was NOT the case with the other scam one) if a business claims a record of past profits then they should be providing SOME kind of evidence of it that potential investors can investigate to make their own determination of whether those profits look real or not.

The single biggest deterrent to scammers (and way to avoid problems down the road for legitimate businesses) is to force them to publish their contract and answer questions here BEFORE they get to start trading.  It's pretty much at that stage on BTC.CO/LTC-GLobal now.  There WAS one that got approval on LTC-Global without a thread first,  At the time I posted about it calling whoever approved it idiots.  It paid one dividend then vanished.  Since then, no business without a discussion thread has made any significant progress on listing.  If someone refuses to handle criticism/questions over their business BEFORE selling shares then there's about ZERO chance that they'll satisfactorily handle issues that arise down the line due to unclear/incomplete/bad/not adhered to contracts.

BTC.CO one takes a small management fee from dividends (2% now I believe).  Transfers in/out of it are free as well.

So right now if prices are the same you're better off buying on Bitfunder.  If you can get them 2% or more cheaper on BTC.CO then you should buy there.

If looking to sell shares then it's other way round - you'd want prices to be 2% or more higher on BTC.CO for it to be better value for you to deposit your shares there to sell.

Obviously if you already prefer one platform to the other then you should use the one you prefer unless the price difference is heavily in favour of the other.  I use both - and they each have their strengths and weaknesses.

I expect prices to remain fairly close on both - as if there's any big difference between them people who use both will withdraw from one and deposit into the other.

Having two exchanges do it is great for us - as it forces them to compete both on terms and on price: they both want to attract users more than make a profit on ASICMINER, so we get pass-throughs at no cost (BitFunder) or very small cost (BTC.CO).

Think you're misunderstanding something.  The IPO was on GLBSE at 0.1 per share.  I think the chance of the price falling below that is pretty small and pretty much zero for it falling below that before all shares have received at least 0.1 in dividends.

Based on short-term mining I get a value of around .2-.35 per share : not too far off from your own (once you double yours for you error on the 400k shares and add on .04 for the higher dividends until 0.1 is reached).

Now if that were the only value of the share then the price would obviosuly drop as dividends were paid.  But the ability to produce more batches of the ASICs at minimal cost adds rather a lot more to the long-term value.  And assuming they learn from the various fuck-ups made this time, owning a portion of income from future ASIC development they do has to add some value to the shares as well.  As does the potential to sell units to the public (though I'm dubious whether they'll be in a position to do this before demand drops a load).

As for shorting - I'll be interested to see how that turns out.  I can see scenarios where it'll turn out to be a brilliant move (e.g. the ASICs only have a life-span of a few months) and ones where it could turn out to be a disaster (imagine shorting it then BFL's units only have a life-span of a week).  Keep us all posted on any significant shorts that happen.

Oh - I wouldn't be surprised of he DOES have a website and some sort of fledgling business.  But it's still a scam as he's trying to obtain money based on false statements.

The main reason it shouldn't be listed (even without his rather dodgy accounts) is because there's no disclosure of the business.  That makes it a gamble rather than investment - and turns your site into a gambling site rather than an exchange.  His 'business' is Satoshi Dice without the odds being published or verifably fair - you send off some BTC and may get back none, a small amount or a large amount with nothing you can do to assess the likelihood of the various outcomes let alone influence them.

If someone won't disclose their business then there's no conceivable reason why an exchange should list them.

Of the shares transferred to other accounts, how many of those other accounts were his own (obviously you can't tell me the answer - but it's something you should look at)?  One of favourite tricks of scammers/ponzis etc is selling/transferring shares to other accounts of their own - to make it look like there's more activity than there is and to allow them to inflate apparent dividends whilst not actually paying out much.

When you say you've locked down his ability to issue more shares do you mean he can't sell shares or that he can only sell the 1 million he already has?  There's a big difference between "he can't sell anything" and "he can only sell 10k BTC ($400k) worth of shares".  If the former then I guess the 500 sale earlier would be one of his alt accounts dumping into the only open Bid as he realised he'd been caught.

I'm failing to see how you ever thought he had a company worth 50K BTC - the value it supposedly has with 5 million shares and sales being at 0.01 BTC each.

Not sure why Ukyo lets crap like this and Exchange.ESIF list on Bitfunder when it's immediately obvious just from the prospectus that they're scams.  There's now plenty of reasonable or half-reasonable assets on the platform - and scams like these don't actually attract much volume (and what they do attract the exhcnage only gets to see about 1.333 times before it vanishes).

Anyway, here's why this one is a scam.  Some of the stuff here you'll have to check out yourself - other bits you'll have to take my word for (or ask Ukyo to check).

1.  His description says "This is not a public company or corporation, but is a private business. We are using this service to manage shares and dividends. We cannot prevent shareholders from selling or trading their shares to outsiders using this service, but it is the best system available so we are using it."  Yep - according to this he wasn't listing to sell shares himself, but to help manage the accounting.  And he can't help it if some shareholders trade on it.

But that's not what happened.  Right after listing he slung up a block of 100k for sale.  We know it was him - as all the shares except 17 (yep - only 17) were in a single account.  And since then he's been trying to sell non-stop including posting a totally laughable news release.  So we aren't off to a good start are we - when he lies about the primary intention of listing.

2.  He hasn't even identified the business.  I'd have thought Ukyo would have the self-respect just to laugh at him and tell him to fuck off when he asked to list without identifying the business, but apparently not.  Think everyone knows the track record of past companies that didn't even identify their business.

3.  Another common give-away for scammers is that they don't actually mind what price they sell shares at : after all they haven't got to protect investors' interests or raise a specific sum, they just want whatever they can get.  So I thought I'd see just how low he'd sell shares at.

I slung up a buy order for some at 0.0001 - that's 1% of the price he was listing for sale at.

Not long after :

2013-03-01 21:30:29    BUY: (Biz27B-6): 1 @ ฿0.00010000/ea

Hmm, what to do next?  Well obviously put it up for sale just below his own sell orders (delay is mainly because I didn't notice I'd bought it).

2013-03-02 19:06:44    SELL: (Biz27B-6): 1 @ ฿0.00990000/ea

Ah well, only 1 share - would be different if he did it on a bunch.

Like:

2013-03-09 14:10:34       ฿0.00995000    1    ฿0.00995000
2013-03-09 14:09:31       ฿0.00200000    500    ฿1.00000000

Yup - selling 500 at 20% of price he lists at, then immediately buying 1 off his main Ask so last bid is still high.  Just hope whoever got that 500 knows to relist under him and keep lowering price down.  Do I KNOW that sale is him?  Nope - but it's easy enough to check from cached ownership lists on Bitfunder.  Just can't be bothered to do it myself - as I don't need convincing he's a scammer.

4.  None of the above is conclusive proof of scamming individually.  Put together maybe it is.  But here's the real kicker.  He talks about having transparent accounting - where investors can see revenue and expenses go in and out of the business' accounts.  Now I was sceptical of this - how can it be transparent when we have no idea who is paying or being paid by him?  How can we be sure he's not just funelling BTC through a mixer to fake up his accounts?  Turns out I was wrong - it IS transparent and laughably so.

I had a look at the accounts addresses and was amazed and amused by what I saw and by his total stupidity.

The revenue account (starts with 1BizRev) receives funds in from various addresses and sends funds on to the Expenses account (starts with 1BizExp).  The expenses account then disburses these funds to various addresses.

Where it becomes transparent is because if you look at these other addresses you find some where ALL the account does of significance is receive from his Expenses account then an hour (or less) later send it back round the loop to the Revenue account.  Yep - he was too dumb even to use a mixer and made his accounts totally transparent - he's cycling the same cash around to make it look like there's business happening.

Here's some examples :

http://blockexplorer.com/address/17MVKyVjFsMAnsFKidGmJCWGmUfstLUXRa

receives 1.3 BTC from his expenses account (which received that from his revenue account) then 10 minutes later (yep only TEN minute later) he sends exactly same amount back to the Revenue account.

http://blockexplorer.com/address/1NsnBcrk6jJQGcwWCCAmBHcdG9VJofSGRA

This time he waits an hour before sending the funds on around the loop.

I spat coffee all over my keyboard when I first saw just how obvious it was - had expected it to take at least 10 minutes to work out just how he was cycling the funds around.  I haven't looked at half the addresses.  Would assume some will be receiving withdrawals from Bitfunder and pushing them round the loop - the size of his transactions has slowly grown once he sold some shares so had some cash to move around.  And would also assume some of expenditure transactions will be deposits to his alt accounts on Bitfunder so they can buy shares and make it look like there's demand plus assist his pretence of having private investors.

Anyone still think it's legit (other than Ukyo)?

Exchange-rate : .00533
Adjusted NAV/U : 56.7897
Bid at : 55.3

Been giving more updates this week so investors have an idea what's happening with the large LTC exchange-rate movements.  Don't expect me to keep doing this when exchange-rate stabilises - normally I'll only give mid-week updates if something major has happened (though you can get an idea how NAV/U is moving from what my Bid is at - as I update that after any decent sized change).

LTC has risen further against both BTC and USD - meaning we're still in loss for the week (though significantly less so than on my previous update).  At present we're down about 1% on the week - with about 12% trading profits if exchange-rate movements were factored out.  I think this very clearly shows the benefits of the policy with our BTC-denominated bonds - when LTC fell we made very nice profits and when it rises sharply we only make small losses (and the value of our units in BTC or USD has gone through the roof).  You'll struggle to find ANY other fund which delivers this (a price that's fairly stable even with major exchange-rate movements against another currency in which it holds very significant investments) - as it's essentially impossible to do without hedging vs currency movements in one way or another.

It's touch and go whether we'll end the week in profit or not.  I COULD put us in profit immediately (there's holdings we have which could be sold to realise an immediate profit - and our ASICMINER shares could be marked up significantly from 0.25 BTC) but I'm not going to change my valuation policies just to make the figures look better this week.  A 1% loss with a 100% rise in the value in BTC and 200% in USD would hardly be a disaster after all.  We just need one or two half-decent trades to go through to end in profit anyway.

Investors should also be aware that LTC rising is likely to DECREASE our profit anyway.  That's because the majority of our profit comes from BTC-denominated trading.  If LTC is twice as strong vs BTC then we need to make twice as many BTC to get the same percentage rise in LTC-denominated NAV/U as we did before the rise.  Taking that into account I'm actually very pleased with a ~12% trading profit this week.

Weekly report will be tomorrow (later today in some time-zones) as usual.