If anything the Intersango group has helped me discover some primal emotions I did not realize I had in me before. I give them that much. So far, this is how they seem to operate based on my observation: 1) Claim to be the most reputable and skilled group associated with Bitcoin. 2) Solicit for customer money. 3) Squander customer money. (It is just numbers!) 4) Pretend customers do not exist. 5) Actually get away with it. 6) Rinse and repeat (Bitcoin conference 2012 anyone?) Just take a look at the speakers list and guess the topic Patrick will cover. That's right: Patrick Strateman (phantomcircuit) is CTO of Intersango, the largest UK exchange. With a speciality in security, he has led the way building up this platforms during the last year in his capacity as a director for the Bitcoin Consultancy. Patrick will elaborate on the issues and challenges with running a large scale platform that must scale under high load while being secure and unexploitable. dafuq? This guy squandered my deposits (I have not seen a single bitcent of my ~40K USD for over 100 days). Called depositors names. Didn't even follow rudimentary security practices like 2factor. Doesn't seem to care. And people are really going to sit there listen to this talk as if it is mana from heaven? srsly? I'm all for the Bitcoin conference but don't rub it in my face. This is just offensive. |
|
|
|
|
I think that what Zhou was saying is that the 20K BTC + 140K USD that he is able to recover from Chen would cover the 40K BTC + 40K USD stolen from MtGox if you apply the ~$5 conversion rate that Bitcoinica used to close open positions.
I would argue that property should be returned in the same form it was originally stolen.
|
|
|
|
Honestly, this sounds like an attempt to avoid being named in any lawsuits related to the collapse of Bitcoinica and/or being pursued by a liquidator for the recovery of funds.
Possibly. He certainly did his best to avoid being named in lawsuits (who can blame him?): I contributed 5,000 BTC and talked to the creditors regularly exactly because I wanted to avoid any lawsuits against me. Anyway, I will now stop selectively quoting Zhou from the conversation I had with him this week. If Zhou agrees, I would be happy to make the entire conversation public. |
|
|
|
Innocent or not doesn't matter here - he chose to pay off his friend with money returned from "Chen". These 40.000 belong to US and WE didn't agree to give Zhou Tong a loan! Well, technically I guess the 40,000 USD belongs to Bitcoinica. And the operators of Bitcoinica apparently didn't really care about recovering those funds anyway. Also consider:
1. The amount recovered is substantially less than stolen - we don't know in detail what happened here (there is enough room for a profit margin).
2. Chen A MILLIONAIRE didn't replace the cost of his laundering activity
3. Zhou protects Chens identity
4. Zhou strictly rejects to provide information about his 40.000 AurumXchange transaction to simply unlock these funds and repay the 40.000 Dollar loan he took from us without permission.
Especially 4. makes his promise to repay from future profits implausible. It's time to put the screws on.
Zhou addressed some of those concerns to me so I will quote them here. on #1: Bitcoinica announced the exchange rate to be $5.1 per BTC. At this rate, all funds have been recovered. I personally feel unfair too, that's why I suggest you to take actions against Bitcoinica. on #3: I'm not protecting his identity. I just deem it to be unnecessary at this point. He is not running away (AFAIK he doesn't even have a passport), and the fund return is pending Bitcoinica's liquidation. on #4: I didn't take possession of any part of the stolen funds myself. The $40,000 is still with Chen Jianhai because I was allowed to not facilitate the return of this portion until the AurumXchange issue sorted out. I have asked the creditors to push AurumXchange to transfer all the locked funds to Bitcoinica as well. You can do the same if you like. |
|
|
|
@Zhou How do you in all seriousness propose to return the remaining 40.000? I had a conversation via email with Zhou earlier this week and this is what he told me: I'm willing to personally commit the liability after the liquidation is done for the shortfall of funds, paid back from the profits in my future businesses. It is nice of Zhou to suggest this but I don't think it is very practical, nor would it be ethical for creditors to accept Zhou's money if he really is innocent. Is anyone going after Chen? I've lost track a bit of exactly what's been lost and recovered. From memory (please correct me):
Linode theft; X BTC (losses covered by investors I believe)
Rackspace theft: 20% of BTC; 0% of USD
MtGox API theft: 40,000 BTC; 200,000 USD
Here you go: - 2012/03/02 - LINODE hack. 43,554 BTC stolen. LP (Tihan’s fund) covers loss.
- 2012/05/11 - RACKSPACE hack. 18,547 BTC Stolen, Full data loss. LP covers loss.
- 2012/07/13 - MtGox account compromise: 40,000 BTC and 40,000 USD stolen.
- 2012/08/14 - MtGox fund recovery from Chen: 20,000 BTC and 100,000 USD recovered.
liquidators typically charge upwards of $200 per hour.
Ouch! Now I understand the meaning of the word 'liquidator'. At that rate there will be little left (Consider the time needed to reconstruct the DB and vet claims). I certainly hope Tihan can find a receiver and liquidator that does not eat baby panda hearts for breakfast. Personally I'm hoping to see at least 70% back. (That would still mean a ~12,000 USD haircut in my case..) |
|
|
|
MNW's bet makes more sense then buying TYGRR.BOND-P for > 0.5BTC, which people do as we speak.
Still seams like free money essentially... If there would only be a way of shorting GLBSE bonds.
 |
|
|
|
|
Seems pirate has some troubles with payouts and could use some help... Perhaps he should consider hiring the Intersango guys to take on reimbursement? I hear they do a mighty fine job.
|
|
|
|
Looks like a classic ponzi so far & will probably end like one. So: 10 BTC
1PDVKFicyoX9xT15oHt87JCaMGmpmJKcaU
pirate is gonna pirate. |
|
|
|
I liked this recent NPR article on how to identify ponzi's: http://www.npr.org/blogs/money/2012/07/30/157606305/four-signs-your-awesome-investment-may-actually-be-a-ponzi-scheme1. High return! Low risk! 2. Where does the money come from? It's complicated. 3. It's illegal, but it's safe. 4. They don't even want your money. Snippet: Ponzi schemers often feign reluctance to take an investor's money, which can defuse any suspicions. They also invoke safe-sounding words, like "bank," "securities exchange," "voucher, "guarantee," or "full faith and credit," and call their investments "trusts" or "trust units." Many foster friendships and even romantic relationships with their marks, and market their investments through the houses of worship they attend themselves.
In the end, Frankel writes, "con artists remind us of honest people. They are similar to entrepreneurs, eternally and unshakably optimistic, and they act like (and are) gifted salespeople." |
|
|
|
|
Perhaps blockchain related improvements? (better pruning, compression, standard client does not have to download the entire chain, etc.)
|
|
|
|
|
Yep, that matches with the mental image I had of Chen. Must be the guy.
Looks like it is going to be hard to retrieve the stolen funds. First off - he probably converted all the bitcoins into ancient relics that are likely booby-trapped and heavily guarded in his secret lair. Obviously the guy has some mad kung-fu skills as well. This one is gonna be tough... I better start practicing my crane kick move. It is the only way.
|
|
|
|
FYI - IEEE Spectrum now also posted an article on this topic: http://spectrum.ieee.org/tech-talk/computing/networks/first-bitcoin-lawsuit-filed-in-san-franciscoA recent theft at Bitcoinica, one of the largest Bitcoin exchanges, resulted last week in a debut for the currency in the California court system. Four prominent members of the Bitcoin community, including Jed McCaleb—the original developer of Mt. Gox, the largest Bitcoin exchange and a competitor to Bitcoinica—filed a lawsuit on 6 August against the company, seeking reimbursement for US $460 457 in lost funds.
While there have been multiple hacking incidents since the cryptocurrency went online in 2009, this is the first time members of the community, have taken legal action.
The whole affair started in March when hackers skimmed over 46 000 BTC from the exchange with an attack aimed at the Webhost, Linode. Three months later, Bitcoinica Consultancy, which has supposedly been handling the exchange since this April, announced that it lost another 4 ,000 BTC (about $350 at the time) through an unauthorized withdrawal from a Mt. Gox account that the company had set up while disbursing refunds to its customers.
Amir Taaki, speaking for Bitcoinica Consultancy, explained that after the initial breach, Bitcoinica failed to change some of its passwords. One of those was a duplicate of the password they were using for their Mt. Gox API key. On June 12th, someone tried using this password to gain access to Bitcoinica's Mt Gox wallet, and it worked.
The announcement ignited a backlash of accusations from victims who now suspect that the theft was an inside job. While waiting for satisfaction, their losses have only increased. At the end of the July, Bitcoin was trading below $7. Today, it hit $12 for the first time since 2011.
The situation has been especially complicated by the fact that no one seems to really know who is responsible. Zhou Tong, the 18-year old Chinese developer who originally started Bitcoinic claims to have sold the company right after the March theft to the British Bitcoin exchange, Intersango. He now also claims to know who broke into the Mt. Gox account and to have squeezed a confession from a Chinese Multi-millionaire named Chen Jianhai, a story which many victims quickly interpreted as cover for his own involvement. Meanwhile, the Bitcoinica Consultancy is thought to have control over Bitcoin's legal operations, but in emails, they have declined to confirm this role, and have reportedly stopped responding to disgruntled customers.
And so, it seems that those who want to help have no power. And those who have the power aren't talking.
Under these circumstances, it will be very interesting to see what happens when many of those involved convene next month at the Bitcoin Conference in London. |
|
|
|
oh fuck off. Name me one instance where I lied, or conducted myself improperly. Point them to me. It was me who made public all the emails, released publically all the documents/agreements, released the sourcecode and pushed for communications from zhou's first announcement (everyone told me to be quiet). Your thinly veiled threat is pathetic and petty.
No need. You just pointed them out yourself: The release of private correspondence and the leaking of company's proprietary source code do most certainly violate any contracts you had with Bitcoinica LP. I'd hardly call that 'conducting yourself properly'. In addition the leaked source seems to be the direct cause of the MtGox compromise leading to a further loss of USD $350K of customer funds. |
|
|
|
|
Actually I would prefer if this thread remains unlocked since all new Bitcoinica threads are being moved to Service Discussion where there is little visiblity/interaction.
Also it would be great if we can actually get the outcome of the 'security investigation' as that has been going on for over 3 months now. (Not that I am holding my breath).
|
|
|
|
please contribute relevant information: how is the status of the fiat money return?
Doing that. Finishing by next week. Zhou, the week is coming to an end. What is the status regarding the return of stolen funds? |
|
|
|
From the Summons: NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information below.
You have 30 CALENDAR DAYS after the summons and legal papers are served on you to file a written response at this court and have a copy served on the plaintiff. A letter or phone call will not protect you. Is there a chance the Intersango guys might not respond within 30 days? If so, what would happen in this case? |
|
|
|
This is what the plaintiffs are asking for: 1) for the return of all monies in the accounts of Plaintiffs;
2) for all other general, special, incidental and consequential damages;
3) for attorney's fees, as alleged int the causes of action above;
4) for exemplary and punitive damages, as alleged int the causes of action above;
5) for prejudgment and post-judgement interest to the full extend permitted by law;
6) for costs of suit incurred by Plaintiffs herein; and
7) for such other and further relief as the Court may deem just and proper So basically 100% reimbursement + reimbursement of all legal costs + interest + damages + other relief Since the plaintiffs represent only 4 out of the approx. 5000 Customers. How will this affect the other claimants if they are successful? We can't win other customers' deposits. It's our expectation that a receiver will take over and distribute the claims and we'll get our cut of that, and anything we're short will have to come from the people found responsible.
So this lawsuit should not affect the pro-rata reimbursement of depositors? I certainly hope so, as I am really starting to feel like a financial rape victim here. |
|
|
|
|
Hey Bruno, you have been doing a lot of useful investigation here but sometimes it feels like you are barking up the wrong tree (no pun intended). To me it seems like Patrick Murck is one of the good guys...
Have you found out anything about this Chen Jianhai guy? Is he real? What is his webshop etc? It might be hard to investigate since he probably writes mostly in Chinese. But a millionaire relic collector must leave some footprints on the Internets no?
|
|
|
|
I'm not sure if this is the right place to post this, but is anyone able to see their claim page anymore? Mine appears to be gone.
While I am very concerned about getting the money secured and ready to be paid out, I'm even more concerned about how they will determine who gets paid.
Do we know who will be responsible for paying once the money is freed up? Will this person be able to access our claims from bitcoinica (if they still exist)?
I've been following the forums since May, but have not had an account until recently. I'm afraid that the less vocal people will be overlooked when the time comes to start paying again. Or maybe my hopes are too high and everyone has given up on seeing our money again...
The personal claims pages disappeared a while ago (2+ weeks ago). No explanation why though, perhaps as a parting middle finger to customers from the Bitclown Consultancy. I really hope that the reimbursement db is safe & secure (Including data on any repayments already made before the MtGox compromise.) Personally, I certainly have not given up on seeing my money again. Tihan is putting Bitcoinica in receivership and then liquidation, all proceeds from the liquidation will go towards reimbursing customers afaik. |
|
|
|
|
Show Posts
