Progress to date: I now have an email address for a lawyer.
And Gorgio has posted this:
http://bitmine.ch/present-future-bitmine/

He is basically asking (or playing) for more time, and hoping to become a mining company.
(Where have I heard that before?)

Elsewhere, it seems that Bitmine's Swiss customers are hoping to get refunded before
offering assistance to those based outside their country.

Interest in joint legal action is in single figures, probably hoping that someone else will
bear the costs, time and stress, in the hope that there will be something left for them
to pick up after this is all over. Maybe they can just write Bitmine off as a tax loss or
something.

I would prefer to have a couple of addresses for lawyers, just to compare their resume,
hence if you have a contact, feel free to PM me. 

@gpufreak

Could you maybe add a web page to track bitmine's addresses?

I have seen some posts on that subject. It may come in handy to have a
place on the web where the data can be accessed. 

copy and paste from the official thread:

and I've sent them this email, feel free to copy paste for your own use. Will come handy in the case of a class-action suit.

==============
This is a Legal Notice to

Bitmine AG
Centro la Monda 2 6528
Camorino
Switzerland

On [Order Date Here] order #[Order Number Here] was placed on your website (bitmine.ch), and was paid and confirmed by [Order Confirm Date Here].

The terms of contract clearly stated that this device was to be delivered within 70 Days of late shipment or else a full refund may be requested by the
customer. The date of shipment was then confirmed to be December 16, 2013[Replace with your guaranteed shipping date].

Making the first possible day to request a refund Tuesday February 25, 2014[Replace with your guaranteed refund date].

A refund was then requested on [Refund Request Date] and confirmed by your staff on [Refund Confirm Date].

According to the details of the agreement signed, Bitmine AG agrees to refund the customer in full with an additional 10% penalty on top of the total order value within 30 working days of confirmation of refund request contract.

It has now been [XX] working days since confirmation of refund request and Bitmine AG is in breach of contract and the refund has not been paid in the timeline agreed.

Bitmine AG is hereby given notice to immediately refund order #[Order Number Here] given breaches on following articles of the Swiss Criminal Code,

Section 311. Art. 170
Section 311. Art. 151
Section 311. Art. 138
Section 311. Art. 141-BIS

And,

on the Federal Act on the Amendment of the Swiss Civil Code

Title 11, Art. 366

I hereby attest that all the above is true,approximated to the best of my knowledge, under penalty of perjury.

Regards,

[Your Full Legal Name Here]

Maybe do a comparison of Bitcoin vs Dogecoin?

Perhaps something as simple as price variation over time?

I'm hilighting Dogecoin because the imho the change in the econmics is interesting.

If anyone has

a) web links on how to apply through the local court for civil action and

b) the names and contact details of say, three lawyers from Camorino or
somewhere close by that might take on the work. I doubt that this will be
a difficult case but it would help if one was familiar with and supportive of
cryptocurrencies.

Please PM me with these, if you prefer not to have your name on the thread.

The police responsible for the Camorino Canton of Switzerland
are 'Polizia cantonale Camorino' and can be reached here :
polizia@polca.ti.ch

Correspondence needs to be in the Italian language.

At the moment, they are still wondering why they should be concerned.

I doubt they will take action unless civil legal action reveals that money
has disappeared or it is shown that Bitmine is trading while insolvent.

For those curious about legal action and police investigation, I suggest you visit
the unofficial thread.

For clarity I have no connection other than some correspondence with this site:
Check the Twitter feed of www.bitminerefund.com @ https://twitter.com/bitminerefund

I am happy to share any information that I have, and I *think* gpufreak is updating
his website to follow all legal proceedings.

It's said, "if it looks like a duck, walks like a duck and quacks like a duck, it's probably a duck"

To customers it does not matter if a Ponzi is by deliberate design or by incompetence, the
result is the same.

Here follows a brief look at Bitmine AG's business plan, beginning with their Terms of Sale:
http://bitmine.ch/online-terms-sale/

The terms were published in September 2013.

Note particularly this :
"4.5.3 After the 61st day of late shipment, you have the right to request a full refund and
we will pay you an additional penalty of 10% of the initial order amount, including shipping fees."

For the sake of arguement, if you placed an order with Bitmine with an expected delivery on
1st January 2014, and requested a refund on March 3rd, you should have a ten percent return on
your Investment on 2nd April.

The way Ponzi schemes work, the early investors get paid out handsomely.

Bitmine delivered some Desk units that may have been profitable investments, and refunded
some customers, the latest known repayments were on 21st May.
 
If you expected delivery of a Rig on 1st January, you will have watched as your expected
return on investment declined as Bitmine failed to complete their design and development
on time. At some point, the rational decision is to request a refund.

Bitmine's business plan is in two parts: a small engineering company, and a potentially
much larger "financial enterprise".  In September 2013 had Bitmine offered 20% per year
return on investments with the right to deliver mining equipment instead, most people
would run for the hills, but that is what you now see.

I suggest that there is a 99.999 percent probability that Bitmine will fail to make good on its
refunds because of that penalty. It is a contractual near certainty.

I am not a lawyer, but it seems to me that Bitmine's Refund Request Form seeks to negate
the normal rights and remedies available to their customers even those provided by their
Terms of Sale. I suggest that you seek legal advice before signing and returning it.

Bitmine will ask for a copy of your ID and your bank details as part of your refund request.
Before you sign, ask yourself, do I want to give my bank details and my identity documentation
in the hope that these people are only incompetent? That is perhaps the most worrying part
of all this.

I have never had a problem making a payment in bitcoin.

I can usually avoid payments online using fiat currencies, but when a friend asks and
says it would be really, really helpful, how to refuse?

But I'm away from the bank with my account, in fact in another country with a different
currency, but whatever, I planned for this and there is a local branch not too far away,
just in case anything goes wrong (this is an _International_ Bank and they have powers).

Just log in online, and make the payment with a plastic card, people do this all the time, right?

The login goes through, (only eight entries) and I begin entering all the "needed" bank
details and after a couple of corrections because the bank is kinda anal about these
things (and quite right too) (another six entries in all) I get to the card reader screen.

Only an idiot could get this wrong, right? That's why they only allow two attempts
before the window in the card reader says "card locked ring bank" ...
If you do this all the time, I suppose you learn quickly, because the downside is quite painful.

It starts with an international phone call to their 24 hour help line. ( Why doesn't bitcoin
have a 24 hour help line that takes international calls? Just asking ...)

The helpful guy cannot help, but the 24 hour webchat people should be able to fix my problem.

The webchat girl is very helpful. All I need to do is go to an ATM machine and use "pin services"
to reset my bank issued card and it's all good. Isn't bank technology wonderful?

I walk to the nearest ATM.

It is not working. I walk back. I need to drive to the next ATM, at the _International_
Bank that has powers just in case. My daughter's car is blocking mine. She is in the shower.
She yells at me but I get her keys and get on the road. I park, and try the nearest ATM.
It has "pin services" but will not allow me to reset my card. I walk to the _International_
Bank that has _powers_, and find that the powers do not include "pin services" ... probably
because I am in another country from where my account is based ...
 
I drive back. In the vague hope that somehow the "system" understood my plight and enabled
my card I try again and get the same message from the card reader.
I open up the web chat. Yes, they understand my frustration. Actually, I am
not frustrated, but whatever ... and they can help. After checking out some more details
all they need to do is to see me logged into my account. No problem, I log in. And they can
send me a new card in three or five days.

They cannot see me. I am electronically invisible. Hmmm ... maybe I could try clearing out the
vaults to see ... but if I cannot make a payment from my already open account ...
Online webchat girl is very apologetic, but the available options are soon exhausted. She suggests
the telephone service I began with two hours ago.

Well, three hours already gone of the 24 hour service, only another 21 to go.

"Hello .... How can I help?" I recite the story, (leaving out the bit about bitcoin.) And yes, he can help.
I just need to give him some numbers and letters. It seems that all is finally well, except that it may
be up to five days before I again have a working plastic card. But he can make the online payment for
me. Wonderful! Done! "enjoy the rest of your day!" "You too"

You see, that's where bitcoin is going wrong. It just works every time. And it dosn't worry if you
have a problem or say "Hello ... how can I help?" or "enjoy the rest of your day" There's definitely
room for improvement somewhere ;-)
 
  

It has become clear to me from the ongoing delays and the general lack of response from Bitmine,
that only legal action up to and including putting Bitmine into administration/bankruptcy will
motivate them to pay out.

I would welcome any advice from any Bitmine customers based in Switzerland on how to begin
proceedings - preferably without first getting the lawyers involved as that can come later
when Bitmine continues to fail to pay out.

There are plenty of potential others to join an action :

Check the Twitter feed of www.bitminerefund.com @ https://twitter.com/bitminerefund

Somebody just has to take the first step.

ZeroHedge.com has a thread on the Willy Report with full details and a link to the (then missing) Wordpress page.

There is an interesting comment from Ian Green tracing the movements of 1.200,000 BTC

quote

“If you take a look at THIS bitcoin wallet:-

https://blockchain.info/address/12Nxd2X12WZeYSjUcbtm5NpS3d81Yh8sKh

You will see about 120 payments (the red arrows) of 0.000777 bitcoins into other wallets.
Click on one
It
takes you into a wallet which had 10,000 bitcoins deposited in it
(usually on 6 Feb, the day before MTGOX disabled withdrawals, then
0.000777 BTC the next day (probably from a bitcoin wallet on an android
phone).

unquote

"Also, if they get more optimistic about the future of their share they can relax and stop hoarding to buy time."

The way I see it, when they failed to deliver my refund within the 30 days stated in _their_ terms and conditions
they broke _their contract. They should not assume that just because the conversion rate between US dollars
and BTC has changed in their favour that I will accept fewer BTC than was due on that date.

They are still digging that hole and it keeps getting deeper.

I am not a US taxpayer, and just speculating that it could happen to me.

If bitcoin is property, then presumably I paid for electricity and hardware in order
to obtain the goods, in a manner similar to the process of barter?

And that should be offset against the current value of the coins I mine? Otherwise
there would be no point in mining. IANAL BTW. 

Just an update on recovery of debt via the UK small claims court.
The sum involved has to be under £3000. You also have to have proof that
a) you have a contract with them for the amount you claim and b) that you
have written to them (Intersango) asking for your money back. 

If I have learned one thing, it is that the Law is not Justice, and Justice is not the Law.

"If customer funds aren't made available, they are liable to go to jail for embezzlement."

I will read up on that. Until now I'd assumed that only bitcoin was at risk here. 

I *think* that in the UK, if less than £500 is involved, there is a cheaper route through the
courts to recover money - IIRC for over £500 you need to go via the High Court. If nothing else,
it may stop the assets being seized by the crown. Something else to read up on.

"So I answered your 'confusion' but may I know why do you think Patrick's asset is not going to be hurt?"

I am thinking about the bankruptcy route for recovery of assets. On other threads the intention to pursue
all three founders of the company is discussed, and they may be successful. I have not seen any references
to case numbers, and until I see these, it is difficult to find out how far that has progressed.

So, back to the civil action route - IANAL BTW.

If these guys had any business sense, they should have gone public as soon as they knew the company was
insolvent, perhaps in June 2013 when the accounts were due. (I'm giving them the benefit of the doubt here)

At that time they might have avoided bankruptcy by offering the depositors say 40 cents on the dollar. Do not
take that literally! Now there may be nothing for us after due bills are paid, and the lawyers and accountants
get paid. The reason I say this is that they seem to be willing to let Intersango get delisted and have the assets
seized by the crown. The intersango business seems to be hosted in southern England, their bank account is in
Poland, and the people are in Spain, the USA, and Europe. I doubt there is anything worth seizing in the UK.

Intersango is a limited liability company. That means that not only are the personal assets of the directors
protected under law, but that they can use the assets of Intersango to pay for any legal action. Patrick may have
been Chairman, but he seems to have no right in law to direct the actions of the company (as would be the case
for a Director ie Amir).

The company has to file for bankruptcy as far as I can tell, and I have no knowledge of whether the company owes
a bank any money, or has any other financial obligations, so it is difficult to know how this would play out. I'm hoping
that the Intersango three still keeps an eye on these boards, because getting them to respond probably offers the
best hope of any recovery.   

 

Just to be clear, I will list the possibilities that I see:

1. Intersango does nothing, gets delisted, and all their assets become the property of the crown.

2. The creditors, including me, start bankruptcy proceedings.

3. Intersango somehow comes back online.

I do not see a criminal fraud investigation assisting in any way, for reasons stated below.

I see 2. as the most likely. Amir seems to be the only one whose assets might be directly at risk,
and even he is protected by the limitations on liability of the company. Put bluntly, unless there
are company assets to be seized, there is no point in starting bankruptcy proceedings.

There may or may not be assets in the form of money and BTC. I seemed to be one of a few
active traders, and had almost no euro and bitcoin in the lowish single figures in my account.
I seem to recall that at most 20 bitcoin were shown as available for purchase, so forgive me
if I seem skeptical regarding some of the claims made here.

Aside from those, the only visible assets are the site's software, probably totally dependent on
Amir to maintain, and the Intersango name and business model. The business model got broken
when the UK bank account got pulled, so a sale of the business is unlikely to net very much.

Looking at the last deposit I made with Intersango, if I was paid for my btc at that rate, I am
perhaps owed 25 euro. The current value of my bitcoins is perhaps x100 in round figures so
my recovery would depend on convincing the receiver/administrator that I have a case for the
higher figure. With no legal history, that may be difficult.

As for the possibility of success with a fraud investigation, I have yet to see a good case being made.
Begin with this definition: 'Obtaining money by deception'

Accepting, for the moment that bitcoin is money, where is the deception?

I had a look at the printout from Companies House.

There were initially three shareholders, now only two: Patrick and Amir.
Each has one share, value one pound.

Amir is the sole director of the company.

The registered address is a shell, AFAICT.

Intersango is a Limited Company, and "[T]he directors shall be empowered (whether expressly or implicitly) to exercise in pursuance of its objects and powers all of the borrowing powers of the Company," ......

It appears that the directors, officers and auditors have the right of indemnity.

Hence suing the company is likely to enrich only the lawyers, IMHO.

Abbreviated balance sheet as at 30 June 2012 (latest BS)
Current assets £254680
Creditors £(£252,133)

Total net assets £2547

The latest document is dated 21/01/2014 and is a notice from Companies House advising that
unless cause is shown to the contrary, the company will be struck off on21/4/2014
NB: Upon dissolution all property and rights vested in, or held in trust for, the company are
deemed to be bona vacantia, and accordinly will belong to the crown.

Please do not shoot the messenger.




 

I just had a look at the websites of several popular cryptocurrency exchanges.

Bear in mind that these things are essentially, banks. Once you give them your bitcoin,
it is theirs, for all intents and purposes. You are their liability from that time on. The
crisis in MtGOX is not a bitcoin problem, but a manifestation of the problem that bitcoin
is trying to solve.

It takes a fair amount to shock me, but the statements on web pages to the effect that
we will "prepare and publish quarterly accounts" with the "we" being the exchanges, is
just stunning.

I can understand conventional banks running on COBOL having problems reconciling their
books every day, but they try to do it. The thought that cryptocurrency exchanges would
think that publishing information only every quarter, is comforting to their customers shows
a disconnect between what is needed, and what they demand from their customers via
KYC and other questioning.

I see no reason why daily information cannot be published, and would welcome the exchanges
views on that. Similarly, much of the information asked for by exchanges from customers is
valuable in itself. If the exchange gets hacked, and customer data is accessed, the loss of
privacy may be more costly than any bitcoin stolen.

Something worth thinking about: without privacy, there can be no private property.