What is the background for this?

Well  since its a passthrough MPEX would need to send all their personal info to reclaim the shares.

Out of curiosity, how are you planning on handling the IRS reporting?  What 1099 are you going to file?  How are you handling the valuations?

Thus any dollar values you report on any 1099's are going to be inaccurate, and worse, could end up screwing your customers.  (eg, you report a value of $12, but when the customer exchanges it they exchange at $6)

Is your lawyer a tax attorney?

The funny part is he is claiming more clowns are lining up to buy him mining equipment!

Legal advice was obtained after GLBSE closed. Prior to that, assets were held by VPS. Any business conducted after that point would have to be subject to the proposed rules and personal information requests. I would expect this to include dividends generated during the interim, but for assets being held before then, such a retroactively applied stipulation becomes a bait-and-switch scenario.

At the moment and to my knowledge, no. Digital forensics is not a static field, though. There is always a possibility that links could be established beyond what Nefario has provided.

Yes and no. This again hinges on the circumstances before and after GLBSE closing.

Would it be possible to pay out in batches of value equivalent to less than $10-600?

Are there any further details on the automated system or a potential time-frame?

Can we use Driving License instead of ID.

P.S.
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PDF ?!

Giga, if Nefario released a "better" list as he JoelKatz describes would you still force us to give you all of our personal information? 

Also, since you seem intimately familiar with GLBSEs state, what exactly happened.  Who shut him down? Did those details ever really come to light?

In response to some of the questions and concerns raised by some members of the bitcoin/gigamining community to the information and documentation requested in the prior posting, Virtual Processing Solutions, LLC (hereinafter VPS), wished to provide the explanation and justification for these requests.

The information requested can be broadly divided into three principal categories:

• Bitcoin payment address.
• Identity information/documentation.
• Affidavit of beneficial assignment.

There does not generally appear to be much concern over the issue of bitcoin payment addresses.  This information has been requested to facilitate ultimate payment of the bitcoins and to allow reconciliation with known outstanding obligations.

Identity information/documentation seems to be among the most controversial of the requested information.  This information is necessary for VPS to obtain and maintain for a variety of reasons, including, but not limited to, compliance with tax regulations of the US and foreign jurisdictions (both for recipients and VPS), compliance with the regulations of the US Treasury Office of Foreign Asset Control, and protection against, and remediation in the event of, fraudulent claims.

When considering these requirements, please keep several points in mind.  The triggering threshold for US IRS 1099 (or IRS 1042 for foreign residents) earnings are extremely modest (ranging from US $10 to $600 depending on the classification ultimately assigned by taxing authorities) and the ultimate value of the bitcoins from now until the close of the filing period is unknown.  It is also worth noting that, due to the nature of the contract, these proceeds could be considered interest income which can have a triggering threshold as low as US $10.

A number of foreign locations are currently under embargo by the United States, ranging from full (in the case of Cuba and Sudan) to partial (including Iran, Burma, Syria, and North Korea).  In many cases the regulations prohibit the transfer of any negotiable or liquid commodities to target countries.  In all such cases, the law establishes the clear responsibility of the transferring party to maintain a compliance program which includes, at a minimum due diligence in establishing the identity of the recipient.  Criminal violations of the statutes carry a penalty of twelve years in prison and fines of US $1,000,000 in additional to independent civil penalties of $1,075,000 per count.  

The affidavit is to provide assurance that all submitted information is true and correct, and to provide protection for VPS against fraudulent claims of assignment. It is worth noting in this matter, that prior to the shut-down of GLBSE, VPS had not maintained independent records of contract assignment, nor do unique tracking numbers for individual contracts exist.  Under such circumstances, the potential for multiple parties to claim beneficial assignment of contracts is manifest, and GLBSE cannot be counted on to provide resolution of conflicting claims or indemnify VPS in the event that the wrong party is paid.  While VPS cannot speak to the cost of the foreign equivalence of notarization (apostille), in the US, such services are available free of charge to account holders at most major US banks, and are otherwise available for minimal (US $20 approx.) fees.

It is absolutely incorrect to assert that these information and documentation requests are to avoid VPS’s obligations under extant contracts, and, in fact, the information requested is no more detailed or onerous than what is generally required to open a brokerage or bank account.

Finally, some concern has been raised that VPS is attempting to change the terms of the original contract.  This is, in fact, precisely the opposite of both the intent and effect of the efforts VPS is undertaking in this matter.  Specifically, the original contract is extremely limited in its text and terms, leaving many issues unresolved, including, most basically, who is a party to the contract (i.e. the identity of the issuer and beneficial assignee).  These omissions alone could possibly cause the contract to be unenforceable, not merely on technical grounds, but because of the practical difficulties in establishing the parties to whom payment is due.  

Further, under US law, contracts are always subordinate to the law of the governing jurisdictions (i.e. where law and contract conflict, the law prevails).  To remedy this known issue, many contracts, include clauses to allow courts to redraw contracts to conform to existing laws to prevent their wholesale invalidation due to conflict with governing law (so called “blue pencil” authorization).  No such clause exists in the written contracts at issue.  Nevertheless, VPS has deliberately chosen to attempt, at its own substantial cost, to remedy both of these limitations in the existing contract, by allowing identification of the parties post de facto, and acting as though blue pencil clauses existed to bring the terms of the contract into compliance with US and State law.  Neither of these actions is explicitly required of VPS by law, nor in VPS’s proximate financial interest, but are nonetheless being undertaken to maintain good faith with the bitcoin/gigamining community.

The problem from the community is not that you've obtained legal counsel, it is that it's being applied retroactively. That is being viewed as a hostile action because it effectively freezes assets which were entrusted to VPS, regardless of the status of any contract.

Write it off. An opportunity for a clean start exists, but only if the legal advice is applied to VPS operations after the GLBSE shutdown.

The residual claims have to be let go, otherwise they will remain as a stigma for some time to come, and could cause potentially greater issues down the line.

The blockchain is an irrefutable record.

Do you want to deal with claims in the tens to hundreds or thousands of dollars range now, or wait and see if Bitcoin climbs in valuation until the claims are worth 7-figures or greater?

Best effort verification would allow for much of the assets held prior to GLBSE's failure to be cleaned out. If those asset holders wish to pursue continuing business, they can follow the new legal procedures to renew their investments.

What is the threshold, in fiat dollar terms, for paying out without requiring personal information?

Try to scam harder: in order to be "traded" on GLBSE, GLBSE must be operating.

So you can only refer to the price going when GLBSE was working. And now it is too late to ask for pseudo-legal b/s.

Maybe I should have phrased this differently, this is less about the public opinion than it's about the obligations from the old contract. If the old contract isn't continued they must be switched to a new contract (which requires bond owners permissions) or terminated. The old contract provides exactly one way to terminate bonds which is to buy them back. People who don't want to switch thereby must have the possibility to terminate their bonds through a buy-back. Refusing this possibility is scamming/theft.

The holder of this contract will receive as coupons a number of bitcoins equivalent to 100% PPS output of 5Mh/s for as long as they hold the contract. THE ISSUER has the right to buy back any contract at any time at a price equivalent to 105% of the highest price the bond was traded on GLBSE over the previous 15 days (360 hours).

Easy: just start paying back who is on the Nefario's list if you want be honest and consistent with your promise and past behavior. Who is not in the list, and say he should, can try his best to get things fixed with Nefario in order to get paid later, or just call the cops (the best option for everyone in this case imho). But using such cases as a pseudo-excuse to steal the assets of the most of your investors is just lame.

Not to speak about deleting the original contract from his opening post and try to negate the content of his OP later, or forcing his investors to commit crimes testifying officially falsities while shifting his personal responsibilities to a phony LLC, etc.

Anyway, it does not matter any more. No one can seriously expect to get anything back of their GLBSE investments beyond maybe some crumbs of single-digit percentage points in the most fortunate cases. Another lesson learned the hard way.

2) What I didn't know is that you also need the PII to comply to the law and thereby to run this thing legit.

I won't bitch now about the fact that this wasn't that important when gigamining started because I think it's your good right to stop exposing yourself to the risks involved by running this thing non legit.

In my opinion the only way to keep your name clean and make people happy is to comply with current contracts while going legit, and the only way to do this I can think of is to offer a buy back for those who don't want to participate under the new terms.
Yes I've read that there won't be a buy back but this had to be said.

Sadly yes as I'm not willing to participate in this under the new terms. Toilet pretty much.

Giga, thx for at least an answer.

I had read everything you wrote, I still don't see how this answers my questions.

So you decided to simply break the existing bond contract by changing the contract the way it pleasures you (request all kind of funny stuff and silently pass on liabilities to a LLC).

Virtual Processing Solutions, LLC is the business I have owned and operated by me, James Gibson, since July 20, 2011 to encompass all mining and business activities I have been a part of in the bitcoin community. These records are available via the Florida government websites and this business is in good standing with all local, state and federal agencies which govern it.

Also you claim this is to make sure to not pay the wrong guys (or to sue it back in case false claims are made), yet you ignore every kind of proof of ownership shown to you.

You could at least ask for additional claims with only email/btc address/bond amount (without making any guarantees yet), and look if the total amount of claimed bonds is higher than the actual bonds, and of course how many non unique claims there are. Then start from there. There probably still are cases where there's no better solution than requesting id's to scare of scammers but probably most wouldn't have to go through this hassle.

I've sent my emails to you directly, not Quentin.

This pretty much. 300 bonds down the toilet, awweesome  .

Note: Just out of curiosity, someone interested in buying the right to claim 300 bonds?

Finally, since no unique identification exists for outstanding agreements, ALL CURRENT BENEFICIAL ASSIGNEES ARE STRONGLY ADVISED NOT TO ENGAGE IN ANY TRANSFER, SALE, OR ASSIGNMENT OF THESE AGREEMENTS OUTSIDE OF GLBSE, AS IT MAY RENDER IT IMPOSSIBLE TO VERIFY AND SERVICE SUCH AGREEMENTS.

Giga, question: would you turn over all of your information to me if our situations were reversed?