... and crickets... :-P

Please put your flamethrowers away.  If this post offends you it is a per se admission that you are engaging in questionable (at best) if not illegal collusion/market fixing and your opinion is hence almost certainly superfluous and colored by a profit motive aka valueless for the purposes of a serious academic inquiry.

I have always considered myself a hard line capitalist and believe that free markets are not only the most efficient means to allocate scarce resources but also that any centralized regulation thereof is almost certain to create inefficiencies that render everyone involved worse off.  For example, I once got into a screaming argument with a professor at the law school I attended because I insisted that insider trading of publicly traded securities is useful and valuable to the market generally, that trying to regulate it is a fool's errand and hence a manifest waste of resources, and that if he didn't understand why that was the case he shouldn't be teaching (he is a prof emeritus with a PhD in economics from Harvard).  All that said, I have been going back and forth in my mind over the following premise and can't seem to come up with a firm conclusion.

Here is the situation.  Nicehash provides, as opposed to what I would call facially scammy alternatives, "cloud mining" services on demand.  In other words, one can with BTC (at quoted prices) instantaneously procure hashing power from the network provided by miners running black-box proprietary software distributed by Nicehash.  The business model - and I mean this in the most cloying way - would give Satan a hard-on.  In short they supply the software, run the web frontend and to a degree a mining brokerage backend (e.g. they facilitate one's ability to direct that power at third party stratums or solo mining nodes as designated by the lessee) and collect a commission from every.single.party involved.  They further make it difficult (if not impossible) to direct said hashing power at pools they do not endorse (you know, the ones they don't get a cut of) under the auspices that other pools are not "efficient" enough to work with their software.  This might be only half bullshit but to anyone paying attention it is conspicuously not "no bullshit" (unless we are to believe that all of the largest, best established, most profitable pools that are not in bed with the Nicehash peeps do not know how to run efficient [in technical terms] pools).  The miners using their software are not engaged in what I would call theoretically pure "mining" as their compensation is not in any way tied to the results of the work they perform except to the extent that someone else is willing to pay them for it.  I do not have access to enough data to perform a statistical analysis to say for certain but even considering the modest gains a miner would expect to earn from superior software the basic idea seems to be that the miners give up the opportunity to hit the crypto lottery and so exchange risk for more modest but consistent returns (not unlike pooled mining generally).  Seems totally fair and even desirable.

My issue is that in practice the Nicehash markets to not behave like rational markets and I am pretty sure I know why.  In a what seems like an almost constant broadside, automation will consume liquidity in a pool at prices that would be considered suicidal for someone with a profit motive.  There are situations, of course, where parties might have a legitimate/rational reason to lock up a significant percentage of the network hashing power and be willing to pay a premium for the privilege.  For instance, an arb with a cash flow issue that NEEDS to hit a benchmark to keep the whole system working.  That said, what I have experienced personally is a large quantity of orders at the minimum volume rocket from that minimum to a much higher percentage of the total purchasable power, above the ostensible market price, in a matter of milliseconds to wipe out any "lower price" (i.e. actual market price) orders to frustrate the purposes of those lessees.  This phenomenon is readily observable even to a troglodyte like myself because the parties fixing the market don't even deign to mask their efforts and will almost always have numerically connected order #s (they are placed simultaneously) and jump the fix by volume at THE SAME RANDOM VOLUME - say 104.32 16 orders in a row, among other methods.  The net effect is that the bots buy hashing power at a 10% or 20% premium for short periods of time, wipe out lower orders and force anyone wishing to lease the hashing power at profitable rates to take on all of the expense associated with swings in the number of miners/hashrate (they pay extra rewards to the miners) knowing that because of the nature of mining, disconnects and the like are very expensive.

So as far as I can tell the most likely explanation for this "irrational" market participation is that it is not irrational at all.  Meaning, some combination of Nicehash itself (actively or tacitly), a contingent of miners with a motivation to keep the prices artificially high knowing doing so is not costless, and other lessees attempting to stamp out competition by making it unprofitable for anyone trying to rent a material amount of the available hashrate, are the causes.  Fine, OK, I see whats going on there, good job.  But really to me that isn't nearly as interesting as the question of whether or not this market fixing is good, bad, or both and whether or not it should be tolerated or regulated.

Now that I have gotten to the beleaguered conclusion of this post I ask what your feelings are on this.  On the one hand, if this was a "real market" the mid-thirties, balding, SEC lawyer in the Enforcement Division with the rotund spouse who is going through an existential crisis in their Cleveland Park apartment (because DuPont and Logan Circle are just too overpriced to make sense) after realizing they paid a an order of magnitude too much for their second tier law degree WOULD HAVE A HOLIDAY on such egregious market fixing.  This calls into question the point of these markets in general and whether or not adoption by "normal" people really is the goal or even desirable at this juncture.  Assume for the sake of that analysis we all agree that decentralized markets are useful because that bald guy poking his finger into the pot screws everyone over but also that we understand why the government would, and perhaps even should, police abuses in securities available for purchase to the general public.  But then on the other hand, if we really do support a system that isn't beholden to a nanny regulator in chief do we have to accept as a cost therefor actual stealing on the part of miners/conspirators who are sold - both to the lessors and the lessee - as knowingly giving up part of an upside for consistency who work/conspire to end-around the whole system to increase their earnings (i.e. recovering that upside OR rent seeking) by utilizing superior technology to actively manipulate the market at everyone else's expense? Should it be enough that such behavior should drive innovation on the part of the actual consumer or are we simply looking the other way on fraud that is accomplished without breaking the letter of the rules but certainly with malintent nevertheless.  I am asking the community here at large because I genuinely do not know the answer to the question...

I marked the thread Solved as soon as you made good on my account - though you did entirely fail to compensate me for my time/effort/loss or even the transaction fees I incurred because of your software glitch.  That said, I never placed the negative trust on your account (or even know how to do so if I did have the authority so do which I'm pretty sure I do not) so I cannot resolve that issue for you.

As of 6:15 PM EST today; the hold has been removed.

Customer service apologized for the delay - three weeks time.

Thank you for all of your help.

Thank you for sharing.  I am happy that your problem has been resolved and that customer service responded to you.  They have not, yet, responded to me again nor resolved my issue, unfortunately.  I am going to wait another 24 hours or so because I am really trying to give them the benefit of the doubt and then I am going to start doing everything I can to protect other users in the United States from having the same experience as me. 

Thank you for the suggestion!

The reason this is so serious right now to me is because I just finished law school and will not start work until October.  That said, I have discussed options with friends and there are several potential remedies, though admittedly most of them will cost more than $2,000 even if I filed my own paperwork.  Here, the company has spent many thousands of dollars on development, branding, website, iOS, Android apps, etc.  I cannot see how it is worthwhile to snub me, be angry about the negative publicity, and simply do nothing.

In addition to reporting them basically everywhere, which I am certain a savvy tech company would be aware might happen (and hence has obfuscated their real identity) what they probably do not realize is that it is relatively easy and almost costless to get a TRO vs Apple and Google to stop pushing the app on their markets for consumer fraud purposes (assuming they do not provide an answer which would necessarily disclose their identity and allow for further potential legal action).  Also, because they have availed themselves of GoDaddyś private registration service they have brought themselves within the jurisdiction of the United States for both civil and criminal actions related to the website business.  There are punitive damages available in Nevada, 3X dispute for tort claims and accessory to fraud is criminal so they are uncapped.  

Further, there has been a crackdown in New York State on online fraud generally and draconian regulations on cryptocurrency specifically.  Absent some sort of diplomatic justification, I cannot see how they could both keep the website/brand they built and not answer in the U.S. on civil and criminal charges for this (FYI: grand larceny is a felony and in most states, $500-$1000 is enough to meet the threshold).

I guess what I am trying to get at here is not so much the eventuality that I might be able to resolve the situation with them (though I probably could not do so expediently without all of your help) but more so that I believe in this community and the ability to resolve disputes without judicial interference, otherwise lest the whole of this ecosystem is simply the next smartest thief.

I will get these funds back, as a matter of principle.  In two months time, though I may literally not have access to electricity or food and have to sleep on random sofas in the meantime I will be empowered to make their lives miserable.  Or rather, to force a choice to resolve my situation or abandon the website.  I do not want it to come that.  I just want recognition and resolution.  But I am willing to accept vindication if I continue to be taken as a fool.

I mean, I understand the lock - they needed a way to make sure the deficient balance was resolved and had I withdrawn the whole amount they would have been out BTC.  They also have an account here that has been otherwise in good standing and I have seen other threads where they have resolved users issues similar to this; in fact, I have not found a single thread on this forum where it was not eventually resolved.  However, I have seen it take 12 months and I simply cannot afford to wait for that. 

I do not think Cryptonator is an out-and-out scam and up to this point, I had been very pleased with their service.  I just do not know what else to do and was hoping that (as I have seen in the past) perhaps someone on this forum with a connection to them/respected member might take pity on me and try to speed up the process and get a response.

16 days - still no resolution and no response here or otherwise.  Is there anything else I can be doing to move this forward or am I simply SOL if they do not make it right?

... and crickets.  Time lock still in effect.  No contact from the website; no response to my help desk ticket.  Nothing.

Thank you for your assistance; I genuinely appreciate it.  To the extent my assertions could yet be considered an "accusation" please see the updated screenshots of the current state of affairs, with your post in the background.  I suppose I could pull the headers from the email reply to verify they actually came from a known Cryptonator address (and I will if necessary) but I wanted to say here that I have absolutely no reason to fabricate the situation.  I am not claiming that my fund were outright stolen nor that they were sent to the wrong address - hell, I have even agreed to cover the deficient ZEC balance created by their own software glitch - I simply want the lock on my funds removed and any charges I incurred because of this fiasco to be refunded.  I mean, I understand the purpose of a time lock for security purposes particularly in the situation where a user changes email addresses, forgets a password, or alters a deposit address, but please to be coming on here - ten years - this is absolutely ridiculous.

Further, it is difficulty to suss out any real information on the service at face value as the domain is privately registered so I doubt it would be possible to verify communications at least in my admittedly inchoate understanding of the interwebs (trace/host ends in the middle of Russia without more).

Email response to initial ticket:

 Cryptonator support (Cryptonator)

Aug 8, 22:16 CEST

Hello

Thanks for reaching out!

Due to a bug in the transaction processing script (already resolved) several transactions were mistakenly credited twice to your balance.

You can check this in your ACTIVITY

2017-08-07 12:06:41 | 66ae6d9845a98398df924de9256125d8d624f843c113a99f5f78285e7e356584 | 0.10297598 | zcash |
2017-08-07 12:59:39 | 972163c1cbf7993ae4eecd29fcad828a9bc71e5acf168c8b8b39576790ae0c5e | 0.14169800 | zcash |
2017-08-07 13:00:02 | 828035ec06871c61623b731dd1a91edda9e8d5d5df249c776b01c377a016dbf3 | 0.13672250 | zcash |
2017-08-07 13:00:12 | f902c35f39bf1c032b77d6b92a58c23c105f538b8f94e60584bcf6c076b75da2 | 0.39676905 | zcash |
2017-08-07 23:48:10 | 5c0e7673dc3f8252ab8914a88f17d9372712dfb20f98c1199ecc7188cb5f1730 | 0.13748669 | zcash |
2017-08-07 23:51:15 | 61354abe5c13cf7320cd7059748e2e51574ff2fe4d5cd6ce72329927db6cd2d1 | 0.01842916 | zcash |
2017-08-07 23:49:41 | a0892b85865c64735a1021cf060006cfc7bf81b41d8fec2ef5a1f47ce6139b1d | 0.12544960 | zcash |
2017-08-08 03:01:04 | 5f5d850158c62bb82ad700d71e53f29e0e867a934b4e0fc77d0d0dcbaf4892a3 | 0.15828749 | zcash |

We kindly ask you to deposit the total amount of 1.21781847 ZEC back to your Zcash account (via our internal exchange or via a deposit from an external address) so we could debit these mistakenly credited amounts and release the hold.

Please apologize for the inconvenience!

Here are my PMs attempting to solve the issue again:

URGENT Locked Funds: ******@yahoo.com
« Sent to: teamcryptonator on: August 11, 2017, 10:35:50 PM »
   Reply with quoteQuote ReplyReply Remove this messageDelete
!!! WARNING: This user is a newbie. If you are expecting a message from a more veteran member, then this is an imposter !!!
Hello.

Your website time locked my funds for 10 years after a software bug caused you to double credit some ZEC deposits to my account. I opened a support ticket #40108 to which a response came directing me to deposit or exchange funds to meet the amount of the double credits. I did so. I then replied twice more and received no response.

I opened another ticket #40330 two days later when I received no further response. My funds are still locked and I am VERY upset. Your software made a mistake which I am understanding of but you made zero effort to resolve my lock and have been holding roughly $2000 of my money hostage for a week. I want this problem resolved immediately and I want any transaction fees I incurred because of this bug refunded.

I have been, up to this point, very satisfied with your service and I am also aware of the negative publicity of having "SCAM" rumors spread around and how it costs you business which is why I am contacting you directly here instead of calling to public attention that your software bug locked up my crypto, at no fault of my own and you have not resolved the matter in four days time. Frankly, not having access to that crypto has cost me at least another half a BTC this week and I am becoming ever more perturbed as time goes on without a resolution. I get that your help desk is busy but this should've been a priority. Please solve this problem now so we can move beyond it amicably.

Feel free to PM me back here or email me at the account registered in the email attached to the helpdesk tickets referenced above.

Thank you in advance for your swift resolution of the situation you caused.

__________________________

And the second:

URGENT - TIME LOCKED FUNDS - PLEASE REPLY
« Sent to: teamcryptonator on: August 13, 2017, 05:03:55 PM »
   Reply with quoteQuote ReplyReply Remove this messageDelete
!!! WARNING: This user is a newbie. If you are expecting a message from a more veteran member, then this is an imposter !!!
Hello,

I see that you are online and wanted to follow up on my message from yesterday.  I understand that you have a policy of not disclosing information about your customers so for the sake of seeking a swift resolution please contact me here or via my email or just remove the lock.  I cannot express to you how upset I am nor the length I will go to seek a resolution to this issue.

Thank you.

The funds are being held hostage at no fault of my own.


Here is what could be accurately describe as a F-U timelock


Funds I converted to cover Cryptonator's mistake


Example of double credits


Again


Again, again.

"
What happened::
A Cryptonator "bug" time locked 0.53BTC for 10 years, they admit the bug and will not respond further nor release my funds.

Scammers Profile Link:
https://bitcointalk.org/index.php?action=profile;u=334380

Reference Link:
N/A

Amount Scammed:
0.53 BTC

Payment Method:
ZEC -> BTC (auto payment)

Proof of Payment:
See next post inline

PM/Chat Logs:
See email/message chain in next post

Additional Notes:

I setup a Cryptonator account to use for auto conversion of mining proceeds.  Everything was going smoothly for a few weeks until a "bug" caused their software to double credit my account for some ZEC deposits.  Without contacting me, they immediately time locked my account for ~10 years.  I reached out to customer service 8 days ago, they responded informing me of the bug and directing me to deposit/convert funds to cover the double credits.  I immediately did this, wrote back and informed them, respectfully requesting they release the lock and reimburse me for any fees.  Crickets.  Two days later I opened another ticket, no response.  Two days ago I sent a PM to their account here expressing my displeasure and pleading with them to resolve the issue to avoid me having to make a public post about it to get their attention.  Nothing.  I PMd them again yesterday (at a time when their account reflected they were online), unsurprisingly, I got no response and my funds are still locked.

Here is the thing, I know that others have falsely accused Cryptonator of being a scam and I did my due diligence on their service prior to depositing any funds there.  In my opinion, for the most part it is a legit service.  However, there have been many complaints about customer service and in this instance their inability and/or refusal to resolve this issue has resulted in a deprivation of my BTC - in theory FOR 10 YEARS - because their software had a bug.  I have  heard nightmare stories about it taking years to resolve issues with Cryptonator and I cannot wait that long.  I recently graduated with a ton of debt; I was mining/trading to try to get enough money together so that I can pay my electric bill until I begin working in October.  I NEED these funds and while a week might not sound like a lot having $2k which represents most of the money I have to my name unavailable in a time when I need it desperately is not only tantamount to a scam but actual cruelty.  

Please, any help anyone could provide, at all, would be greatly appreciated.