Customer assets are customer assets.  It doesn't matter if they are dollars, bitcoins or bananas.  If BitFloor does not have reserves (and that was reported in OP) or any other way to make customers whole, then this is a bankruptcy case.  This exchange is operating in the U.S., there are very specific laws as to how to proceed.

Disbursing funds to some customers and not others would be a criminal act under those.

I believe a court order (injunction) should be filed to help ensure the exchange operator proceeds as prescribed by law.

Doesn't work that way in the U.S.

A quick search and I couldn't find the exact description about how customer funds are pooled (giving a net balance), regardless if the account had a balance of securities or cash, then disbursed. 

Here's from Canada, which is pretty much the same in the U.S.

tomorrow we should see the explosion:

funny thread!

Got offers with total of 11 bars sold.
four left.

Pirate:  My BS&T has defaulted, please send me PPT user lists to allow a fair and safer wind-down.

payb.tc: Huh?  What does "default" mean?  I won't accept it!  I insist nothing change, and refuse to pass through to pirate any helpful information.  Default, schmefault!  La-la-la I can't hear you!

If they attack our infrastructure we attack theirs.  If they take down GLBSE we take down NYSE and NASDAQ.  We can make battle cries that will really be heard around the world.

Roman is trying to do the right thing, with all the information he has available. You guys with USD on the site, please be patient. You can see he tried to let you withdraw, but probably thought it better to make sure he wasn't doing anything illegal as Stephen kept reiterating. There's nothing shady about that. Hopefully he will continue with that soon.

Every dealing I've had with Roman has been both pleasant and very professional. His exchange was by far the best Bitcoin exchange we currently have available to us. I never left holdings there, I just bought and withdrew, so I don't have an immediate financial stake in what happens next. But I implore those of you that are owed USD and BTC to give him chance to settle things in such a way that won't destroy his exchange. Selling securities is one option that could solve this. 24k BTC is a lot but it's not an unrecoverable amount.

How poorly things go from here on out will depend on more than just Roman. Please consider your demands and actions carefully.

That is bullshit. I have a lot of money held up in this MISTAKE. I am trying really hard not to be one of the bad buys but it is a lot of money In my eyes that is.

Also I TRUST BITCOIN. Just the coin.

Not sure where people get the idea that bitfloor "can't" repay USD account holders.

http://en.wikipedia.org/wiki/Fraudulent_conveyance


Given that both Bitcoin and USD creditors "could" sue bitfloor and considering the relatively likelihood of each lawsuit and the relative likelihood of being successful the prudent thing for bitfloor to do would be to repay those creditors who essentially have an open and shut case when it comes to a lawsuit. 

These are all things for the legal council (and if it goes to U.S. court, the judge) to decide in order to figure out what actions are appropriate. That's where the "due process of law" comes in. You're entitled to your process, BitFloor is entitled to theirs. BitFloor seeking legal council is where he ensures that he is acting in a way most within the law. Your process would be serving BitFloor and/or suing them.

Things are not that simple that withdrawals can happen just for the solvent parts of the business held; welcome to the world of BitCoin, where everything is without absolute legal precedent (yet). If a legal precedent can be set that the BTC has value, it would be illegal for them to use any portion of the assets (including remaining balances held for what wasn't hacked) to pay out to anybody until the appropriate process on reimbursing has been determined in court.

This WILL not be a quick process. The only quick process would be if the coins were returned by the hacker, or if someone invested BTC in BitFloor in exchange for ownership (or a portion of). I'd imagine this case (albeit not a likely one) is the one that BitFloor is hoping for the most.

Best case for USD holders (and worst case for BTC holders) is that his legal council (or the court system) determines that BTC will be considered "worthless" and that USD should be distributed to account holders as it's the only part of BitFloor that needs to be legally held solvent. However, I can just about guarantee that if this happens, anyone holding a large amount of BTC will file an injunction and appeal, which will almost certainly prevent payout of USD funds from happening quickly.

Hang on folks, this is likely to be an interesting one, especially since it's occurring in the oh-so-litigious US.

US insolvency requirements are "due process of law".  It's up to those who don't believe that US insolvency law should be applied in this case to petition the court with on point arguments and case law supporting that assertion - the cost of defending against any such actions will come out of the bankrupt estate.  Unless USD holders can establish that they're secured or preferential creditors as defined by US insolvency law, there are no legal grounds on which they can be paid in full in preference to other unsecured creditors without the agreement of those other creditors.

So last week I deposited about $1000 in bitfloor and hadn't even yet made a single trade with it. While it was extra savings money and I can survive without it, I am quite upset about not being able to pull my money out....

I understand your frustration, but your anger will not help anything here.

Actually, that clause is exactly the problem.  Until due process of law, it is not legally clear whether any of the USD controlled by bitfloor is the property of those who had BTC on deposit, the property of bitfloor, or solely the property of those who have USD on deposit with bitfloor.  Bitfloor therefore cannot legally give USD to anyone until due process determines exactly whose property each and every $0.01 is.

Unfortunately for those of us who had significant USD balances at Bitfloor, what others are saying is correct: Roman must now cease all activity — even activity that many of us would consider "the right thing to do" — and seek legal counsel. Assuming everything is handled sanely in the court system (a big assumption), we might expect a refund of our USD balances in a few months — either all or in part, depending on whether the balances were legally segregated and allocated, which I doubt they were.