You have a good point, there is a place for government in enforcing contracts but at the same time think about how many startups fail all the time in Silicon Valley, they lie and string their investors along all the time too. They even brag about it and the government does nothing. Maybe we should have insisted on personal contracts with Ken before investing with a plan for the company failure if it occurred. People were too optimistic when reading the prospectus and we never gave the shareholders an out in the prospectus that Ken would have had to adhere to.

http://www.wired.com/2014/04/no-exit/
Chris convened their meeting by saying, “We have 10 companies waiting to work with us, and we’re about to close a round of funding.” These statements weren’t strictly true, but one couldn’t hire engineers without projecting a sunlit-uplands future. As Chris had put it to me, “Lying your way along puts you in a bad place. But you do have to balance transparency with optimism.”

This sounds a lot like some of Ken's false claims.

I just think that if you are using Bitcoins the first move when things might not look good should not be to seek out government assistance to save your cash. You should work with the person you invested with to make the situation better. Ken really did bring this upon himself since many people here are novice investors and likely committed too much capital to this enterprise and when shares were not tradable for > 5 months I can understand getting the MSD involved but it really feels like shooting yourself in the foot to recover a minimal amount of your investment back by killing any chance the company could succeed. It wasn't big but it still existed. Now that has even been lessened to be an almost non existent chance.