Copy and pasted from this locked thread.
https://bitcointalk.org/index.php?topic=101098.0"I was involved with Alberto on Bitcoin Rebate and Kronos, and worked with ludvig(DeaDTerra) and others to raising bitcoin for both projects on the basis of a 50/50 ownership. Based on everything I was told (and believed), both myself and others believed that it (Rebate) was a viable project. If I could go back and do it again, I would *not* have had any involvement with Alberto.
Right after Bitcoinica shut down, Alberto informed me that he had been working on the beginnings of a margin trading platform. Given that I was looking for opportunities to leverage the ZipConf back end for instant deposits into exchanges, a perfect fit for margin trading / multi market hedging purposes, I actively started working with Alberto to pursue ZipConf integration, and a multi market orderbook for the Kronos project.
After Kronos went live, Alberto decided of his own accord that he would go against Eric, Matthew and my development protocols, and he left the withdrawal page wide open and vulnerable to a scripting attack, without *any* protections or manual verification requirements in place for withdrawals from the hot wallet which he controlled. Alberto also went against protocol and handed out invitations outside of the scope of the defined invitation list for early testers.
As one might expect (hindsight is 20/20), Kronos experienced a massive hack via what ended up being a wide open withdrawal page, and thus ended the Kronos project, and any and all involvement with Alberto and my group.
This staggering loss threw a monkey wrench into further development efforts. When I heard that Alberto was pursuing funding for BDT over a month later, I told the people I heard were involved with helping him the entire back story, and did my best to warn them off helping in any way shape or form. Nobody listened.
I also informed Alberto that I would continue to do my best to block him at every turn, and further demanded that he complete the code base for the Bitcoin Rebate project, and deliver it to my designated 3rd party for audit. Alberto finally agreed after some tense words, and and yet in the end, it's still simply standing still. The initial raise on Rebate was on equity rather than Bond, because it was expected that the development and user growth path may take some time, and would require more organic growth than with something like margin trading, which everyone was already familiar with.
To be clear: I believe (along with others) that the loss sustained was Alberto's doing (Bit day trade). He's not as clever as he thinks he is, and though I cannot prove beyond a shadow of a doubt that he was the thief, I do not for a second believe that Alberto is blameless. Not even a little bit.
The loss experienced was a crushing blow to the team, and if we could all go back and do it again, we wouldn't. We were trying to rush to market to fill a vacuum, and we didn't have a solid security plan in place to deal with these types of problems. I am to blame for trusting Alberto, and for the lack of oversight and necessary precautions. Sometimes opportunity presents itself, and we make terrible, stupid mistakes in our rush to push things out into the marketplace.
I'm working diligently on closing out both Rebate and ZIP.A on GLBSE. I have had nothing but good intentions, yet the end result is that my experience so far has been terrible.
The constant and nagging anxiety of knowing I might let people in the community down because of everything that has happened has severely affected my well being, and has haunted me ever since the day that Kronos was "hacked."
The realization that I had gotten in to bed with a criminally minded guy, leaves me to only blame myself. Nothing changes the fact that I am ultimately responsible to the people who have been in my support. What's worse is that *very few* real world investors want to touch anything Bitcoin related with a ten foot pool. If you have to ask yourself why, take a look at the current price. Look at the ponzis (Pirate), look at the most robust markets and ask yourself "If I was an investor, would I put any faith or money into Bitcoin businesses?"
For 99% of investors who could make Bitcoin happen, the answer is a resounding "NO."
After the hack on Kronos, the developers on ZipConf got spooked, and changed their stance on the viability of a public instant confirmation service, and they changed their stance on operating it publicly. In other words, while the tools and back end have been built to support multiple exchanges through ZipConf, and the technology is solid (and is being audited by a 3rd party as soon as next week), the people involved changed their stance considerably after the Kronos hack; They got spooked, and their feelings regarding risk tolerance turned a slight apprehension of untested technology and theoreticals into a firm stance that they would not operate publicly, and possibly at all, even privately through trusted exchanges and members.
I'm actively seeking the assistance of a few friends and past associates to raise the money needed to retire the BitcoinRebate debacle, and hopefully also retire ZIP.A obligations based on the current negotiations (code audit is first). Since Alberto (Bit Day Trade) has no assets remaining, or intent to pay, I am on the hook entirely to retire all GLBSE obligations. I accept this, and I may have to sell my good kidney to make that happen.
In the meantime, I've been working hard to make a real world retail digital currency exchange happen in San Francisco, which would be a prime customer of the Ringcoin and associated tech.
To everyone who's affected: I'm incredibly embarrassed, and I'm deeply sorry. I still have hope for the future. I can't be certain that it will work out for the best, but I'm going to continue to try until my last breath.
Feel free to call me if you’re a shareholder in either Rebate or Zip.A and have any questions.
Jonathan Ryan Owens
760-420-3577
https://bitcointalk.org/index.php?topic=83784.0https://bitcointalk.org/index.php?topic=79110.0"
Just want this to not be edited. Thanks
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