Kraken Fund

[Shadow383]

Nice to know the private newsletter is getting some circulation and that Chaang took the time to read it.  Fortunately the PPT series retains value and I am committed to paying out on those even if it takes a little time.  I am less sure of the Tygrr bonds which are possibly worthless given the additional issue of liabilities without clarity of assets to back them.  I am also pleased I didn't take up Chaang's request to take over his PPT business on GLBSE although it might have been better for his investors if I had done so (but we'll never know).

Wait, so almost all the PPT operators tried to sell their operations to you when it became obvious the situation was unsustainable?

Like rats off a sinking ship 

[PatrickHarnett]

Nice to know the private newsletter is getting some circulation and that Chaang took the time to read it.  Fortunately the PPT series retains value and I am committed to paying out on those even if it takes a little time.  I am less sure of the Tygrr bonds which are possibly worthless given the additional issue of liabilities without clarity of assets to back them.  I am also pleased I didn't take up Chaang's request to take over his PPT business on GLBSE although it might have been better for his investors if I had done so (but we'll never know).

Wait, so almost all the PPT operators tried to sell their operations to you when it became obvious the situation was unsustainable?

Like rats off a sinking ship 

You mis-typify the PPT.x situation.  Collectively as a group (six of us) there were discussions around how to make it profitable and provide a good return to investors.  One of the things, because of its structure, was that it was quite small compared to the other passthroughs (12k vs 25k for a "trust" account and 150k that Payb.tc was assumed to have).  I didn't agree with some of the suggestions being made and thought they would be too far away from what the contracts allowed.  I could also see a use for the asset and liked how it runs, so I negotiated with the other five holders to purchase their stakes in the business.  Then BS&T closed and things were rather screwed up as I looked after the obligations at the time, and continue to do so.

Other than Chaang, I did not have anyone else ask me to take over their PPTs, but I did have a few people ask if they could operate sub accounts (three people), and the recovery efforts I'm taking aims to have them repaid as well.  Nothing particularly complicated.

[totaleclipseofthebank]

Wait, so almost all the PPT operators tried to sell their operations to you when it became obvious the situation was unsustainable?

Like rats off a sinking ship 

Or he could be buying low and end up with a huge profit when pirate repays...

are you going to divide up your pound of flesh equally among pass-thru holder?

lol

[PatrickHarnett]

I didn't think I had implied that - but certainly working on recovery is a sensible approach.  My contact with the man himself has been pretty limited (non existent the past week), not that I exchanged pm's with him very often.

I have a legal case running in Australia currently to recover funds from someone - so I know the cost and length of time it takes.  But otherwise, my approach is not a public one as that is not how these processes work.

[PatrickHarnett]

I didn't think I had implied that - but certainly working on recovery is a sensible approach.  My contact with the man himself has been pretty limited (non existent the past week), not that I exchanged pm's with him very often.

I have a legal case running in Australia currently to recover funds from someone - so I know the cost and length of time it takes.  But otherwise, my approach is not a public one as that is not how these processes work.

Okay, I wish you the best of luck. I really hope this gets resolved in a good way for all of us.

Thanks.

I was going to say I couldn't think of anyone that would disagree, but unfortunately, there are several people I can think of that want this to all end badly.

[Monster Tent]

So you placed the majority of funds raised into pirate debt based on the fact your idea of what he does as a business is full of shit and you dont even know the guy personally?

So what am I going to use funds for?  Some will be going into my "vulture" capital business interests, some into some long-term BTC investments I have held in real-life ventures (such as an equipment manufacturer), some in BTC assets, a small amount of futures trading, some into various risk/reward adjusted investments that are available in the bitcoin world.



I have  a bridge to sell you.

Edit: Do you actually contribute anything at all in real life besides flush peoples coins down the pirate toilet ?

[mobodick]

Since close to 5k of the funds are directly in pirate, how will this effect the profits if Pirate will not pay back?

That is incorrect.

In any event, there are steps to recover funds from BS&T.

The market is only valuing BS&T debt at ~3% of face value, so Kraken is essentially carrying a large amount of unrealized losses.

Patrick guarantees Kraken investors face value.

+1, patrick will take the hit himself if pirate takes us all to the cleaners.

Wait, you actually think there is still a possibility pirate will pay back?
AFAIK Pirate has taken his investors to the cleaners and they have insignificant amounts of chance of getting it back.

[BadBitcoin (James Sutton)]

Since close to 5k of the funds are directly in pirate, how will this effect the profits if Pirate will not pay back?

That is incorrect.

In any event, there are steps to recover funds from BS&T.

The market is only valuing BS&T debt at ~3% of face value, so Kraken is essentially carrying a large amount of unrealized losses.

Patrick guarantees Kraken investors face value.

+1, patrick will take the hit himself if pirate takes us all to the cleaners.

Wait, you actually think there is still a possibility pirate will pay back?
AFAIK Pirate has taken his investors to the cleaners and they have insignificant amounts of chance of getting it back.

no, I think that pirate is more easily sued than bitcoinica, however anything beyond that I don't care, its no major loss for me.

[puffn]

Wow, this was a great idea. Sell all your bad debt to investors whose returns you control. Use the funds you get to do whatever you want to earn money. Persue a case against pirate at 0 interest rate, and when you get some money out of him, get it in 1 lump sum. This way, you can make a hundred or so percent profit, and generously smooth it out to 4 2.5% interest payments while keeping 90% + accumulated interest for yourself.

[Bitcoin Oz]

Wow, this was a great idea. Sell all your bad debt to investors whose returns you control. Use the funds you get to do whatever you want to earn money. Peruse a case against pirate at 0 interest rate, and when you get some money out of him, get it in 1 lump sum. This way, you can make a hundred or so percent profit, and generously smooth it out to 4 2.5% interest payments while keeping 90% + accumulated interest for yourself.

Its pretty scammy to sell all your private pirate debt to investors since this fund wasnt advertised as a pirate passthrough. If the majority is invested in pirate Im gonna be pissed.

[BadBitcoin (James Sutton)]

any newsletter + token interest payment for the week to say that your still around patrick?

[PatrickHarnett]

Newsletter has just been sent, and about to do the payments for the week (0.4826%).

And, given the slots in the fund that were not taken up, considering reopening the fund to new members and not doing a Kraken#2.

[Bitcoin Oz]

People might be more confident in the glbse passthrough if there was the same face value guarantee or a bidwall just below IPO price.

Is bitcoin lending pretty much dead as a market segment now ?

[markm]

Is bitcoin lending pretty much dead as a market segment now ?

I suspect loaning them to yourself-on-some-service as collateral might be the new "thing" to take its place;

that is, instead of loaning your bitcoins, using them as collateral to borrow other things.

That way you need not lose out on the gains in value your bitcoins make while "using" them to invest in other things.

-MarkM-

[Bitcoin Oz]

Is bitcoin lending pretty much dead as a market segment now ?

I suspect loaning them to yourself-on-some-service as collateral might be the new "thing" to take its place;

that is, instead of loaning your bitcoins, using them as collateral to borrow other things.

That way you need not lose out on the gains in value your bitcoins make while "using" them to invest in other things.

-MarkM-

Sure. Someone could setup a service where you deposit bitcoins and can receive USD or other funny money and pay "normal" interest rates on that. Much better than trying to borrow bitcoins at insane rates plus if they default you have their bitcoins 

[PatrickHarnett]

Is bitcoin lending pretty much dead as a market segment now ?

I suspect loaning them to yourself-on-some-service as collateral might be the new "thing" to take its place;

that is, instead of loaning your bitcoins, using them as collateral to borrow other things.

That way you need not lose out on the gains in value your bitcoins make while "using" them to invest in other things.

-MarkM-

Sure. Someone could setup a service where you deposit bitcoins and can receive USD or other funny money and pay "normal" interest rates on that. Much better than trying to borrow bitcoins at insane rates plus if they default you have their bitcoins 

The lending segment isn't completely dead, but there is a group of people that have tried their best to kill it off because their opinion is everyone is dishonest.  I know a couple of people still doing lending, and I still get requests to finance various things.

(and seeing this post explains the question about BTC/USD collateral I've just sent a reply to.  In essence, if someone wants to deal in a real currency, make sure you have the right financial licenses/structure/compliance because that is an area where regulations do apply.)

[PatrickHarnett]

Weekly returns paid (0.4688% for the week).

[Bitcoin Oz]

Weekly returns paid (0.4688% for the week).

Did you use the Kraken IPO to simply offload your personal pirate debt onto new investors and what percentage of funds raised are exposed to toxic debt?

[Scott J]

Weekly returns paid (0.4688% for the week).

Did you use the Kraken IPO to simply offload your personal pirate debt onto new investors and what percentage of funds raised are exposed to toxic debt?

Invested funds are backed by Patrick, so this would not be a way for him to shift pirate debt to other people. If the Kraken fund were to buy up Pirate debt and makes a loss from it, Patrick would still have to pay out.

Please read the thread properly before posting.

[PatrickHarnett]

Weekly returns paid (0.4688% for the week).

Did you use the Kraken IPO to simply offload your personal pirate debt onto new investors and what percentage of funds raised are exposed to toxic debt?

No, there was no personal or pirate debt moved into Kraken.