After much consideration, I’ve decided to close down Bitcoin Savings & Trust.
Why?
The decision was based on the general size and overall time required to manage the transactions. As the fund grew there were larger and larger coin movements which put strain on my reserve accounts and ultimately caused delays on withdraws and the inability to fund orders within my system. On the 14th I made a final attempt to relieve pressure off the system by reducing the rates I offered for deposits. #1 In a perfect world this would allow me to hold more coins in reserve outside the system, #2 but instead it only exponentially increased the amount of withdrawals overnight causing mass panic from many of my lenders.
So now what?
I’ve spoken with my #3 clients over the last week and come to an agreement that would allow me to close down my operation within a #4 week. #5 Currently my reserve (operating wallets) are drained from fulfilling the withdraw spree that happened after the rate drop announcement. All withdraws at this point will be delayed until Monday when the shutdown process begins..
At this point I will no longer accept deposits. Any coins sent into the system as of now will be returned immediately.
When will I get my coins?
#6 Starting Monday I’ll begin systematically closing and withdrawing accounts as coins are transferred. #7 I don't expect the entire process to last longer than a week. #8 The moment your account is closed you’ll receive your coins plus any interest accrued up to the hour it was sent.
Thanks
#9 I’d like to thank all of my lenders and PPT operators that were a key element in making Bitcoin Savings & Trust a success. #10 Bitcoin has grown a lot since I started this and want you to know that you were a vital part in helping it grow.
Now, I have a lot of work to do. Stay Tuned
-pirate
BTW, this is all bitlane’s fault. (j/k you nut)
1. This says that pirate doesn't keep 100% of the bitcoins in his "system". If this is the case, then the "offline" bitcoins are sitting in a wallet.dat file? I doubt this highly. Those bitcoins off the "system" are worth more to pirate doing something whether it is converting it to USD/other fiat or selling them to "clients".
2. Let me get this straight, the mass amount of withdrawals caused mass panic with investors. Hmm. Why would anyone need to panic if you're still paying them weekly interest? I still don't see many in a panic if people's withdrawal information is kept private. How would one investor know many other investors were withdrawing at the same time? Or is this public information that everyone just shouted "i'm withdrawing once interest rates drop"?
3. I still can't determine if clients and lenders are one in the same. Clients could be different people altogether. But what do they bring to the table? USD? Fiat? Possibly overpaying for bitcoins by more than 7% to give pirate some profit? If "clients" were buying bitcoins from pirate, it is likely pirate would have to offer a deal to buy them back from them at a price above what they paid for putting pirate at a loss in the deal given he is closing up BTCST.
4. Deadline from this statement is August 24th, Friday. One week from his OP.
5. The withdrawal rate announcement happened in July. This is at least 4 weeks later. So people were withdrawing their principal since then in "panic"? I find that hard to believe. One again he mentions his "operating wallets" are drained. This says he doesn't have access to the bitcoins that are outside of his "system". Otherwise a wallet.dat file with all the other bitcoins would be a simple file transfer to start refunding investors. This implies he doesn't have all the bitcoins in his possession as of this posting. Which arises the question WHO has the bitcoins? Is it mtgox? Is it some wealthy investors? Or is it in another form that pirate has say, USD, GBP, fiat?
6. He mentions here that accounts will be closed as "coins are transferred" meaning the coins are going to come from some place else other than his possession. This almost proves he doesn't have the coins of his investors, which I thought to believe was contrary.
7. This is his scapegoat comment in case the process takes longer than expected if anyone accuses him of being a scammer and not returning the coins in a timely manner.
8. He is prorating all accounts to the HOUR in terms of interest by his own words. I would expect that if any delays to occur all investors that get their coins after the announced week would get the original 7% interest compounded for each week in a prorated manner (not sure exactly how this would work).
9. He thanks his PPT operators (i.e. proxies) for being a key element in the success of BTCST. What I don't see here is what exactly PPTs really contributed but a way to cloud the transactions between the investors and pirate himself. All they did was gather new investors for pirate and get their bitcoins, send them to pirate, and then do some simple math weekly to get investors their interest payments. Perhaps he was thanking them for their "smoke-screening" help?
10. What part of bitcoin grew besides its price? Was there any new bitcoin development? Was there any new products and services (transparent) that was added to the bitcoin economy? I don't see what it added nor has it been shown except possibly in the price.
