Why I don't think Pirate will default

[dree12]

Disclaimer: I hold no financial interest in Pirate@40's endeavors, nor do I condone investing in shady 7% a week schemes.

I have personally retracted this statement.

I have recently been approached about my current position of Bitcoin Savings & Trust. While in the past I have remained fairly negative about BS&T, accusing the fantastical rewards as impossible and the entire business as a scam, with recent proceedings I have been forced to change my position. Although I refuse to accept that investors in BS&T have made a smart business decision, I am now forced to agree that the dice have turned their way and investors in BS&T will be receiving their full investments, plus interest, back.

Below is my rationale, point-by-point for structure.

• Trusted operator: Pirate@40, although I have previously discounted this fact, is well-trusted in the Bitcoin community. This is both a white and red flag, admittedly, as investors may not have participated if a non-trusted member formed BS&T
• Known operator: In similar vein, Pirate@40 is supposedly well-known among investors, having disclosed a factual name and picture. Admittedly, well-known Ponzi schemes have done the same; Bernie Madoff and Charles Ponzi not excepting. However, when the choice exists to be anonymous, Ponzi operators are likely to take it.
• Continued communication: In an environment like Bitcoin's now, and building upon experience from Madoff and Ponzi, a true Ponzi operator would likely choose to fly to an exotic country and cease communication. Pirate@40 has done neither.
• Payback: While all Ponzi operators have historically attempted payback when the operation is collapsing, the situation involving Pirate@40 is distinct in certain ways. The crucial difference here: Pirate@40 has closed the scheme himself. With the option of simply taking all the money and leaving, paying back a few investors is not constructive to his goals.
• Financial incentive: At this point, with many PPT bonds in free-fall, Pirate@40 himself has the option of purchasing a large amount and reducing his debt. This gives him a financial incentive to repay his lenders. Additionally, Pirate@40 runs a reportedly successful business in GPUMAX, profits from which would disappear if Pirate@40 chooses to vanish.

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[Coinoisseur]

FYI, Madoff didn't leave the country. Stanford tried, but it was such a rookie maneuver and so late in the game it screams a lack of planning. Problem a lot of these confidence men have is they start buying their own lies and hype.

[bitcoinBull]

You admit that your first and second points aren't very strong. The third doesn't tip the scales either (obviously, only full payouts will). So I'll respond to the fourth and fifth.

• Payback: While all Ponzi operators have historically attempted payback when the operation is collapsing, the situation involving Pirate@40 is distinct in certain ways. The crucial difference here: Pirate@40 has closed the scheme himself. With the option of simply taking all the money and leaving, paying back a few investors is not constructive to his goals.

He admitted that he was forced to close the scheme (aka collapse) because of too many withdrawals.

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.  In a perfect world this would allow me to hold more coins in reserve outside the system, but instead it only exponentially increased the amount of withdrawals overnight causing mass panic from many of my lenders.

• Financial incentive: At this point, with many PPT bonds in free-fall, Pirate@40 himself has the option of purchasing a large amount and reducing his debt. This gives him a financial incentive to repay his lenders. Additionally, Pirate@40 runs a reportedly successful business in GPUMAX, profits from which would disappear if Pirate@40 chooses to vanish.

The spreads on the PPT bonds are enormous, so there is not much trading going on at the quoted bid prices. So no, that is not really an option for him (because there aren't enough lenders aren't willing to take a big haircut, at least not yet).

GPUMax is only reportedly successful. Looking through the thread, there are many complaints of no bids for mining work. This reflects a lack of demand to pay a price premium for virgin/vanilla coin.

[Rassah]

FYI, the guy behind Ginko Financial was well known and respected among the finance crowd, people knew his name and the country he lived in, and after the crash he stayed around, kept in contact, tried to reassure people, and did everything he could to get people's money back. Some people were paid back, but most could not. Pirate even admitted himself that he had to close and liquidate because it was getting unsustainable (he mentioned a bunch of pulling out when he announced lowering interest, which was essentially a run on his bank).
As for financial incentives, IF he still has it (and it was't given out as interest over the year), he has 500,000BTC. What more does one want?

By the way, I totally understand how the really sad, depressing, zombie-like state of shock, denial, and stress with all of this feels like. Been there, done that, really sorry for you guys, and totally hope I am wrong.

[benjamindees]

Not very convincing imo.

[CoinCidental]

the op reads like: if it were a ponzi pirate would have flew to some exotic country

Does anyone know 100%  pirate is still in texas or even in the united states ?

he could be anywhere by now if he so choose with about 5+ million  $ worth of asets

[mem]

TL;DR = I has money invested and dont want to consider the alternative.

[Carlton Banks]

The most significant assumption here is that pirate's endgame is actually rational (from either his or anyone elses perspective)

[Grinder]

I agree. The only thing that counts against him is that 4 days after he claimed he would start paying people only one guy claims to have seen a petty 100 BTC, but of course that's not important compared to the points you've listed.

[unclescrooge]

Disclaimer: I hold no financial interest in Pirate@40's endeavors, nor do I condone investing in shady 7% a week schemes.

I have recently been approached about my current position of Bitcoin Savings & Trust. While in the past I have remained fairly negative about BS&T, accusing the fantastical rewards as impossible and the entire business as a scam, with recent proceedings I have been forced to change my position. Although I refuse to accept that investors in BS&T have made a smart business decision, I am now forced to agree that the dice have turned their way and investors in BS&T will be receiving their full investments, plus interest, back.

Below is my rationale, point-by-point for structure.

• Trusted operator: Pirate@40, although I have previously discounted this fact, is well-trusted in the Bitcoin community. This is both a white and red flag, admittedly, as investors may not have participated if a non-trusted member formed BS&T
• Known operator: In similar vein, Pirate@40 is supposedly well-known among investors, having disclosed a factual name and picture. Admittedly, well-known Ponzi schemes have done the same; Bernie Madoff and Charles Ponzi not excepting. However, when the choice exists to be anonymous, Ponzi operators are likely to take it.
• Continued communication: In an environment like Bitcoin's now, and building upon experience from Madoff and Ponzi, a true Ponzi operator would likely choose to fly to an exotic country and cease communication. Pirate@40 has done neither.
• Payback: While all Ponzi operators have historically attempted payback when the operation is collapsing, the situation involving Pirate@40 is distinct in certain ways. The crucial difference here: Pirate@40 has closed the scheme himself. With the option of simply taking all the money and leaving, paying back a few investors is not constructive to his goals.
• Financial incentive: At this point, with many PPT bonds in free-fall, Pirate@40 himself has the option of purchasing a large amount and reducing his debt. This gives him a financial incentive to repay his lenders. Additionally, Pirate@40 runs a reportedly successful business in GPUMAX, profits from which would disappear if Pirate@40 chooses to vanish.

+1

And I'm sure that's why some are betting huge money that Pirate will pay back. He doesn't act as a scammer, at all. There would be no point in him staying around after having closed his operation if he were to scam people.

Anyway...

[muyuu]

Disclaimer: I hold no financial interest in Pirate@40's endeavors, nor do I condone investing in shady 7% a week schemes.

I have recently been approached about my current position of Bitcoin Savings & Trust. While in the past I have remained fairly negative about BS&T, accusing the fantastical rewards as impossible and the entire business as a scam, with recent proceedings I have been forced to change my position. Although I refuse to accept that investors in BS&T have made a smart business decision, I am now forced to agree that the dice have turned their way and investors in BS&T will be receiving their full investments, plus interest, back.

Below is my rationale, point-by-point for structure.

• Trusted operator: Pirate@40, although I have previously discounted this fact, is well-trusted in the Bitcoin community. This is both a white and red flag, admittedly, as investors may not have participated if a non-trusted member formed BS&T
• Known operator: In similar vein, Pirate@40 is supposedly well-known among investors, having disclosed a factual name and picture. Admittedly, well-known Ponzi schemes have done the same; Bernie Madoff and Charles Ponzi not excepting. However, when the choice exists to be anonymous, Ponzi operators are likely to take it.
• Continued communication: In an environment like Bitcoin's now, and building upon experience from Madoff and Ponzi, a true Ponzi operator would likely choose to fly to an exotic country and cease communication. Pirate@40 has done neither.
• Payback: While all Ponzi operators have historically attempted payback when the operation is collapsing, the situation involving Pirate@40 is distinct in certain ways. The crucial difference here: Pirate@40 has closed the scheme himself. With the option of simply taking all the money and leaving, paying back a few investors is not constructive to his goals.
• Financial incentive: At this point, with many PPT bonds in free-fall, Pirate@40 himself has the option of purchasing a large amount and reducing his debt. This gives him a financial incentive to repay his lenders. Additionally, Pirate@40 runs a reportedly successful business in GPUMAX, profits from which would disappear if Pirate@40 chooses to vanish.

I think it's more a Madoff than a Ponzi.

Failure to pay back doesn't need to be planned from the beginning to be very real. There is a fine line between risky gambling disguised as safe investment and actual machinated fraud. However profitable his "shady" operations may be, I'm willing to believe he won't be able to pay up. That's what the bet is about. There are many signs pointing to it.

- failed attempt to tank the market during last weekend.
- stupidly passive-aggressive behaviour. Denial.
- he paid a couple small accounts with coins from his mining operation.
- he won't come clean at this point, with neither proof of solvency nor information on this supposed assets (there are plausible explanations for this particular point, though).



I believe he thought he could pull it off. Thus, all the contradictions you mention against the "planned it from the beginning" theories. But numbers don't seem to add up and I'm in the "he won't be able to make it" camp.

I also think he's still trying and is under massive pressure. But worst comes to worst, will he pay up as much as he can and be a fraud + broke? or be just a fraud and run with a large share of the bounty?

[zebedee]

I think it's more a Madoff than a Ponzi.

Failure to pay back doesn't need to be planned from the beginning to be very real. There is a fine line between risky gambling disguised as safe investment and actual machinated fraud. However profitable his "shady" operations may be, I'm willing to believe he won't be able to pay up. That's what the bet is about. There are many signs pointing to it.

- failed attempt to tank the market during last weekend.
- stupidly passive-aggressive behaviour. Denial.
- he paid a couple small accounts with coins from his mining operation.
- he won't come clean at this point, with neither proof of solvency nor information on this supposed assets (there are plausible explanations for this particular point, though).



I believe he thought he could pull it off. Thus, all the contradictions you mention against the "planned it from the beginning" theories. But numbers don't seem to add up and I'm in the "he won't be able to make it" camp.

I also think he's still trying and is under massive pressure. But worst comes to worst, will he pay up as much as he can and be a fraud + broke? or be just a fraud and run with a large share of the bounty?

My counterthoughts:

- attempts to tank / control / whatever the market are a figment of the imagination of the posters / pirate power lovers.  There never is / was such an ability.  Yes he plays you like a fiddle.
- The evolution of the past week has IMO been almost purely for entertainment value, unexpectedly aided by MNW's thread, at least from where I'm sitting.  Further value that hangers-on might scoop up has lucratively derived from panic sellers.  One well-known low-life face in particular, who refuses to reveal an iota of personal identity, and whose behaviour is as shady and lacking in integrity as it comes, seems to have made out like a bandit.
- see prior point, prolongs the entertainment.  Feed the ducks.
- let's wait and see.

[unclescrooge]

 One well-known low-life face in particular, who refuses to reveal an iota of personal identity, and whose behaviour is as shady and lacking in integrity as it comes, seems to have made out like a bandit.

Whose that?

[mobodick]

Disclaimer: I hold no financial interest in Pirate@40's endeavors, nor do I condone investing in shady 7% a week schemes.

I have recently been approached about my current position of Bitcoin Savings & Trust. While in the past I have remained fairly negative about BS&T, accusing the fantastical rewards as impossible and the entire business as a scam, with recent proceedings I have been forced to change my position. Although I refuse to accept that investors in BS&T have made a smart business decision, I am now forced to agree that the dice have turned their way and investors in BS&T will be receiving their full investments, plus interest, back.

Below is my rationale, point-by-point for structure.

• Trusted operator: Pirate@40, although I have previously discounted this fact, is well-trusted in the Bitcoin community. This is both a white and red flag, admittedly, as investors may not have participated if a non-trusted member formed BS&T
• Known operator: In similar vein, Pirate@40 is supposedly well-known among investors, having disclosed a factual name and picture. Admittedly, well-known Ponzi schemes have done the same; Bernie Madoff and Charles Ponzi not excepting. However, when the choice exists to be anonymous, Ponzi operators are likely to take it.
• Continued communication: In an environment like Bitcoin's now, and building upon experience from Madoff and Ponzi, a true Ponzi operator would likely choose to fly to an exotic country and cease communication. Pirate@40 has done neither.
• Payback: While all Ponzi operators have historically attempted payback when the operation is collapsing, the situation involving Pirate@40 is distinct in certain ways. The crucial difference here: Pirate@40 has closed the scheme himself. With the option of simply taking all the money and leaving, paying back a few investors is not constructive to his goals.
• Financial incentive: At this point, with many PPT bonds in free-fall, Pirate@40 himself has the option of purchasing a large amount and reducing his debt. This gives him a financial incentive to repay his lenders. Additionally, Pirate@40 runs a reportedly successful business in GPUMAX, profits from which would disappear if Pirate@40 chooses to vanish.

+1

And I'm sure that's why some are betting huge money that Pirate will pay back. He doesn't act as a scammer, at all. There would be no point in him staying around after having closed his operation if he were to scam people.

Anyway...

He doesn't act like a scammer, but he does act as someone afraid of not being able to pay back.

[unclescrooge]

He doesn't act like a scammer, but he does act as someone afraid of not being able to pay back.

Maybe indeed.

[Raoul Duke]

 One well-known low-life face in particular, who refuses to reveal an iota of personal identity, and whose behaviour is as shady and lacking in integrity as it comes, seems to have made out like a bandit.

Whose that?

I think he's talking about payb.tc, for his stunt of replacing his own coins with coins from bitcoinmax users, thus transfering the risk to the investors and walking away with the bitcoins leaving everyone else to burn in case pirate doesn't pay.

[bitcoinBull]

He doesn't act like a scammer, but he does act as someone afraid of not being able to pay back.

Maybe indeed.

If he "acted like a scammer" then he never would've gotten this far. That's what separates con artists from petty thieves.

[Micon]

OP brings up a good point about Pirate reducing his debt by buying up all the PPT bonds at 5% of their value - but those bonds are unfortunately the tip of the iceberg.


There are a handful of non-market driven debts that he has:

-- The "trust accounts" or large personal investors.  I have heard rumors of 2x 25k BTC investors and many 5k btc.  
-- The BitcoinMax accounts - likely 100k+ BTC there


It's too massive for payback, and there is no Pirate funds being made "tanking the market then buying back"  and it's important to note that "arbitrage" would require a handful of Mt.Gox sized exchanges.

[softwareseller]

The BitcoinMax accounts - likely 100k+ BTC there

It's actually 150K+

[Bitcoin Oz]

 One well-known low-life face in particular, who refuses to reveal an iota of personal identity, and whose behaviour is as shady and lacking in integrity as it comes, seems to have made out like a bandit.

Whose that?

I think he's talking about payb.tc, for his stunt of replacing his own coins with coins from bitcoinmax users, thus transfering the risk to the investors and walking away with the bitcoins leaving everyone else to burn in case pirate doesn't pay.

 Essentially payb.tc still has all of his customers coins unless he invested them somewhere else and all he did was transfer the risk.