Its Official Pirate Has Defaulted!!

[bpd]

Why hasn't this bet been decided yet? Seems pretty clear, no?

http://betsofbitco.in/item?id=433

[ArticMine]

except this debt was not denominated in USD. *shrug IANAL and I suspect we are lacking any that are familiar in this area in our community here*

Stephen got part of it right but got a huge part wrong.  He is right the interest won't survive in court; It is clearly usurious so that will be struck down quickly.  HE is also correct that courts will award damages in USD (legal tender).  That doesn't mean Pirate can pay the USD equivalent of when he borrowed.  He did borrow BTC (no different than borrowing gold, or say a stock). When paying in legal tender to satisfy a debt owed in other assets (gold, futures contracts, borrowed & shorted stock shares, BTC, etc) the courts would view anything other that repayment at current fair market value as insufficient to satisfy the debt.  Of course the debtor can accept a reduced payment but that is a different story.

So if I owe you 1 oz of gold I can satisfy that debt in dollars (even if you hate dollars).  This is often confusing to some people ("No you have to pay me in gold").  The reality is I can't be legally obligated to give you gold (more on why in the last paragraph), but I am obligated to pay a fair market value.  What is fair market value well that is open to interpretation but most likely the courts would see repayment at current spot price plus some margin to cover the replacement cost (coinage cost, shipping, etc) to be "fair".  I can't say "Here is one dollar.  It says good for all debts public and private so I no longer owe you that ounce of gold".

A more complex hypothetical example (item can't be replaced):
I borrow your motorcycle and total it.  Oops.  You sue me for loss of the vehicle.  The courts obviously can't make me return the totaled motorcycle back to you in the prior condition (i.e. rebuild it at the atomic level back into the pre-crash state).   The courts can't even make me give you another motorcycle.  The courts however can award DAMAGES for the VALUE of a motorcycle, and what form would those damages be expressed in?  Why legal tender of course.  So you bring in a bill of sale for a new replacement motorcycle and the bill of sale says $18,523.87 the courts could award you damages in that amount.  You could then use those funds to buy a new motorcycle or not.  The courts don't really care.  Courts only care about the VALUE of a loss and award damages based on the value.

How this would relate to Pirate:
First I don't think this is going to court but for the sake of the argument say a judge found that Pirate owed a plaintiff(s) x BTC.  A judge wouldn't award damages in BTC (it isn't legal tender).  Plus it creates all kind of difficulties the court doesn't really want to deal with.  Pirate "might" (snicker snicker) not have the BTC.   It might not be obtainable (maybe he owes more BTC than exist or are available for sale).  There may be technical or legal restrictions which prevent him from getting the BTC.  This is why in the US (and in US courts) the dollar is "good for all debts public & private".  A judge (hypothetically speaking) would award damages in USD based on the value of the compensatable loss.  As an example a judge could find Pirate owes 1,000 BTC and agree with the plaintiffs assertion that the current fair market value is currently ~$11 per BTC (no the judge isn't going to go tick by tick) and award $11,000.00 in damages, then levy a judgement for that amount against Pirate.

Now this doesn't mean all debt have to be settled in dollars.  If both parties agree to settle the $11,000.00 in BTC, LTC, gold doubloons, or even in metric tons of manure that is perfectly fine.  However if the parties can't reach an agreement as far as the courts is concerned the original terms, and assets, and contacts have been replaced with a $11,000.00 judgment in LEGAL TENDER.

One last wrinkle.  This means if for some reason (once again hypothetically and it is hard not to laugh when saying it) Pirate had ~$5M USD but didn't have the ~500K BTC.  He wouldn't have to buy the BTC.  He could pay your BTC debt in USD equivalent.  It actually would be smart to do so (no slippage or fees).   As long as he gave you a fair price (like spot price at time of repayment) creditors would have no recourse.  Why?  Your only (legal) recourse would be to sue him in court.  As discussed above even if you win the court is going to award damages in legal tender (USD).  

WHEW!

This is an excellent analysis. There is another wrinkle here. What if the debtor has publicly admitted to the manipulation of the market for the asset in which the debt was denominated?

[dishwara]

pirate40 default & Bitcoinica scam proved one thing.
that thing actually helps Bitcoin a lot.

In both scam, they can cleverly took a lot of bitcoiners money, but they cant able to hide.
The scamers are found out in less than 10 days, which normally wont happen in REAL world.

This proves the power of Bitcoin.
You can run, but you can't hide.

The information posted about both the Bitcoinica guys and pirate was known long before anything ever went wrong.  People have been posting about pirate's identity and his connections to other businesses for months and the identity of the Intersango guys was never a secret.

Mail addresses and phone numbers mean nothing - in fact they can be used to convince people you're still in a particular location after you're long gone.  Even real physical addresses mean nothing, people can (and do) disappear overnight all the time over much smaller debts than are involved here.  How traceable people are depends on how much they really want to avoid being found and how well they've planned in advance.

This has nothing to do with "the power of Bitcoin".  Playing internet detective and doxxing people is a favourite hobby of many online communities.

What you said is correct.
But it also means that scams cant be done easily in Bitcoin.
In real life you can even change your DNA to hide yourself.
But, if some one, wants to run a HYIP then they cant do it easily in Bitcoin.
Either he must be most advanced scammer/hacker to fool every single person in Bitcoin or get caught easily.
Any way this gives power to Bitcoin.
Bitcoin & this forum, makes Bitcoin scam proof for multi million dollar HYIP & businesses.

[Bitcoin Oz]

pirate40 default & Bitcoinica scam proved one thing.
that thing actually helps Bitcoin a lot.

In both scam, they can cleverly took a lot of bitcoiners money, but they cant able to hide.
The scamers are found out in less than 10 days, which normally wont happen in REAL world.

This proves the power of Bitcoin.
You can run, but you can't hide.

The information posted about both the Bitcoinica guys and pirate was known long before anything ever went wrong.  People have been posting about pirate's identity and his connections to other businesses for months and the identity of the Intersango guys was never a secret.

Mail addresses and phone numbers mean nothing - in fact they can be used to convince people you're still in a particular location after you're long gone.  Even real physical addresses mean nothing, people can (and do) disappear overnight all the time over much smaller debts than are involved here.  How traceable people are depends on how much they really want to avoid being found and how well they've planned in advance.

This has nothing to do with "the power of Bitcoin".  Playing internet detective and doxxing people is a favourite hobby of many online communities.

What you said is correct.
But it also means that scams cant be done easily in Bitcoin.
In real life you can even change your DNA to hide yourself.
But, if some one, wants to run a HYIP then they cant do it easily in Bitcoin.
Either he must be most advanced scammer/hacker to fool every single person in Bitcoin or get caught easily.
Any way this gives power to Bitcoin.
Bitcoin & this forum, makes Bitcoin scam proof for multi million dollar HYIP & businesses.

Nothing  has happened to any bitcoin scammers except them laughing at how easy it is to steal coins. Show me one person in jail as a result of a bitcoin scam.

[myrkul]

Nothing  has happened to any bitcoin scammers except them laughing at how easy it is to steal coins. Show me one person in jail as a result of a bitcoin scam.

Get the FBI/IRS involved in this, and I'll show you hundreds.

[Bitcoin Oz]

Nothing  has happened to any bitcoin scammers except them laughing at how easy it is to steal coins. Show me one person in jail as a result of a bitcoin scam.

Get the FBI/IRS involved in this, and I'll show you hundreds.

The trouble is half of the scammers targets would be in jail with them 

[myrkul]

Nothing  has happened to any bitcoin scammers except them laughing at how easy it is to steal coins. Show me one person in jail as a result of a bitcoin scam.

Get the FBI/IRS involved in this, and I'll show you hundreds.

The trouble is half of the scammers targets would be in jail with them 

Which is my point. How many people here pay taxes on their BTC? Convince the IRS that it's money, and you're going to have a bad day.

[Raoul Duke]

Nothing  has happened to any bitcoin scammers except them laughing at how easy it is to steal coins. Show me one person in jail as a result of a bitcoin scam.

Get the FBI/IRS involved in this, and I'll show you hundreds.

The trouble is half of the scammers targets would be in jail with them 

Which is my point. How many people here pay taxes on their BTC? Convince the IRS that it's money, and you're going to have a bad day.

uh? AFAIK owing tax money isn't an offense punished with jail time on my country. And the IRS doesn't have any jurisdiction here.

[mp420]

Nothing  has happened to any bitcoin scammers except them laughing at how easy it is to steal coins. Show me one person in jail as a result of a bitcoin scam.

Get the FBI/IRS involved in this, and I'll show you hundreds.

The trouble is half of the scammers targets would be in jail with them 

Which is my point. How many people here pay taxes on their BTC? Convince the IRS that it's money, and you're going to have a bad day.

I for one intend to pay my capital gains taxes on my BTC holdings if they eventually turn out to be worth something and I'm cashing them out.

[Bitcoin Oz]

Nothing  has happened to any bitcoin scammers except them laughing at how easy it is to steal coins. Show me one person in jail as a result of a bitcoin scam.

Get the FBI/IRS involved in this, and I'll show you hundreds.

The trouble is half of the scammers targets would be in jail with them 

Which is my point. How many people here pay taxes on their BTC? Convince the IRS that it's money, and you're going to have a bad day.

The IRS doesnt have a bitcoin address 

[myrkul]

uh? AFAIK owing tax money isn't an offense punished with jail time on my country. And the IRS doesn't have any jurisdiction here.

The fuck is he doing in jail, then? https://en.wikipedia.org/wiki/Wesley_Snipes#Federal_tax_convictions

(And yes, the US IRS has no jurisdiction outside of the US, unless you're a US citizen, but other countries have revenue services)

[Bitcoin Oz]

uh? AFAIK owing tax money isn't an offense punished with jail time on my country. And the IRS doesn't have any jurisdiction here.

The fuck is he doing in jail, then? https://en.wikipedia.org/wiki/Wesley_Snipes#Federal_tax_convictions

(And yes, the US IRS has no jurisdiction outside of the US, unless you're a US citizen, but other countries have revenue services)

 I originally bought coins with after tax income.

[Raoul Duke]

uh? AFAIK owing tax money isn't an offense punished with jail time on my country. And the IRS doesn't have any jurisdiction here.

The fuck is he doing in jail, then? https://en.wikipedia.org/wiki/Wesley_Snipes#Federal_tax_convictions

(And yes, the US IRS has no jurisdiction outside of the US, unless you're a US citizen, but other countries have revenue services)

But I'm not a US citizen. and repeating myself: owing tax money would not send me to jail on my country, so, please do report me to the IRS...
Furthermore, why are you ASSuming I owe any taxes at all from my bitcoin holdings?

[myrkul]

uh? AFAIK owing tax money isn't an offense punished with jail time on my country. And the IRS doesn't have any jurisdiction here.

The fuck is he doing in jail, then? https://en.wikipedia.org/wiki/Wesley_Snipes#Federal_tax_convictions

(And yes, the US IRS has no jurisdiction outside of the US, unless you're a US citizen, but other countries have revenue services)

 I originally bought coins with after tax income.

Have they gained in value? Have you paid taxes on that increase? Trust me, they'll find a way to fuck you, if they want to.

But I'm not a US citizen. and repeating myself: owing tax money would not send me to jail on my country, so, please do report me to the IRS...
Furthermore, why are you ASSuming I owe any taxes at all from my bitcoin holdings?

Sorry, man, I just now see that you said "[in] my country" I thought you said "in any country"... My bad.

And I'm not, but they will, I assure you.

[Bitcoin Oz]

uh? AFAIK owing tax money isn't an offense punished with jail time on my country. And the IRS doesn't have any jurisdiction here.

The fuck is he doing in jail, then? https://en.wikipedia.org/wiki/Wesley_Snipes#Federal_tax_convictions

(And yes, the US IRS has no jurisdiction outside of the US, unless you're a US citizen, but other countries have revenue services)

 I originally bought coins with after tax income.

Have they gained in value? Have you paid taxes on that increase? Trust me, they'll find a way to fuck you, if they want to.

But I'm not a US citizen. and repeating myself: owing tax money would not send me to jail on my country, so, please do report me to the IRS...
Furthermore, why are you ASSuming I owe any taxes at all from my bitcoin holdings?

Sorry, man, I just now see that you said "[in] my country" I thought you said "in any country"... My bad.

And I'm not, but they will, I assure you.

I dont tell the government about my silver collection either 

[E. A. Gail]

But you post about it on the open internet....

If investigated, or if you piss someone off you can get into trouble.

[myrkul]

I dont tell the government about my silver collection either 

Well, true, and believe me, I don't disapprove of you withholding that info, or that about your Bitcoins. But I think calling in the Law is the wost possible thing we can do for this Pirate thing. I mean, eventually, Bitcoin is going to come to their attention as a threat to their financial system, but do we really need to hasten that day?

[Raoul Duke]

But you post about it on the open internet....

If investigated, or if you piss someone off you can get into trouble.

I'm used to piss the gubermint since a long time ago.
I'm also used to defend myself from their powertrips. or do you think we have internet on jail? lol

[E. A. Gail]

Well, actually, in my country you have access to internet and computers in jail.
Even in your own cell if in not missinformed (which i might be since i never had the "opportunity"
to view it first hand).

[sadpandatech]

There is a MASSIVE difference between this;
"On October 12, 2006, Wesley Snipes, Eddie Ray Kahn, and Douglas P. Rosile were charged with one count of conspiring to defraud the United States under 18 U.S.C. § 371 and one count of knowingly making or aiding and abetting the making of a false and fraudulent claim for payment against the United States, under 18 U.S.C. § 287 and 18 U.S.C. § 2. Snipes was also charged with six counts of willfully failing to file federal income tax returns by their filing dates under 26 U.S.C. § 7203.[15] The conspiracy charge against Snipes included allegations that he filed a false amended return, including a false tax refund claim of over US$4 million for the year 1996, and a false amended return, including a false tax refund claim of over US$7.3 million for the year 1997. The government alleged that Snipes attempted to obtain fraudulent tax refunds using a tax protester theory called the "861 argument" (essentially, an argument that the domestic income of U.S. citizens and residents is not taxable). The indictment said Snipes used accountants who already had a history of filing false returns to obtain refund payments for their clients.[16] The government also charged that Snipes sent three worthless, fictitious "bills of exchange" to the Internal Revenue Service (IRS) in the amounts of $1,000,000 (on November 30, 2000), $12,000,000 (January 18, 2001), and $1,000,000 (September 10, 2002), each accompanied by an IRS tax payment voucher coupon.[17]"

and

Filing late returns with capital gains invloved...

Take it from someone who files a fair number of corporate tax returns every year. Every year I've got clients that wait until the very last minute in Nov. to have their previous year taxes filed.. And some that have not filed in years. I've got one now that has not filed since 2003. It does present some issues, but nothing that would prevent them from taking any sort of legal action. And especially would not prevent them from taking legal action that would 'prove' earnings on any recent investments....

How long have bitcoins been earning capital gains for any of the beneficiaries of BS&T that would be looking to file suit?? yeaa.

can we get back on track?