The pirate ponzi fiasco

[SpontaneousDisorder]

Can he have a "ponzi legend" tag instead?

[swissmate]

I think that being 4 days offline is enough to call him a scammer as he should be at least 24 hours after all this.

He's been online. 

Last online August 26, 2012, 03:20:19 PM

[wrend]

and yet they still haven't given him the scammer tag.   WTF !!!

There are still some very reasonable people who think he'll pay back most/all of the BTC. If he loses both Matthew's bet and Vandroiy's bet and he hasn't at least started a reasonable repayment plan, I'll give him the scammer tag. (It's only symbolic at this point, anyway -- no one's going to be tricked into trading with someone involved in such a high-profile controversy.)

Passthrough operators will not get scammer tags unless they broke explicit contracts.

The key word of your statment.... they "THINK" he will pay back, so far thinking hasn't done much all that good. We all thought pirate was a truthworthy fellow, and we all see how that went.

Thinking doesnt pay the bills (unless your using your ideas for movies like porno), hell it doesnt even mine bitcoin.... Thinking only makes 7% possible for a short period of time

Then in comes the 100% pirate bankers fee....

Pirate broke explicit contracts.

[BlackBison]

come on mods just tag him and be done with it.

but dont give it to the pass through ops- maybe create a 'stupidity tag' for them..

[JoelKatz]

Nobody disputes that the pass through owners are blameless.  They all made it very clear up front that whatever happens happens..

I dispute that. Any PPT owner who can be documented as having stated that they think it's a Ponzi scheme, but who nevertheless operated a PPT, is *not* blameless. They are almost as guilty as Pirate is.

If you go to a guy who you have reason to know steals televisions and give him $40 to get you a television, you're as guilty of the theft as that guy is. PPT operators who can be shown to have stated that they thought it was a Ponzi scheme knowingly paid Pirate to transfer other people's money to them knowing that Pirate collected that money by stating that it would be used for legitimate investments and knowing that such payments to them were not legitimate investments.

The issue is not the arrangement between them and their bondholders. The issue is that they knowingly paid Pirate to make them the recipients of fraudulent transfers, making them an accomplice to that fraud.

(Also, I predict that before this is all over, PPT operators will start breaching their agreements. Already there are whispers of them conspiring with Pirate to absolve themselves of their obligation to pass through payments and force their depositors to obtain their own settlements.)

[wrend]

Please vote in the pole:
Is pirate considered a scammer by Bitcoin community?

do you think pirate@40 should get a scammer tag?

https://bitcointalk.org/index.php?topic=104322.0

No
Yes
Who is Pirate
I don't care
Yes, at least until he pays.

[bbit]

Well, time to break out the bubbly, its official.

You guys got ripped off... Same with you pass-throughers, gotta have some real balls to build a pt over a ponzi scheme.

hahaha......

[Phinnaeus Gage]

Well, time to break out the bubbly, its official.

You guys got ripped off... Same with you pass-throughers, gotta have some real balls to build a pt over a ponzi scheme.

Finally, a place to place the image I found the other day.

[BIGMERVE]

Nobody disputes that the pass through owners are blameless.  They all made it very clear up front that whatever happens happens..

I dispute that. Any PPT owner who can be documented as having stated that they think it's a Ponzi scheme, but who nevertheless operated a PPT, is *not* blameless. They are almost as guilty as Pirate is.

If you go to a guy who you have reason to know steals televisions and give him $40 to get you a television, you're as guilty of the theft as that guy is. PPT operators who can be shown to have stated that they thought it was a Ponzi scheme knowingly paid Pirate to transfer other people's money to them knowing that Pirate collected that money by stating that it would be used for legitimate investments and knowing that such payments to them were not legitimate investments.

The issue is not the arrangement between them and their bondholders. The issue is that they knowingly paid Pirate to make them the recipients of fraudulent transfers, making them an accomplice to that fraud.

(Also, I predict that before this is all over, PPT operators will start breaching their agreements. Already there are whispers of them conspiring with Pirate to absolve themselves of their obligation to pass through payments and force their depositors to obtain their own settlements.)

That doesn't even make sense. The guys giving PPT did not know Pirate was going to run. They all clearly stated that It might be a Ponzi and that any investment in a PPT would be a risk. That doesn't mean they stole peoples money. The PPT can not be put at fault.

[freeAgent]

It sounds like Pirate's plan was to take victims' Bitcoin and use it for higher than market-rate payouts at GPUMAX.  In return, he got coins which could not necessarily/easily be traced to him.  He planned to make up the difference by manipulating/playing the currency conversion market.  He planned to be a net seller on highs and then buy up more than he sold for less in USD after he crashed the exchange rate.  Unfortunately for Pirate, the market didn't go his way.  Either it outgrew his influence or people wised up, or he played it poorly and his scheme was up.  He found he wasn't able to swing the market enough to buy back the amount of Bitcoin necessary to pay his returns and has now defaulted.

It's likely they he probably has a bunch of "clean" coins from GPUMAX mining that he's hiding as well, but it's definitely not enough to pay everyone back.  What remains to be seen is what will happen with GPUMAX now that BTCST has collapsed.  I suspect either payouts will 1) drop to below market as Pirate attempts to pay BTCST victims 2) drop to a non-inflated rate now that there's nothing coming into BTCST or 3) it will collapse completely.

Anyway, that's is my theory.

[BitBlitz]

That doesn't even make sense. The guys giving PPT did not know Pirate was going to run. They all clearly stated that It might be a Ponzi and that any investment in a PPT would be a risk. That doesn't mean they stole peoples money. The PPT can not be put at fault.

Pirate could've really f-d the PPTs over by claiming he repaid them, and left the PPT investorssuckers wondering *who* really has their bitcoins.

[n8rwJeTt8TrrLKPa55eU]

It sounds like Pirate's plan was to take victims' Bitcoin and use it for higher than market-rate payouts at GPUMAX.  In return, he got coins which could not necessarily/easily be traced to him.  He planned to make up the difference by manipulating/playing the currency conversion market.  He planned to be a net seller on highs and then buy up more than he sold for less in USD after he crashed the exchange rate.  Unfortunately for Pirate, the market didn't go his way.  Either it outgrew his influence or people wised up, or he played it poorly and his scheme was up.  He found he wasn't able to swing the market enough to buy back the amount of Bitcoin necessary to pay his returns and has now defaulted.

It's likely they he probably has a bunch of "clean" coins from GPUMAX mining that he's hiding as well, but it's definitely not enough to pay everyone back.  What remains to be seen is what will happen with GPUMAX now that BTCST has collapsed.  I suspect either payouts will 1) drop to below market as Pirate attempts to pay BTCST victims 2) drop to a non-inflated rate now that there's nothing coming into BTCST or 3) it will collapse completely.

Anyway, that's is my theory.

I could buy this theory. As to GPUMAX, I would bet #3, anything and anybody that Pirate was directly involved with, will soon be treated as though it has leprosy.  The Bruce Wagner & ZT effect.

[BIGMERVE]

That doesn't even make sense. The guys giving PPT did not know Pirate was going to run. They all clearly stated that It might be a Ponzi and that any investment in a PPT would be a risk. That doesn't mean they stole peoples money. The PPT can not be put at fault.

Pirate could've really f-d the PPTs over by claiming he repaid them, and left the PPT investorssuckers wondering *who* really has their bitcoins.

This would be easy to prove/disprove with blockchain.info. Although the shit-storm would be a blast to watch.

[repentance]

I think that being 4 days offline is enough to call him a scammer as he should be at least 24 hours after all this.

He's been online. 

Last online August 26, 2012, 03:20:19 PM

He posts mostly on IRC and he's continued doing that.

[JoelKatz]

Nobody disputes that the pass through owners are blameless.  They all made it very clear up front that whatever happens happens..

I dispute that. Any PPT owner who can be documented as having stated that they think it's a Ponzi scheme, but who nevertheless operated a PPT, is *not* blameless. They are almost as guilty as Pirate is.

If you go to a guy who you have reason to know steals televisions and give him $40 to get you a television, you're as guilty of the theft as that guy is. PPT operators who can be shown to have stated that they thought it was a Ponzi scheme knowingly paid Pirate to transfer other people's money to them knowing that Pirate collected that money by stating that it would be used for legitimate investments and knowing that such payments to them were not legitimate investments.

The issue is not the arrangement between them and their bondholders. The issue is that they knowingly paid Pirate to make them the recipients of fraudulent transfers, making them an accomplice to that fraud.

(Also, I predict that before this is all over, PPT operators will start breaching their agreements. Already there are whispers of them conspiring with Pirate to absolve themselves of their obligation to pass through payments and force their depositors to obtain their own settlements.)

That doesn't even make sense. The guys giving PPT did not know Pirate was going to run. They all clearly stated that It might be a Ponzi and that any investment in a PPT would be a risk. That doesn't mean they stole peoples money. The PPT can not be put at fault.

Not to be rude, but it looks like you didn't even read what I wrote. Please read the sections I bolded. The problem is that they knowingly paid Pirate to fraudulently transfer other people's money to them. (Note that this only applies to PPT operators who can be documented to have stated that they suspected Pirate was likely operating a Ponzi scheme.)

[repentance]

I could buy this theory. As to GPUMAX, I would bet #3, anything and anybody that Pirate was directly involved with, will soon be treated as though it has leprosy.  The Bruce Wagner & ZT effect.

People are still happily joining GPUMax and openly stating that they don't care if pirate owes BS&T users hundreds of thousands of BTC.  Never underestimate the power of human greed and what people are willing to overlook in their quest for riches.

[freeAgent]

I could buy this theory. As to GPUMAX, I would bet #3, anything and anybody that Pirate was directly involved with, will soon be treated as though it has leprosy.  The Bruce Wagner & ZT effect.

People are still happily joining GPUMax and openly stating that they don't care if pirate owes BS&T users hundreds of thousands of BTC.  Never underestimate the power of human greed and what people are willing to overlook in their quest for riches.

Those people are idiots and enablers.

[BIGMERVE]

Nobody disputes that the pass through owners are blameless.  They all made it very clear up front that whatever happens happens..

I dispute that. Any PPT owner who can be documented as having stated that they think it's a Ponzi scheme, but who nevertheless operated a PPT, is *not* blameless. They are almost as guilty as Pirate is.

If you go to a guy who you have reason to know steals televisions and give him $40 to get you a television, you're as guilty of the theft as that guy is. PPT operators who can be shown to have stated that they thought it was a Ponzi scheme knowingly paid Pirate to transfer other people's money to them knowing that Pirate collected that money by stating that it would be used for legitimate investments and knowing that such payments to them were not legitimate investments.

The issue is not the arrangement between them and their bondholders. The issue is that they knowingly paid Pirate to make them the recipients of fraudulent transfers, making them an accomplice to that fraud.

(Also, I predict that before this is all over, PPT operators will start breaching their agreements. Already there are whispers of them conspiring with Pirate to absolve themselves of their obligation to pass through payments and force their depositors to obtain their own settlements.)

That doesn't even make sense. The guys giving PPT did not know Pirate was going to run. They all clearly stated that It might be a Ponzi and that any investment in a PPT would be a risk. That doesn't mean they stole peoples money. The PPT can not be put at fault.

Not to be rude, but it looks like you didn't even read what I wrote. Please read the sections I bolded. The problem is that they knowingly paid Pirate to fraudulently transfer other people's money to them. (Note that this only applies to PPT operators who can be documented to have stated that they suspected Pirate was likely operating a Ponzi scheme.)

I think the only thing that would make it fraud is if the PPT knew for a fact that BCST was a Ponzi. They would only be committing fraud legally if there was intent or "mens rea".

[repentance]

I think the only thing that would make it fraud is if the PPT knew for a fact that BCST was a Ponzi. They would only be committing fraud legally if there was intent or "mens rea".

I seriously doubt that any users are going to take legal action against the PPT operators anyway because it's likely that the people who were doubling their money every 10 weeks weren't declaring that income (or the BTC they invested in the first place).  In the event that they did, though, some of the operators may be more liable than others if they actively promoted the scheme or acted against the interests of their investors for their own enrichment (the buying up of accounts after pirate defaulted seems to be a real grey area here).

There's also the question of whether PPT could be held liable if they fail to aggressively pursue recovery of client funds from pirate.

[JoelKatz]

I think the only thing that would make it fraud is if the PPT knew for a fact that BCST was a Ponzi. They would only be committing fraud legally if there was intent or "mens rea".

You don't need to know "for a fact". You just need to know. Any PPT operator who is on record as saying that they think Pirate is operating a Ponzi is a scammer. It's no different from a guy who pays someone $50 for a TV thinking that person will likely steal a TV and give it to them.