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Author Topic: bitfloor needs your help!  (Read 92152 times)
iCEBREAKER
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September 04, 2012, 10:23:04 PM
 #141

Holding our USD without our consent is illegal.  BitFloor must start accepting and processing USD withdrawals ASAP.
Unfortunately for those of us who had significant USD balances at Bitfloor, what others are saying is correct: Roman must now cease all activity — even activity that many of us would consider "the right thing to do" — and seek legal counsel. Assuming everything is handled sanely in the court system (a big assumption), we might expect a refund of our USD balances in a few months — either all or in part, depending on whether the balances were legally segregated and allocated, which I doubt they were.

Wrong.  Presumption of ownership goes to the segregated account holders.

BitFloor will be sued successfully for holding USD without their OWNER'S consent, unless there is a clause in the TOS stating that any USD deposited into BitFloor automatically becomes part of a single pool of assets with shared liability.

If the communist scumbag Corzine supporters wish to claw back USD that never belonged to them, they are welcome to try AFTER the rightful owners get paid, not before.

"Current payment systems simply can’t compete with bitcoin’s fees, security and convenience.  Why spend hundreds of thousands of dollars on bank fees per year and lose hair as money transfers bounce from bank to bank during a wire transfer sometimes taking days to reach its destination, when it can clear within minutes and for mere pennies?  As a currency, no sovereign can match it.  As a payment system, no financial institution can compete with it.  As a distributed network, no government can stop it."     -Chris Horlacher
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ErebusBat
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September 04, 2012, 10:24:27 PM
 #142

Holding our USD without our consent is illegal.  BitFloor must start accepting and processing USD withdrawals ASAP.
Unfortunately for those of us who had significant USD balances at Bitfloor, what others are saying is correct: Roman must now cease all activity — even activity that many of us would consider "the right thing to do" — and seek legal counsel. Assuming everything is handled sanely in the court system (a big assumption), we might expect a refund of our USD balances in a few months — either all or in part, depending on whether the balances were legally segregated and allocated, which I doubt they were.

Wrong.  Presumption of ownership goes to the segregated account holders.

BitFloor will be sued successfully for holding USD without their OWNER'S consent, unless there is a clause in the TOS stating that any USD deposited into BitFloor automatically becomes part of a single pool of assets with shared liability.

If the communist scumbag Corzine supporters wish to claw back USD that never belonged to them, they are welcome to try AFTER the rightful owners get paid, not before.
I understand your frustration, but your anger will not help anything here.

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iCEBREAKER
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September 04, 2012, 10:26:32 PM
 #143

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Those are my USD, not yours . . .

This is not at all clear under US law, which would presumably apply given Bitfloor's ties to the US.

Au contraire, US law is perfectly clear on the matter:

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution

Actually, that clause is exactly the problem.  Until due process of law, it is not legally clear whether any of the USD controlled by bitfloor is the property of those who had BTC on deposit, the property of bitfloor, or solely the property of those who have USD on deposit with bitfloor.  Bitfloor therefore cannot legally give USD to anyone until due process determines exactly whose property each and every $0.01 is.

That would depend on BitFloor's TOS.  I admit to never reading it, but who would be dumb enough to use an exchange that enforces communist bankster Corzine-style pooled accounts and shared liability for losses?  (Me, maybe...  Cheesy

"Current payment systems simply can’t compete with bitcoin’s fees, security and convenience.  Why spend hundreds of thousands of dollars on bank fees per year and lose hair as money transfers bounce from bank to bank during a wire transfer sometimes taking days to reach its destination, when it can clear within minutes and for mere pennies?  As a currency, no sovereign can match it.  As a payment system, no financial institution can compete with it.  As a distributed network, no government can stop it."     -Chris Horlacher
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September 04, 2012, 10:26:44 PM
 #144

Wrong.  Presumption of ownership goes to the segregated account holders. . .unless there is a clause in the TOS stating that . . .

I have not engaged in any business with BitFloor, so I'm not aware of their TOS.  Do you have a copy of that TOS?  Can you post a copy of it here?

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September 04, 2012, 10:27:19 PM
 #145

So last week I deposited about $1000 in bitfloor and hadn't even yet made a single trade with it. While it was extra savings money and I can survive without it, I am quite upset about not being able to pull my money out....
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September 04, 2012, 10:27:37 PM
 #146



Au contraire, US law is perfectly clear on the matter:

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution



US insolvency requirements are "due process of law".  It's up to those who don't believe that US insolvency law should be applied in this case to petition the court with on point arguments and case law supporting that assertion - the cost of defending against any such actions will come out of the bankrupt estate.  Unless USD holders can establish that they're secured or preferential creditors as defined by US insolvency law, there are no legal grounds on which they can be paid in full in preference to other unsecured creditors without the agreement of those other creditors.


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September 04, 2012, 10:29:18 PM
 #147

Quote
Those are my USD, not yours . . .

This is not at all clear under US law, which would presumably apply given Bitfloor's ties to the US.

Au contraire, US law is perfectly clear on the matter:

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution


These are all things for the legal council (and if it goes to U.S. court, the judge) to decide in order to figure out what actions are appropriate. That's where the "due process of law" comes in. You're entitled to your process, BitFloor is entitled to theirs. BitFloor seeking legal council is where he ensures that he is acting in a way most within the law. Your process would be serving BitFloor and/or suing them.

Things are not that simple that withdrawals can happen just for the solvent parts of the business held; welcome to the world of BitCoin, where everything is without absolute legal precedent (yet). If a legal precedent can be set that the BTC has value, it would be illegal for them to use any portion of the assets (including remaining balances held for what wasn't hacked) to pay out to anybody until the appropriate process on reimbursing has been determined in court.

This WILL not be a quick process. The only quick process would be if the coins were returned by the hacker, or if someone invested BTC in BitFloor in exchange for ownership (or a portion of). I'd imagine this case (albeit not a likely one) is the one that BitFloor is hoping for the most.

Best case for USD holders (and worst case for BTC holders) is that his legal council (or the court system) determines that BTC will be considered "worthless" and that USD should be distributed to account holders as it's the only part of BitFloor that needs to be legally held solvent. However, I can just about guarantee that if this happens, anyone holding a large amount of BTC will file an injunction and appeal, which will almost certainly prevent payout of USD funds from happening quickly.

Hang on folks, this is likely to be an interesting one, especially since it's occurring in the oh-so-litigious US.

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iCEBREAKER
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September 04, 2012, 10:29:59 PM
 #148

Holding our USD without our consent is illegal.  BitFloor must start accepting and processing USD withdrawals ASAP.
Unfortunately for those of us who had significant USD balances at Bitfloor, what others are saying is correct: Roman must now cease all activity — even activity that many of us would consider "the right thing to do" — and seek legal counsel. Assuming everything is handled sanely in the court system (a big assumption), we might expect a refund of our USD balances in a few months — either all or in part, depending on whether the balances were legally segregated and allocated, which I doubt they were.

Wrong.  Presumption of ownership goes to the segregated account holders.

BitFloor will be sued successfully for holding USD without their OWNER'S consent, unless there is a clause in the TOS stating that any USD deposited into BitFloor automatically becomes part of a single pool of assets with shared liability.

If the communist scumbag Corzine supporters wish to claw back USD that never belonged to them, they are welcome to try AFTER the rightful owners get paid, not before.
I understand your frustration, but your anger will not help anything here.

Accusing me of "anger" is not the best way to rebut anything I've claimed.  The ALLCAPS are for emphasis, not rageposting.

Note that not a single exclamation point was used in my post.  I'll use bold next time, so as not to further confuse you.   Cool

"Current payment systems simply can’t compete with bitcoin’s fees, security and convenience.  Why spend hundreds of thousands of dollars on bank fees per year and lose hair as money transfers bounce from bank to bank during a wire transfer sometimes taking days to reach its destination, when it can clear within minutes and for mere pennies?  As a currency, no sovereign can match it.  As a payment system, no financial institution can compete with it.  As a distributed network, no government can stop it."     -Chris Horlacher
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September 04, 2012, 10:30:11 PM
 #149

. . .That would depend on BitFloor's TOS. . .
Exactly, and as such, it would be legally dubious for BitFloor to allow any withdrawl of any funds USD or otherwise, until due process of law has determined exactly what the TOS requires of them.

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ErebusBat
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September 04, 2012, 10:31:13 PM
 #150

So last week I deposited about $1000 in bitfloor and hadn't even yet made a single trade with it. While it was extra savings money and I can survive without it, I am quite upset about not being able to pull my money out....
BF was my primary source of USD=>BTC so I feel your pain.  It very well could have been me so I feel your pain... esp with the price I would not have bought now so I narrowly missed the trap on this  one.

Sorry Sad

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September 04, 2012, 10:31:21 PM
 #151

This is unrelated to anything, but holy crap, Roman?  I simultaneously can and cannot believe that it's you behind Bitfloor.  I haven't paid much attention to Bitcoin in the past few months, so this is really a shock to me.  Good to see you did something incredibly useful with your software skills after Robocup, and I wish the best in continuing the operation of the site.
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September 04, 2012, 10:32:10 PM
 #152

Please quantify the amount of BTC lost as well as the total BTC owed.
What % of BTC were lost?

From the tx it looks like 30K BTC in outputs (although one involved two large outputs so it is unclear what is going on there).

This was almost all of the BTC.

Was there a loss of any USD funds?

No. All USD bank accounts are secure. And all records for the current status of the exchange (accounts, trades, etc) are all also secure.

I had BTC BID order in place. Will all orders be canceled automatically or will business be as usual once you get up and going again?

I am revealed that USD is SAFE. My BID order will be the largest to date with Bitfloor.

I am not panicking. I am sure you have everything under control.

I can't wait to start trading with Bitfloor again!

If there is anything I can do let me know. Credentials are below in my SIG.

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September 04, 2012, 10:32:26 PM
 #153

Accusing me of "anger" is not the best way to rebut anything I've claimed.  The ALLCAPS are for emphasis, not rageposting.

Note that not a single exclamation point was used in my post.  I'll use bold next time, so as not to further confuse you.   Cool
My apologies then, I misinterpreted your intentions.

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September 04, 2012, 10:33:50 PM
 #154

@unclemantis... You should probably read the rest of the thread

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iCEBREAKER
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September 04, 2012, 10:34:39 PM
 #155

So last week I deposited about $1000 in bitfloor and hadn't even yet made a single trade with it. While it was extra savings money and I can survive without it, I am quite upset about not being able to pull my money out....

Didn't you know that your $1000 instantly became part of the BitFloor collective the moment you deposited it?

Oh wait, that's not a reasonable interpretation of US law at all.  Sorry, the communists here are starting to confuse me.   Roll Eyes




"Current payment systems simply can’t compete with bitcoin’s fees, security and convenience.  Why spend hundreds of thousands of dollars on bank fees per year and lose hair as money transfers bounce from bank to bank during a wire transfer sometimes taking days to reach its destination, when it can clear within minutes and for mere pennies?  As a currency, no sovereign can match it.  As a payment system, no financial institution can compete with it.  As a distributed network, no government can stop it."     -Chris Horlacher
iCEBREAKER
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September 04, 2012, 10:36:52 PM
 #156



Au contraire, US law is perfectly clear on the matter:

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_tSates_Constitution



US insolvency requirements are "due process of law".  It's up to those who don't believe that US insolvency law should be applied in this case to petition the court with on point arguments and case law supporting that assertion - the cost of defending against any such actions will come out of the bankrupt estate.  Unless USD holders can establish that they're secured or preferential creditors as defined by US insolvency law, there are no legal grounds on which they can be paid in full in preference to other unsecured creditors without the agreement of those other creditors.


Please show me where BitFloor has filed for bankruptcy, and then you might have a point.  Otherwise your post is non sequitur.

"Current payment systems simply can’t compete with bitcoin’s fees, security and convenience.  Why spend hundreds of thousands of dollars on bank fees per year and lose hair as money transfers bounce from bank to bank during a wire transfer sometimes taking days to reach its destination, when it can clear within minutes and for mere pennies?  As a currency, no sovereign can match it.  As a payment system, no financial institution can compete with it.  As a distributed network, no government can stop it."     -Chris Horlacher
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September 04, 2012, 10:39:52 PM
 #157

. . .Please show me where BitFloor has filed for bankruptcy, and then you might have a point.  Otherwise your post is non sequitur.
I'm sure that is one of several options that are being considered and discussed with Legal Counsel.

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repentance
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September 04, 2012, 10:41:11 PM
 #158



Au contraire, US law is perfectly clear on the matter:

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_tSates_Constitution



US insolvency requirements are "due process of law".  It's up to those who don't believe that US insolvency law should be applied in this case to petition the court with on point arguments and case law supporting that assertion - the cost of defending against any such actions will come out of the bankrupt estate.  Unless USD holders can establish that they're secured or preferential creditors as defined by US insolvency law, there are no legal grounds on which they can be paid in full in preference to other unsecured creditors without the agreement of those other creditors.


Please show me where BitFloor has filed for bankruptcy, and then you might have a point.  Otherwise your post is non sequitur.

The laws apply from the moment the insolvency occurs (or can be anticipated) whether or not bankruptcy has been filed - that's why payments made prior to the filing of bankruptcy can be clawed back and why making preferential payments within a class of creditors is an offence in and of itself.

The possibility of trading out in some way exists here and Bitfloor is legally obliged to consider all options which would maximise the return to its creditors (including selling the business in part or in whole), but it cannot legally give preference to any unsecured creditors while it's insolvent (which it is at this point in time).

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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September 04, 2012, 10:41:32 PM
 #159

. . .I am quite upset about not being able to pull my money out....

Didn't you know that your $1000 instantly became part of the BitFloor collective the moment you deposited it?

Oh wait, that's not a reasonable interpretation of US law at all. . .
But it may be a reasonable interpretation of the BitFloor TOS.  This has not yet been established.

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September 04, 2012, 10:41:36 PM
 #160

Quote
Those are my USD, not yours . . .

This is not at all clear under US law, which would presumably apply given Bitfloor's ties to the US.

Au contraire, US law is perfectly clear on the matter:

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution

The fifth amendment has no bearing on this issue.

If your sole qualification for making statements about US law is the fact that you have an opinion about US law, you might want to STFU before you make a fool of yourself to a greater extent.
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