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April 17, 2014, 05:24:27 AM *
News: ♦♦ A bug in OpenSSL, used by Bitcoin-Qt/Bitcoin Core, could allow your bitcoins to be stolen. Immediately updating Bitcoin Core to 0.9.1 is required in some cases, especially if you're using 0.9.0. Download. More info.
The same bug also affected the forum. Changing your forum password is recommended.
 
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Author Topic: bitfloor needs your help!  (Read 91999 times)
whitslack
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September 04, 2012, 11:12:46 PM
 #181

I suspect that if BitFloor's legal counsel advised them against further communications via this forum, that they would not let their creditors know via this site or forum.  As a matter of fact, I suspect that we won't see much further communication from BitFloor via this forum at this time unless they find a way to come back online and cover all losses.
So is it now on me to remember to check Bitfloor.com or this thread a month, two months, three months from now to see if there's been unveiled a way for me to reclaim the part of my property that wasn't stolen?
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DannyHamilton
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September 04, 2012, 11:15:46 PM
 #182

Well if Bitfloor is enjoined by a court order they would be required to inform their creditors of that material fact.  It would be in their best interest to do so (prevent filing of additional suits for a matter already heard by the court).  The court order would also become public record.
This is true, but I doubt that bitcointalk.org will be the method that legal counsel uses to disseminate this information. 

Of course all that is academic because no injunction will be granted.
This may be true.  Only time will tell.

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blakdawg
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September 04, 2012, 11:16:56 PM
 #183

It's also possible for a creditor to file a petition in bankruptcy court to force an uncooperative/insolvent debtor into bankruptcy.

There are tons of interesting legal projects here, the real question is whether or not anyone's lost enough money to make it worth pursuing, and if they're inclined to possibly throw good money after bad.

My hunch is that people who are sophisticated enough to maneuver through the issues were also savvy enough not to leave a lot of value in the hands of someone who leaves an unencrypted wallet on a Linode VPS. And if they made that mistake, they probably will choose to treat it as a learning experience and move on (the funds were probably intended for speculation, so their loss is likely to be inconsequential) rather than fight for control of a rapidly diminishing pool of assets.

People who were foolish enough (if there are any left after previous exchange disasters and the Pirate swindle) to leave most/all of their funds in an online exchange probably don't have any resources left with which to fight about this.
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September 04, 2012, 11:18:30 PM
 #184

lulz

The Bitcoin Show - 056 - Roman Shtylman of Bitfloor.com

From the immortal Dumb and Dumber "Were in a hole... We just gotta dig ourselves out"
blakdawg
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September 04, 2012, 11:22:34 PM
 #185

I suspect that if BitFloor's legal counsel advised them against further communications via this forum, that they would not let their creditors know via this site or forum.  As a matter of fact, I suspect that we won't see much further communication from BitFloor via this forum at this time unless they find a way to come back online and cover all losses.
So is it now on me to remember to check Bitfloor.com or this thread a month, two months, three months from now to see if there's been unveiled a way for me to reclaim the part of my property that wasn't stolen?

If a bankruptcy is filed and you had $ or BTC at bitfloor, you should be included on the list of creditors, and you'll get periodic mailings about the progress of the matter.

If some other legal action is filed, there's a pretty good chance you'll be included as a party, which would mean you'll get copies of filings, unless you hire an attorney, who'd handle them for you.

But, generally, this is how the world works. If you entrust someone else with your stuff, and shit happens to them where they have trouble giving back all of the stuff they've promised to others, it's gonna be ugly and inconvenient. This is even how it works if someone comes to your house and takes all of your shit involuntarily.

So the trick is to not let it happen in the first place.

Ask the Bitcoinica depositors how that claim process is going.

At least here, there's some chance that this will be handled in an orderly fashion in a single jurisdiction, instead of the international clusterfuck that is Bitcoinica.
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September 04, 2012, 11:22:56 PM
 #186

So is it now on me to remember to check Bitfloor.com or this thread a month, two months, three months from now to see if there's been unveiled a way for me to reclaim the part of my property that wasn't stolen?
Good question.  Here's two for you.  If it turns out that the only way for anyone to regain any of their property, Bitcoin or USD, is to file a petition with the court, will you bother to do so?  How many will?

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September 04, 2012, 11:25:58 PM
 #187

If a bankruptcy is filed and you had $ or BTC at bitfloor, you should be included on the list of creditors, and you'll get periodic mailings about the progress of the matter.
Now we are getting to the really interesting stuff.  If BitFloor does not have any information on how to contact you, how will you get periodic mailings?

If some other legal action is filed, there's a pretty good chance you'll be included as a party, which would mean you'll get copies of filings,
See my question above.

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blakdawg
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September 04, 2012, 11:29:09 PM
 #188

. . . savvy enough not to leave a lot of value in the hands of someone who leaves an unencrypted wallet on a Linode VPS.

I want to be clear that while that sounds harsh, and I do view this as a pretty significant screw-up (in that several hundred thousand dollars have been lost) I respect the way Roman has handled this so far in terms of (apparently) being open with the community, trying to fix things, and in seeking help when he figured out that he was in over his head. I don't see what he could have done better other than not let this happen in the first place, which is a lot easier to say than to do.

My personal guess is that Bitfloor is dead but Roman will go on to do other, better things, wiser from the experience.

And so will the people who just learned an expensive lesson about the difference between an insured deposit at a real financial institution and an entry in a database table on a Linode VPS.

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September 04, 2012, 11:29:26 PM
 #189

To my knowledge, no USD deposits receive interest correct?

If interest was being earned then those deposits would be a different pool of "customer property" than the USDs deposited for the purpose of trading (which is the same purpose that my BTCs were deposited for -- only for the purpose of trading).

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September 04, 2012, 11:30:13 PM
 #190

I suspect that if BitFloor's legal counsel advised them against further communications via this forum, that they would not let their creditors know via this site or forum.  As a matter of fact, I suspect that we won't see much further communication from BitFloor via this forum at this time unless they find a way to come back online and cover all losses.
So is it now on me to remember to check Bitfloor.com or this thread a month, two months, three months from now to see if there's been unveiled a way for me to reclaim the part of my property that wasn't stolen?

If they have your contact details, then they would be obligated to inform you of what's going on using the contact methods they have for you.  One of the biggest dangers of using services which do not require real life contact details - or choosing not to provide them - is that you may miss out on important information.

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It's also possible for a creditor to file a petition in bankruptcy court to force an uncooperative/insolvent debtor into bankruptcy.

While this is true, there is usually a requirement that you make a demand for payment of the debt and that it go unpaid for a period of time following that demand.  While a debtor is actively seeking solutions such as borrowing, selling personal assets, or selling equity in the enterprise, it's not necessarily smart to immediately petition for involuntary bankruptcy.

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, 11:34:39 PM
 #191

If a bankruptcy is filed and you had $ or BTC at bitfloor, you should be included on the list of creditors, and you'll get periodic mailings about the progress of the matter.
Now we are getting to the really interesting stuff.  If BitFloor does not have any information on how to contact you, how will you get periodic mailings?

If some other legal action is filed, there's a pretty good chance you'll be included as a party, which would mean you'll get copies of filings,
See my question above.


The best thing to do is to make sure that BitFloor does have a mailing address for you - then there's no excuse for not giving you notice of proceedings. It's possible that a judge would order them to send notice via E-mail; but it's also possible that won't happen. The standard in the legal community is to communicate via postal mail, and the assumption is that everyone's got a postal address where they can be notified of things.

People who don't want to participate in that system don't have to, but they'll also need to get their news second-hand.

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September 04, 2012, 11:36:36 PM
 #192

No clear answer on how the hacker got in.... Without that one might as well assume owner took it. Bitcoins missing.... Oh well.
Show the logs and analysis!!!
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September 04, 2012, 11:37:45 PM
 #193

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Personally like it or not, I think on a long enough time line we will be in the "all" category.

Never.
And in no case shall that "all" be US law.

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September 04, 2012, 11:40:23 PM
 #194

No clear answer on how the hacker got in.... Without that one might as well assume owner took it. Bitcoins missing.... Oh well.
Show the logs and analysis!!!

I agree, the site owner should be considered the number one suspect in all of these Bitcoin website hacks that result in stolen Bitcoin. They have the means, the motive, and the convenient excuse (those damn hackers!)

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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September 04, 2012, 11:43:06 PM
 #195

I'd just like to point out the importance of Bitfloor consulting an insolvency specialist and not a general lawyer.  You need someone who'll advise you on all of the legal options available and their pros and cons.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
blakdawg
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September 04, 2012, 11:45:31 PM
 #196

Quote
It's also possible for a creditor to file a petition in bankruptcy court to force an uncooperative/insolvent debtor into bankruptcy.

While this is true, there is usually a requirement that you make a demand for payment of the debt and that it go unpaid for a period of time following that demand.  While a debtor is actively seeking solutions such as borrowing, selling personal assets, or selling equity in the enterprise, it's not necessarily smart to immediately petition for involuntary bankruptcy.

Agreed - I'm not saying it's a good idea (frankly I don't have enough facts to have an opinion about that) but mentioning it as a possibility. To me, this seems like it's headed for bankruptcy, unless all of the creditors are so small that individually it's just not worth filing suit. My hunch is that there are going to be a couple of people with balances in the tens of thousands of dollars (or equivalent in BTC) who will go ahead and file (similar to Cartmell v. Bitcoinica) because they'd rather spend a few thousand more getting something filed and use that as leverage to settle and/or to use the civil discovery process to figure out what's going on . . . and from the company's point of view, it probably makes more sense to spend their cash on bankruptcy attorneys rather than fight lawsuits, only to end up in bankruptcy after losing the lawsuits. The bankruptcy action will create an automatic stay on other matters, so regular civil suits will be frozen while the bankruptcy is resolved.
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September 04, 2012, 11:46:10 PM
 #197

No clear answer on how the hacker got in.... Without that one might as well assume owner took it. Bitcoins missing.... Oh well.
Show the logs and analysis!!!

I agree, the site owner should be considered the number one suspect in all of these Bitcoin website hacks that result in stolen Bitcoin. They have the means, the motive, and the convenient excuse (those damn hackers!)

reopening the website/ports without audit is madness too unless you know exactly what happened and how to close hole.
plus possible backdoor left if attacker had permits to do so.
whitslack
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September 04, 2012, 11:46:35 PM
 #198

So is it now on me to remember to check Bitfloor.com or this thread a month, two months, three months from now to see if there's been unveiled a way for me to reclaim the part of my property that wasn't stolen?
Good question.  Here's two for you.  If it turns out that the only way for anyone to regain any of their property, Bitcoin or USD, is to file a petition with the court, will you bother to do so?  How many will?
I already assume my BTC is irrecoverable, and I won't seek to take the property of others to make up for my loss. However, I did have a few hundred USD at Bitfloor, and I would consider that my property, and I would like it returned. Now, legally, I am aware that pooled accounts have some disadvantages in bankruptcy situations. Although I personally believe my entire USD balance should be returned to me, I recognize that a court may decide to lump all customer deposits, both USD and BTC, in one large pot and then pay out the unstolen USD proportionally. Since I had more value in BTC at Bitfloor than I had in USD, that latter scenario would could actually be better for me financially, but I still think it's less morally sound than the strict, allocated treatment. But my views on morality have no bearing on what a judge will say. I will attempt to recover my USD balance, and if the judge wants to pay me a fraction of my USD balance but also compensate me a fraction of my BTC balance, I suppose I would take that deal.
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September 04, 2012, 11:48:00 PM
 #199



I'll use bold next time, so as not to further confuse you.   Cool

use bold with caution, or have you not read the entire thread?

This is not some pseudoeconomic post-modern Libertarian cult, it's an un-led, crowd-sourced mega startup organized around mutual self-interest where problems, whether of the theoretical or purely practical variety, are treated as temporary and, ultimately, solvable.
Censorship of e-gold was easy. Censorship of Bitcoin will be… entertaining.
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September 04, 2012, 11:51:00 PM
 #200

I'm in for $2k now. Just remembered I had moved $1k from my ING account into BF getting ready for a purchase. Whitslack, Icebreaker, consider me in if it happens.

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