bitfloor needs your help!

[Rassah]

Citation needed for that theft.

Where is the police report?

Ooooooh, I see. You are just gambling on the idea that Bitfloor actually stole the money themselves, thus totally fucking up their reputation and business, while planning to continue to keep running their business instead of just running with the money (huh?) being completely open and public about who they are, how they screwed up, and how much they owe while trying to repay all the money from their business profits (wtf?), and actually still in fact have all those bitcoins stashed somewhere, while simultaneously being bankrupt (omgwtf!), while at the same time not even bothering to type "Bitfloor police report" into Google.

Yay derp derp derp.

[1713553625]

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[SgtSpike]

I am just upset at the lack of communication and payouts.  He used to be so active here, now he says nothing.  He doesn't indicate a regular period of when we can expect payouts.  He doesn't show calculations of how much the site has made in revenue vs the latest payment.  Heck, he didn't even pay out anything the last few months until today.

I can sympathize with his position. He'll likely never be able to pay back the entire BTC balance, so every hour he spends conducting activities for bitfloor, he's essentially working for free.  And that will likely never change.  That would be discouraging as hell.  But it still doesn't change what happened.  He needs to be in communication of some sort, or at the very least, give regular monthly payments.

[fcmatt]

I am just upset at the lack of communication and payouts.  He used to be so active here, now he says nothing.  He doesn't indicate a regular period of when we can expect payouts.  He doesn't show calculations of how much the site has made in revenue vs the latest payment.  Heck, he didn't even pay out anything the last few months until today.

I can sympathize with his position. He'll likely never be able to pay back the entire BTC balance, so every hour he spends conducting activities for bitfloor, he's essentially working for free.  And that will likely never change.  That would be discouraging as hell.  But it still doesn't change what happened.  He needs to be in communication of some sort, or at the very least, give regular monthly payments.

Or make sure anyone owed a govt currency is paid.. and the rest who are owed bitcoin? well that is just a made up internet token and just
never pay it. walk away and never come back.

Sure someone might sue you but I doubt it would last very long in court once the details come out that the only thing lost was some "fake
internet tokens".

I am not dissing bitcoin. I am just saying it is the most likely path for this to play out.

[SgtSpike]

I am just upset at the lack of communication and payouts.  He used to be so active here, now he says nothing.  He doesn't indicate a regular period of when we can expect payouts.  He doesn't show calculations of how much the site has made in revenue vs the latest payment.  Heck, he didn't even pay out anything the last few months until today.

I can sympathize with his position. He'll likely never be able to pay back the entire BTC balance, so every hour he spends conducting activities for bitfloor, he's essentially working for free.  And that will likely never change.  That would be discouraging as hell.  But it still doesn't change what happened.  He needs to be in communication of some sort, or at the very least, give regular monthly payments.

Or make sure anyone owed a govt currency is paid.. and the rest who are owed bitcoin? well that is just a made up internet token and just
never pay it. walk away and never come back.

Sure someone might sue you but I doubt it would last very long in court once the details come out that the only thing lost was some "fake
internet tokens".

I am not dissing bitcoin. I am just saying it is the most likely path for this to play out.

I don't see how a court would view Bitcoins any differently than any other debt.  They would peg it to USD value for certain (potentially retroactively to the value at the date/time of the theft), and only make a judgement in USD, but it doesn't matter if someone owes me Bitcoins or they owe me bananas - it is still something of value that they are indebted to me for.

Bitfloor might also be protected by an LLC or something too, in which case, a lawsuit wouldn't matter.

[Rassah]

I am just upset at the lack of communication and payouts.

That I agree with. Even the Google+ account (their announcement board) hasn't been updated in months. I'd like to see something from Roman, even if just to let us know that he's still alive  Even better would be some statements as to the state of the business, and maybe replies to any changes in the Bitcoin ecosphere, such as the effects of the recent price spike on repayments, or any statements in response to the FinCEN crap.

[DeathAndTaxes]

Bitfloor might also be protected by an LLC or something too, in which case, a lawsuit wouldn't matter.

Clarification.  An LLC (or incorporation) doesn't protect the company.  It provides liability protection for the owners.  The reality is that like most Bitcoin based companies Bitfloor doesn't have any "real" (tangible) assets.  You can't get blood from a stone.  Unlike a company which has warehouses, inventory, office equipment, etc which can be liquidiated Bitfloor assets would be limited to the brand (which would be destroyed in a bankruptcy), and the code plus any operating capital.  Bitfloor has paid out excess operating capital on a quarterly basis so I doubt you are getting more there.

The reality is a lawsuit is in nobody best interest.  Between court costs, legal fees (including Bitfloor's legal fees which will deplete operating capital) even if one got a judgement for the full amount it simply means Bitfloor would be forced into bankruptcy and creditors would be lucky to get 5 cents on the dollar.  The liquidated value of Bitfloor (as opposed to operating value) is very low.

For those ganshing at the teeth for a lawsuit here is a practical excercise.

1) Estimate the cash on hand (both BTC & USD) that bitfloor has
2) Estimate what the assets (code base, customer lists) of bitfloor could be sold for in liquidation (note most assets liquidate for 10% to 30% of face value in BK).
3) Add 1 + 2 together and subtract bitfloor estimated legal fees.

3 is the total liquidation value of bitfloor.  Divide this by the current amount owed (in USD) and that is % each creditor could expect to receive in liquidation.  Now subtract legal fees.

[SgtSpike]

Bitfloor might also be protected by an LLC or something too, in which case, a lawsuit wouldn't matter.

Clarification.  An LLC (or incorporation) doesn't protect the company.  It provides liability protection for the owners.  The reality is that like most Bitcoin based companies Bitfloor doesn't have any "real" (tangible) assets.  You can't get blood from a stone.  Unlike a company which has warehouses, inventory, office equipment, etc which can be liquidiated Bitfloor assets would be limited to the brand (which would be destroyed in a bankruptcy), and the code plus any operating capital.  Bitfloor has paid out excess operating capital on a quarterly basis so I doubt you are getting more there.

The reality is a lawsuit is in nobody best interest.  Between court costs, legal fees (including Bitfloor's legal fees which will deplete operating capital) even if one got a judgement for the full amount it simply means Bitfloor would be forced into bankruptcy and creditors would be lucky to get 5 cents on the dollar.  The liquidated value of Bitfloor (as opposed to operating value) is very low.

For those ganshing at the teeth for a lawsuit here is a practical excercise.

1) Estimate the cash on hand (both BTC & USD) that bitfloor has
2) Estimate what the assets (code base, customer lists) of bitfloor could be sold for in liquidation (note most assets liquidate for 10% to 30% of face value in BK).
3) Add 1 + 2 together and subtract bitfloor estimated legal fees.

3 is the total liquidation value of bitfloor.  Divide this by the current amount owed (in USD) and that is % each creditor could expect to receive in liquidation.  Now subtract legal fees.

Well, that's exactly what I meant.  If Bitfloor was started as an LLC, then creditors aren't going to get jack diddly in a lawsuit, and Roman would just shrug it off since it wouldn't affect him directly.  If Bitfloor is NOT an LLC, then Roman's assets (whatever those may be) are at stake, and if nothing else, creditors looking for revenge would get the satisfaction of justice being served.

For me personally, I'd just like whatever option gets me the most of my money back, and I seriously doubt it'll come through a lawsuit.  But, I'd be willing to sell my debt for 0.1 BTC / BTC owed to whomever is interested, because I don't think we'll ever see that much in payback.  If that person wants to take my debt on a lawsuit with them, then all power to 'em.

[Rassah]

What if later on there's a countersuit against whoever brought this suit, to try to recover lost potential repayments, and the person who brought this suit is not protected by any LLC, resulting in the remaining people who did not want the initial suit getting repaid from this initial suer's personal financial holdings? Could that happen?

[SgtSpike]

What if later on there's a countersuit against whoever brought this suit, to try to recover lost potential repayments, and the person who brought this suit is not protected by any LLC, resulting in the remaining people who did not want the initial suit getting repaid from this initial suer's personal financial holdings? Could that happen?

...

Where is Nolo when you need him?   

[Stephen Gornick]

Bitfloor has paid out excess operating capital on a quarterly basis so I doubt you are getting more there.

Since in the U.S. all debts can be repaid with USDs, the BTC debt is at the BTC/USD value from back in September when the incident occurred.  BitFloor is actually making good progress on repaying the $210K USD (wild guess from memory) that was owed.    For anyone hoping to receive the number of bitcoins on "hold", um ... ya.  Since those 24K BTC are now worth over $2 million, about the only hope for that size of repayment would be if BitFloor were to score somehow like through an acquisition or something like that.

[DeathAndTaxes]

What if later on there's a countersuit against whoever brought this suit, to try to recover lost potential repayments, and the person who brought this suit is not protected by any LLC, resulting in the remaining people who did not want the initial suit getting repaid from this initial suer's personal financial holdings? Could that happen?

...

Where is Nolo when you need him?   

Exactly.  That is above my paygrade.  This is one of those questions where if you ask 3 lawyers you will get three different answers.  Ultimately it gets decided in court.

[bb113]

Bitfloor has paid out excess operating capital on a quarterly basis so I doubt you are getting more there.

Since in the U.S. all debts can be repaid with USDs, the BTC debt is at the BTC/USD value from back in September when the incident occurred.  BitFloor is actually making good progress on repaying the $210K USD (wild guess from memory) that was owed.    For anyone hoping to receive the number of bitcoins on "hold", um ... ya.  Since those 24K BTC are now worth over $2 million, about the only hope for that size of repayment would be if BitFloor were to score somehow like through an acquisition or something like that.

That's fine, but legal responsibility is not social responsibility. Also, thats 2 mil now. The exchange rate may drop sometime in the future.

[UNOE]

I'm pretty happy I got a payment.  I just hope bitfloor changes the fee's to BTC rather than USD.  I'm not to worried about the 10 year length of time.  I'm hoping bitfloor volume goes up 10 fold then we will all be paid off in 1 year and Roman with have a nice profitable exchange, that has made a name for itself with integrity of fixing a mistake.
Good Luck to you Roman hope your exchange is around for years and is a big player when btc is traded at $3000 plus USD per coin.

Lastly no way I'm selling my debt for 5% lol

[Entropy-uc]

I am just upset at the lack of communication and payouts.  He used to be so active here, now he says nothing.  He doesn't indicate a regular period of when we can expect payouts.  He doesn't show calculations of how much the site has made in revenue vs the latest payment.  Heck, he didn't even pay out anything the last few months until today.

I can sympathize with his position. He'll likely never be able to pay back the entire BTC balance, so every hour he spends conducting activities for bitfloor, he's essentially working for free.  And that will likely never change.  That would be discouraging as hell.  But it still doesn't change what happened.  He needs to be in communication of some sort, or at the very least, give regular monthly payments.

Or make sure anyone owed a govt currency is paid.. and the rest who are owed bitcoin? well that is just a made up internet token and just
never pay it. walk away and never come back.

Sure someone might sue you but I doubt it would last very long in court once the details come out that the only thing lost was some "fake
internet tokens".

I am not dissing bitcoin. I am just saying it is the most likely path for this to play out.

I would agree with you, up until FinCEN defined bitcoin as a currency.  That is a huge game changer across the board, and specifically in this situation.

[ProfMac]

What can make you satisfied?

I don't know, honestly.  There is a serious principle at stake, and Bitcoin is getting to the point where stands need to be made on ethical grounds or the system will collapse, and the bubble pointers will shout I told you so.

I offered at 30 cents on the dollar right after the "theft".  This was at a time pirate debt was trading at 0.50.  There were no takers.  People preferred Pirate's debt to Roman's. 

Since Roman has never taken any input from us, or even responded to the many viable suggestions of how he could resolve the debt, I find the whole 'Bitfloor needs your help' plea to be repulsive.  Bitfloor seized my money.

And by the way; You are all welcome for the 1% payback I forced.

After our shooting I spent a lot of time at the courthouse.  There is a lot of people watching there.  Another father lost a son in another case, and he was deeply (and justifiably) angry.  He wanted revenge.  It ate at him, and it worried everyone in the courthouse:  none of us wanted to be in any crossfire.

I wanted my daughter back.  Nothing else, only that.  I was clear that revenge would still leave her dead.

Both cases proceeded to a guilty verdict.  I was relieved that the trial was over, and I could spend time on the rest of my life, heal, find out who I was without my kid.  The other case also proceeded to a guilty verdict, with a death penalty.  That father just crumpled at the verdict:  he got what he had pursued for almost 2 years, and only when he had it did he realize it had no value to him.

Do you want Roman to be out of business?
Do you want him to be publicly humiliated?
Do you want him to be shut down?
Would you accept it if Roman is successful and repays everyone in time?

I like the idea of buying the debt.  I would make it a negotiable thing, and buy and sell it on an exchange.  It would end up in the hands of the people who can carry it, and those who have a liquidity crisis would get some liquidity now.  Bah, it sounds like I believe in markets.

[Alonzo Ewing]

According to Bitcoincharts.com, Bifloor traded nearly a million dollars in volume today.  That's a daily commission of $2,700, and over a year, that totals $1 million dollars.

Now granted, this was an unusually high volume day, and the exchange can't be expected to match today's activity every day, especially not the weekends.

So to take a more conservative estimate, over the last month, nearly $5.1 million has been traded no Bitfloor.  Over a year, that yields commisions of $184,000.

Couple these estimates with two more observations:

1) The volume on Bitfloor has been rising very fast, much faster than any of the other exchanges over the last few months.

2) There's a lot of angst over Mt. Gox's performance of late.  People are looking for an alternative.

Granted, the debt it owes is growing just as fast, but exponential spikes like this are temporary and the price will settle down soon.  As one of the people who lost bitcoins in the heist, I'm hoping volume stays strong when the price wanes.

What I'm getting at is:

Bitfloor is making some serious money, and is growing very fast.  From a cash flow perspective, it's thriving.

The next time the price settles, the best thing for both people like me who are owed bitcoins and for Shtylman is to convert the BTC debt to dollar debt.  The debt will be paid off quickly the next time the price spikes, and Shtylman will start raking in some serious profits after the debt is cleared.

[jgarzik]

It is ludicrous to demand that anyone who loses value X be repaid at value X*10.

Look at the exchange rate on the day of the hack, and return debt based on that.

[Alonzo Ewing]

I don't really want to argue about this since nobody I've seen, Shtylman included, makes your argument.  But just for the hell of it:

1) The value of the missing bitcoins has grown by X*10.  That's a huge difference in what I'm missing.  For me personally, if those coins hadn't been stolen, I'd be contemplating retirement right now.  It's like a fork in my existence that decides what kind of life I will have.

2) Shtylman made the decision to allow cash withdrawals after the heist.  He could've said that everyone who had funds on the exchange, both dollars and BTCs, would take a haircut.  But he made a clear differentiation between cash holders and BTC holders.  He let cash holders withdraw their funds while BTC holders would
have nothing in their accounts.  By that decision, he's owes us BTCs, not cash.

3)  As I said originally, it can work out for all parties involved, Shtylman included, if the next time there's a stabilization in prices, he converts the BTC debt to dollar debt.  Everyone benefits in that scenario provided Bitcoin flourishes in the future (and if it doesn't, everyone, Shtylman included, loses whether or not the debt is paid back).

It is ludicrous to demand that anyone who loses value X be repaid at value X*10.

Look at the exchange rate on the day of the hack, and return debt based on that.

[malevolent]

Wouldn't it be wiser to peg the debt to USD value at the time of the hack? I understand not everyone would like it but that's pretty much the only way the debt can be repaid and it is done this way on another exchange that lost money (bitmarket.eu).

[Alonzo Ewing]

Thing is, I don't believe that's true.

Just as an example, there were about 24K BTCs stolen.  If the exchange were to stabilize at today's volume (6,500 BTCs), then every day, it would earn in commission 19.5 BTCs.  That would mean 3.37 years to pay off the BTCs if he converted his commissions to BTCs at the end of each day.  Obviously, that doesn't include operating costs, and today's volume may not stay constant, etc.

But I can wait 4 years.  

It might even be less time if the BTC debt is converted to dollar debt and the price keeps rising.

Shtylman started the exchange 1 year ago.  He could pay the debt off in 4 years.  Imagine starting a startup, and not earning much for the first 5 years, but then earning millions after that.  Wouldn't that work for you?  That's the situation he's in.  (A simplified scenario, obviously).

So far I haven't even talked about outside investors, but that's a way to pay off the debt even faster, whether via equity or bonds.  There are multi-million dollar investment houses looking for a way to get on the Bitcoin trade without enough liquidity at the exchanges to get on board.  Buying equity or debt in Bitfloor on a 3-4 year horizon might be an attractive alternative.

... but that's pretty much the only way the debt can be repaid....