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Author Topic: OPEN LETTER to Donald, Patrick & Amir RE: Bitcoinica  (Read 26512 times)
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November 01, 2012, 03:17:37 AM
 #181

http://www.business.govt.nz/companies/learn-about/closing-a-company/business-in-difficulty/liquidation/what-happens-during-a-liquidation

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Transisto
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November 01, 2012, 06:41:41 AM
 #182


Pretty much sum up how I feel looking at Bitcoinica.

How were these liquidators appointed ?
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November 01, 2012, 06:52:37 AM
 #183

Instead, Amir posted the source code causing additional money to be stolen,  and no one has received any of their money back yet.

Roger, I've been extremely critical of the Intersango guys and the way they've handled this clusterfuck for a very long time but even I don't buy the idea that the Bitcoinica MtGox account was breached because Amir leaked the code.  Are you telling me that you seriously believe Zhou's explanation of the MtGox breach and how someone who just happened to have his credentials (but who doesn't read this forum) also just happened to come across the leaked code and then also happened to think that the MtGox API keys might be a password to something else?  Seriously?  Because given Zhou's ridiculous story about the MtGox breach, I wouldn't even trust his explanation of the Rackspace breach.

There are plenty of legitimate grounds on which to criticise the way that Donald, Patrick and Amir have handled the whole Bitcoinica disaster.  Let's not damage our own credibility by pretending to believe in the absurd.



You may be right that Amir open sourcing the code did not lead to the second hack,  but it did destroy the one asset that Bitcoinica still had that could be sold to pay back all the creditors.  Amir destroyed that option when he posted the source code.

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November 01, 2012, 11:51:00 AM
 #184

You may be right that Amir open sourcing the code did not lead to the second hack 

Why are we even considering whether it did or it didn't in this context ? Fact of the matter is the guy published the code, fact of the matter is the code did contain enough information that a person could have done what Zhou alleges (improbably) to have been done. This is absolutely sufficient to hold the three stooges to the fire as if in fact they did it.

The only place where consideration of whether Amir publishing the code lead to the second hack or didn't lead to the second hack finds its place is when we judge Zhou, in the sense that he doesn't get off the hook just because we're spit-roasting Amir & co. But other than that, he who left the safe keys on the urinal at the corner bar pays for all items stolen and all damages. Irrespective of whether the thief is ever found, prosecuted, tried, convicted, ordered to make reparations, actually makes reparations etc.

It's probably also worth noting that the idiot releasing the broken, defective, untrustworthy, malfunctioning, general piece of shit codebase has the unfortunate effect of creating this crap.

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November 01, 2012, 05:25:18 PM
 #185


It's probably also worth noting that the idiot releasing the broken, defective, untrustworthy, malfunctioning, general piece of shit codebase has the unfortunate effect of creating this crap.

Great, now my brain hurts. How could.... How would one.... This is too absurd.
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November 01, 2012, 05:34:43 PM
 #186

As alluded to elsewhere, Wendon Group's petition to the New Zealand High Court to commence formal liquidation was approved on Nov 1. This comes after significant effort and legal expense for which Wendon Group has donated 100% of the cost.

The court appointed the principals of PKF Corporate Recovery & Insolvency to administer the liquidation. It will be their job to return funds to customers to the full extend possible. They will require the cooperation of MtGox and Bitcoinica's managing partners to accomplish this.

My expectation is that the liquidator will reclaim all records and assets, including the Bitconica.com domain name held by Mr. Strateman and make further updates available there.

Among Bitcoinica's managing partners, Patrick Stratemen has been the least uncooperative. As he makes good on his promise to assist the liquidator, please extend him the degree of respect he deserves.
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November 01, 2012, 05:40:21 PM
 #187

Will someone please explain how the liquidation might work? What documentation, proof, etc. will someone need to make a claim?
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November 01, 2012, 07:50:50 PM
 #188


Among Bitcoinica's managing partners, Patrick Stratemen has been the least uncooperative. 



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November 01, 2012, 08:50:30 PM
 #189

Will someone please explain how the liquidation might work? What documentation, proof, etc. will someone need to make a claim?

I expect that the liquidators will clarify the kind of supporting evidence they require when they make contact with creditors and/or post notice of the liquidation on the Bitcoinica website.  The first creditors' report - which by law must be completed within 25 business days of the court appointing the liquidator - will contain a notice which advises creditors of the deadline for lodging claims and a claim form as well as information on how to contact the liquidators.  

It is up to the liquidator whether they require you to submit supporting documents when you first make your claim or whether they just require a description of those documents when you make your claim and ask you to submit the documentation at a later time when it's more apparent whether a distribution is likely.  Make sure that you read the claim form carefully and understand whether or not you need to submit supporting documents with your claim.

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You may be right that Amir open sourcing the code did not lead to the second hack,  but it did destroy the one asset that Bitcoinica still had that could be sold to pay back all the creditors.  Amir destroyed that option when he posted the source code.

That presumes Bitcoinica LP actually owns the IP and the Bitcoinica domain, which 1) may not be the case (I sure as shit wouldn't have set it up that way) and 2) assumes that there is no secured interest in those assets or that anyone holding a secured interest would have waived that interest had those assets not been devalued (which ends up being a he said/she said scenario).  

That the assets are now devalued is beyond doubt.  That they would have been available to satisfy the claims of all creditors is a matter of conjecture.  

On another note, unclescrooge is using the Bitcoinica source code for Bitfinex.  Either he's using it without permission of the IP owners or he's using it under licence.  Either way, some return to the liquidation estate for its use is in order.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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November 02, 2012, 12:22:52 AM
 #190

I don't think it's the time to figure out who's fault it is for everything.

I'd like to concentrate on understand what the liquidation process entail and I'm still not even sure it's the best way to deal with this,  If creditors, Intersango, Tihan, and Zhou cannot talk and come to an agreement on who's responsible for what and process payout to their best, I don't see how an appointed 3rd party, no matter how independent and competent can achieve better results.

I don't know in what fantasy dream many of you guy think you're living in, I for one learned not to expect much of our judicial systems.  

I can accept some loss but I will seek revenge if being lied at for months on end.

There is simply no way some of you will get absolved from this without a full disclosure.

I've had a few back and forth between Tihan and Patrick, each claiming the opposite of the other and trying to convince me the other was lying.

There was supposedly 62101 BTC of stolen fund to be covered by LP,  43554 BTC for Linode hack + RACKSPACE 18547 BTC = 62101,
Tihan confirmed he only paid 25000 of this, leaving another 37101 BTC missing.  That was supposedly the reason why Patrick didn't wanted to pursue returning funds anymore (unless funds were covered).
Patrick say even that this 25k BTC return is complete BS.  Tihan couldn't provide proof of transfer, stating there is no trace of inner Mtgox transfer.

Tihan said he doen't want to circulate any estimates that might not be strictly accurate but the full details at his disposal will be made available to the court's appointed liquidator when the time comes. According to him , Given the legal sensitivities, that can be their only official communication channel going forward.
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November 02, 2012, 01:12:48 AM
 #191

If creditors, Intersango, Tihan, and Zhou cannot talk and come to an agreement on who's responsible for what and process payout to their best, I don't see how an appointed 3rd party, no matter how independent and competent can achieve better results.

Whether or not liquidation is the best option, it was literally the only remaining option available given the inability of the general and limited partners to come to an agreement about how to discharge Bitcoinica's financial obligations and wind up the partnership.  The process which a liquidator must follow is laid down by law, so the issues of contention which plagued the DIY process which was implemented after the Rackspace intrusion are irrelevant.

The only estimates which matter at this point are those given by the liquidator and even those will inevitably change throughout the liquidation process.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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November 02, 2012, 03:51:50 PM
 #192

Transisto, that is an understandable misinterpretation of what I said but not 100% accurate. It is for this reason that we will be communicating with the liquidator on an factually-verifiable basis going forward.
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November 03, 2012, 02:00:24 PM
 #193

I

I will seek revenge if being lied at for months on end.


Hope I can somehow be helpful for the revenge. I want revenge, too. The bitcoin economy cannot let scammers run away with people's money so easily. After the liquidation, we will know better about whom should be blamed.

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November 04, 2012, 06:44:17 AM
 #194

by the way, for the liquidation, is there a need to resubmit the claims or do they still have access to the submitted claims ?

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November 04, 2012, 07:24:25 AM
 #195

maybe if you have usd dollars there you might eventually see something, but if you only had btc which most people did as it paid more interest I guarantee you won't get anything
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November 04, 2012, 10:47:00 AM
 #196

maybe if you have usd dollars there you might eventually see something, but if you only had btc which most people did as it paid more interest I guarantee you won't get anything

Actually, it was USD that paid more interest.
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November 04, 2012, 10:03:20 PM
 #197

by the way, for the liquidation, is there a need to resubmit the claims or do they still have access to the submitted claims ?

The liquidator should have access to what's been submitted already, but as claims against an estate in liquidation are required to be made in a prescribed form laid down in the Companies Act, I expect that creditors will need to submit a fresh claim to the liquidator. 

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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November 06, 2012, 09:36:25 PM
 #198

I don't know what qualification are required to be a liquidator but I wonder if the complexity of the case require we make an effort to find better.
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November 06, 2012, 11:16:39 PM
 #199

I don't know what qualification are required to be a liquidator but I wonder if the complexity of the case require we make an effort to find better.

I checked the qualifications of the two appointed liquidators.  One is a chartered accountant (over this way, liquidators are almost always chartered accountants) who also holds a law degree and the other worked for the Official Assignee's office for over 10 years.  They're well qualified.

As liquidations go, this one isn't especially complex.

While creditors can apply to the court to have a liquidator replaced, you need solid reasons for asking the court to replace the liquidator and nothing involving the High Court comes cheap.  One risk of trying to get a liquidator replaced is the Court appointing the Official Assignee as liquidator.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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November 13, 2012, 06:35:16 PM
 #200

I don't know what qualification are required to be a liquidator but I wonder if the complexity of the case require we make an effort to find better.

I checked the qualifications of the two appointed liquidators.  One is a chartered accountant (over this way, liquidators are almost always chartered accountants) who also holds a law degree and the other worked for the Official Assignee's office for over 10 years.  They're well qualified.

As liquidations go, this one isn't especially complex.

While creditors can apply to the court to have a liquidator replaced, you need solid reasons for asking the court to replace the liquidator and nothing involving the High Court comes cheap.  One risk of trying to get a liquidator replaced is the Court appointing the Official Assignee as liquidator.

Thanks for filling in the blanks along the way.



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