Nefario

[tvbcof]

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Since Nefario refuses to give complete details about his legal concerns and he has been acting strangely, I feel that it is somewhat possible that Nefario is working under some sort of plea bargain and is gathering IDs for future prosecution.

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Though I highly doubt that it has been the intent, I sense the Bitcoin has evolved into a highly efficient (relatively speaking) honeypot for 'marking up' individuals with interesting things going on...both in the past and probably more importantly, in the future.

AML-grade data for as many participants in the economy as possible is probably a pretty high-value item.  I suspect it could act as a 'get out of jail' card in the case of the OP, and likely that it acts as a 'stay in business' card for other entities (e.g., Mt. Gox.)  As others have pointed out, having the data does not mean that it is being given up to the authorities in quantity, but there is simply no way to know.  It is a certainty, however, that it is being stored somewhere and Bitcoin related enterprises as a group have an abysmal security record.

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[jasinlee]

And that FUD is having no impact on the market right now too. /sarcasm

It surprises me that Nefario has any supporters in these threads at this point, even ignoring accusations made by theymos it is obvious that he no longer has the interests of his customers/investors/friends at heart. And that would only lead me to believe he has purchased his support or has leverage on them (probably monetary). Just sayin.

Yet more FUD 

Thanks for reinforcing the point.

[matthewh3]

And that FUD is having no impact on the market right now too. /sarcasm

It surprises me that Nefario has any supporters in these threads at this point, even ignoring accusations made by theymos it is obvious that he no longer has the interests of his customers/investors/friends at heart. And that would only lead me to believe he has purchased his support or has leverage on them (probably monetary). Just sayin.

Yet more FUD  

Thanks for reinforcing the point.

Yeah this whole thread and the other three or four are just FUD.  Have you ever thought it may help some people in spreading FUD about the GLBSE (edit: Nafario) and the rest are just tolling like usual.

[jasinlee]

In the case of MPEX yes I agree. But with a kernal of truth, just the wrong person to be saying it. But in this thread, I cannot see any way in which he can profit from spreading the FUD Truth as he sees it.

[repentance]

AML-grade data for as many participants in the economy as possible is probably a pretty high-value item.  I suspect it could act as a 'get out of jail' card in the case of the OP, and likely that it acts as a 'stay in business' card for other entities (e.g., Mt. Gox.)  As others have pointed out, having the data does not mean that it is being given up to the authorities in quantity, but there is simply no way to know.  It is a certainty, however, that it is being stored somewhere and Bitcoin related enterprises as a group have an abysmal security record.

Not to mention that most places require AML/CTF/KYC information to be kept for between 5 and 7 years, so even if the entity which collected it goes out of business during that time (highly likely in the case of most Bitcoin ventures) they must still retain that information - how securely they'll store it if they've gone out of business is an interesting question.

[Aahz]

All users coins on the GLBSE is safe and untouched.  Nafario wants to return them as soon as possible as they are a legal liability to him.  He also said he will soon have a way for asset issuers to pay dividends but not trade shares.

What, exactly, is stopping him from simply sending them all back to the accounts from whence they came?

I think he will need full legal ID to pay back coins and shares.  Otherwise he risks being charged with possible money laundering and/or funding terrorism.  Tho he won't disclose that information unless requested by the government/police.

If he needs "full legal ID" then why isn't that stated on the site?  It seems whoever is posting to GLBSE.com and whoever you're getting your info from are on different pages.

[repentance]

If he needs "full legal ID" then why isn't that stated on the site?  It seems whoever is posting to GLBSE.com and whoever you're getting your info from are on different pages.

In fact the site doesn't say that people will need to provide their username, email and BTC address in order to receive their BTC back - it says that's what's required to continue their relationship with their asset issuer.  Someone really needs to update the site so that there is no ambiguity about what's required of users.  Nefario knew this was going to happen at least a few days ago so he should have had everything ready to go immediately after the shareholders' meeting.

[theymos]

what was nefario's reasoning for closing GLBSE?

[05/10/2012 16:25:51] <nefario> what MY problem actually is
[05/10/2012 16:25:54] <nefario> 1)
[05/10/2012 16:26:00] <nefario> AML
[05/10/2012 16:26:01] <nefario> 2)
[05/10/2012 16:26:03] <nefario> tax
[05/10/2012 16:26:05] <nefario> 3)
[05/10/2012 16:26:07] <nefario> regulations
[05/10/2012 16:26:09] <nefario> in that order


[05/10/2012 16:32:52] <nefario> I don't need your approval for this, I don't have much choice

He managed to convince some of you to support him, so he must have had a good argument, what was it?

Nefario promised to start a 100% legal stock exchange after GLBSE is closed and transfer the BitcoinGlobal shares over. Clearly, this will be super successful. 

[05/10/2012 17:43:33] <shareholder 1> lets just trust nefario and gets going.

[05/10/2012 17:49:27] <shareholder 2> i truly think that if we reveal the plans to make it legit, this will turn around support in the community (at least the bright side of it) and new investments would flow if needed

[05/10/2012 18:53:41] <shareholder 2> of clourse you can do what you want, but it would be better for you and everyone to help the wind down of glbse in a clean way

Some other shareholders became resigned to GLBSE's fate and were at least somewhat convinced by Nefario's dreams of BitcoinGlobal's future.

[theymos]

This raises the question: What is the bus factor of Bitcointalk?

4-5. The database backups can be decrypted by me, justmoon, Gavin, Sirius, and Satoshi. The encrypted backups are distributed among many people.

[SebastianJu]

[05/10/2012 17:49:27] <shareholder 2> i truly think that if we reveal the plans to make it legit, this will turn around support in the community (at least the bright side of it) and new investments would flow if needed

*Irony on* Absolutely shareholder 2. So please give me the data and the remaining btc so i can prepare to invest into the new legal exchange... *Irony off*

Maybe shareholder 2 only fears that nefario realizes that no one will invest into his new exchange and keeps what he has now. So yes... lets "help the wind down of glbse in a clean way".

[theymos]

However, if Nefario is being compelled to do these things under threat of force (govt), should he still be given the scammer tag? Normally the burden of proof would be on him to prove he's under duress, but what if he's not allowed to, again under threat of force? That was one of my first concerns with the situation with Nefario/Goat, and it still is now.

Laws and regulations are a pain, and make things a lot more complicated than they need to be.

First of all, while he could be under legal pressure, I don't think that's the most likely possibility. He was spending money on hiring programmers as recently as two weeks ago. IMO it's most likely that he was just scared by his lawyer.

[05/10/2012 17:24:11] <nefario> meeting lawyer on wed. for the details

[05/10/2012 18:05:04] <nefario> xxx: we COULD go against what my lawyer says
[05/10/2012 18:05:07] <nefario> the result would be
[05/10/2012 18:05:11] <nefario> GLBSE gets shut down
[05/10/2012 18:05:16] <nefario> and I get imprisoned

It sounds to me like his TYGRR action was a response to his lawyer's concerns, not a legal order.

[05/10/2012 17:10:36] <nefario> goat had to be taken off GLBSE ASAP, codes was the quickest thing I could come up with

[05/10/2012 17:51:38] <nefario> xxx: I didn't get to talk to you about what the lawyer recommended on Goat

Even if he is under legal pressure, he took the CEO job while knowing the legal risks. The first version of the GLBSE client was called "blackMarket". I wouldn't blame him for choosing freedom over shareholder interests, but I can blame him for getting himself into this situation.

Also, assuming he's being manipulated by the government now, Nefario can't be trusted until we know the real story and we're sure he's not still being manipulated by the government.

[repentance]

Even if he is under legal pressure, he took the CEO job while knowing the legal risks. The first version of the GLBSE client was called "blackMarket". I wouldn't blame him for choosing freedom over shareholder interests, but I can blame him for getting himself into this situation.

This is just as true of those who hold equity in GLBSE - you all took the risks you took knowingly.

Nefario referred to threads in which "disaster plans" were posted.  Do you know which threads he was talking about?  Do you know why the possibility of sudden shut-down for legal reasons wasn't one of the things for which GLBSE had contingency plans given that it was a known risk?

[aura.flux]

Why does it seem like nefario is closing GLBSE just to open another "legal exchange"?

[theymos]

@Theymos Do you know someone able to access the database of glbse so that you can make a backup just in case? I dont want to hear at one time that all data is lost or something. Or that i have to join a new platform to get my shares and joining the new platform wouldnt be good for me.
Can you reveal the usernames of the glbse-shareholders? Are they reputated forummembers? Maybe they should say some words too when they know more.

As part of the "Nefario gets hit by a bus" plan, 4 of 5 shareholders selected by Nefario could maybe get Nefario's passwords and wallet if Nefario is incompetent enough to have not prevented this attack already. I already tried this route, though, and only 2-3 applicable shareholders are willing to do it.

I don't know how else you'd get the database.

I don't want to publish the shareholder list. Many people who opposed Nefario would like to remain anonymous, and even the people who supported him are decent enough people who I don't want to "out". Some of the shareholders did comment in this thread without saying that they're shareholders.

[gweedo]

I don't want to publish the shareholder list. Many people who opposed Nefario would like to remain anonymous, and even the people who supported him are decent enough people who I don't want to "out". Some of the shareholders did comment in this thread without saying that they're shareholders.

I really hope the people posting in here can disclose that they are share holders, it is only right.

[theymos]

I want for Theymos to step up, and agree to manage the dispersal of customer funds.  He has shown himself to be far more forthright than mr. Nef, and is treasurer after all.  Giving over the treasury funds to Nef now after all that has happened is highly unlikely to result in a happy ending for us users IMO.

Theymos, I understand that your position sucks, and you just want out of it, like you did even before this whole situation exploded.  Unfortunately, you're our only hope, and the funds that you hold are valuable leverage.

Please do not give our monies over to Nefario!  Instead, demand a copy of the user database, and manage the dispersals yourself, as a proper Treasurer should.

The shareholders voted that I should send the funds to BitcoinGlobal's accountant. The only reason I haven't yet is that the accountant hasn't sent me an address. Even if I wanted to defy the shareholders, Nefario refuses to give me the database. It's unlikely that I could get the database in any reasonable amount of time.

If there's a lot of public noise about this very soon, maybe I could get a motion passed to keep the ~800 BTC in user funds with me.

[theymos]

Theymos, can you tell us whether you control the ~675 BTC currently in GBLSE address 1FX22c76vybHJSJdCCjKHDHhcMDhDX87nw, or if Nefario does (or none of the above)?

I am seeing conflicting information.

I hold ~800 BTC in "anonymous" user funds. It doesn't belong to anyone in particular. If I had the GLBSE user database, I would send this BTC proportionally to all GLBSE users.

Nefario has, I would guess, 4000-8000 user BTC in total.

[repentance]

Why does it seem like nefario is closing GLBSE just to open another "legal exchange"?

That would actually have been the smart way to do it but if this had been planned there shouldn't have been any sudden closure - it should have been advertised well in advance and processes already in place for returning BTC and users dealing directly with issuers.

It's also possible that Nefario needs serious financial backers to open a legitimate exchange and knows that the current shareholders would never have approved those people buying into GBLSE (theymos mentioned that Nefario planned to issue more shares - which would have diluted the value of existing stock - but the bylaws required new investors to be approved by the existing shareholders).  He can now launch a new exchange with the backers of his choosing (although I think he's naive enough to get eaten alive by VCs).

The shareholders voted that I should send the funds to BitcoinGlobal's accountant.

By "accountant", do you mean someone with an actual accounting qualification and accounting practice who has been engaged by BG in a professional capacity?  If so, then hand the funds over - if they're mishandled by a licensed professional then people have recourse through professional indemnity insurance.

[aura.flux]

Well, from the bits of logs theymos posted, Nefario says his problems are AML, tax, regulations... I mean a person who is going to jail probably wouldn't be saying that. Anyway, bottom line my money got frozen or even worse lost. This sucks...

[theymos]

By "accountant", do you mean someone with an actual accounting qualification and accounting practice who has been engaged by BG in a professional capacity?  If so, then hand the funds over - if they're mishandled by a licensed professional then people have recourse through professional indemnity insurance.

No, the BitcoinGlobal officer in charge of accounting.