Should Giga be tagged as a scammer?

[conspirosphere.tk]

Background:
https://bitcointalk.org/index.php?topic=75802.msg1353074#msg1353074

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[Daily Anarchist]

I vote for scammer tag. You don't go into something with somebody and then change the rules on them and make them jump through a bunch of hoops to get their money back.

[Bitcoin Oz]

If he has the list of shareholders and refuses to pay them back as per the original contract then yes.

[BTCHero]

If you were in his position (well known, large amounts of money) and everyone had some 3 letter agency (IRS, FBI, and SEC) after them would you cover all of your bases in a similar manner?  Bitcoinland isn't the same as it used to be, this isn't free for all anonymous fest anymore.

So I vote No.

But I also say that's really shitty maaaannnnn.

[matthewh3]

If you were in his position (well known, large amounts of money) and everyone had some 3 letter agency (IRS, FBI, and SEC) after them would you cover all of your bases in a similar manner?  Bitcoinland isn't the same as it used to be, this isn't free for all anonymous fest anymore.

So I vote No.

But I also say that's really shitty maaaannnnn.

I'm sure he could have set up a third party to proxy all the shareholders who couldn't submit that info if he wanted to but the greed of keeping more of his asset for free which was paid for by investors kicked in.  The third party could even list all those shares on - https://btct.co

[Martin666]

This was the old contract:

Hello fellow bitcoiners,

Off the back of the glbse 2.0 release and with a soon to be influx of mining equipment, I am proud to release the first and ONLY 5Mh/s perpetual mining bond.

Introduction:
Mining assets are becoming extremely common on the GLBSE. We have companies that offer ownership of hardware, bonds that correlate to actual hash rate. But overall nothing too exciting, too large, or too profitable.

Until now.
Introducing Gigamining! http://gigamining.com/

The ONLY 5Mh/s perpetual mining bond.

The first bond to offer more than 2 Mh/s per bond, and run by a name you know has the hashes to back it up.

Summary:
There will be a total of 10,000 bonds issued, with each bond worth a massive 5 Mh/s.

During the initial offering of 1000 bonds the 500 bonds remaining will be sold on 4/10/2012, they will be sold for a cheap 1 BTC. All maintenance free.

Bulk pre-sales of 100 or more units can be made at the 1 BTC price BEFORE the IPO on 4/10. PM me to get started.

Each bond will pay 100% of PPS earnings every 7 days.

The bond will never expire.

I reserve the option to repurchase bonds at 105% of the highest traded price over the last 15 days.

About Me
Most of you know who I am, most of you know I have the ability to deliver this kind of power. I'm not going anywhere any time soon, so trust that your coin is safe, and doing its best work for you, here. If you have any questions, ask them in the thread.

Where is 50Gh going to come from?
- I currently run 33Gh in GPUs (undervolted and underclocked to 26.5Gh for the summer)
- I also run 11 Butterfly Labs singles @ 9.1Gh
- Soon 4 mini rig boxes will arrive with a total of 100Gh of mining capacity.

You can see the farm mining at anytime at http://gigamining.com/mgpumon/

Best,
gigavps

thx theymos: https://bitcointalk.org/index.php?topic=75802.1280

He cannot just change the mining contract in his favours !
Thus the contract is void and he should repurchase bonds...

[matthewh3]

I agree he should offer to buy them back.  Just plain old stealing them shows how much of a scam it is.

[DannyM]

If he has the list of shareholders and refuses to pay them back as per the original contract then yes.

It isn't possible to buy out the shareholders per the original contract, because that specified the highest traded price, which doesn't exist, as the basis. Unless you want to take the tiny value based on the mpex price.

[Bitcoin Oz]

If he has the list of shareholders and refuses to pay them back as per the original contract then yes.

It isn't possible to buy out the shareholders per the original contract, because that specified the highest traded price, which doesn't exist, as the basis. Unless you want to take the tiny value based on the mpex price.

Now you know why I avoid investing in such bonds 

[augustocroppo]

(...)

Each bond will pay 100% of PPS earnings every 7 days.

The bond will never expire.

(...)

Request for claims

http://gigamining.com/claims.html

These agreements were offered and subsequently traded on www.glbse.com.  As you may be aware, www.glbse.com has suspended normal operations.  It is the intention of VPS to comply with its obligations pursuant to these agreements to the extent consistent with U.S., international, and local law.  While VPS is not aware of any current regulatory action involving www.glbse.com or itself, it is clear that trade in “bitcoins” is attracting increased regulatory and taxation scrutiny.  Accordingly, VPS has retained the Law Offices of Carlos M. Fleites, to resolve such outstanding agreements in a lawful manner.

If the original contract specify the instrument as "bond", then the request for claims is void. The request for claims is treating the Gigamining's financial instrument as "agreement".

[SAC]

(...)

Each bond will pay 100% of PPS earnings every 7 days.

The bond will never expire.

(...)

Request for claims

http://gigamining.com/claims.html

These agreements were offered and subsequently traded on www.glbse.com.  As you may be aware, www.glbse.com has suspended normal operations.  It is the intention of VPS to comply with its obligations pursuant to these agreements to the extent consistent with U.S., international, and local law.  While VPS is not aware of any current regulatory action involving www.glbse.com or itself, it is clear that trade in “bitcoins” is attracting increased regulatory and taxation scrutiny.  Accordingly, VPS has retained the Law Offices of Carlos M. Fleites, to resolve such outstanding agreements in a lawful manner.

If the original contract specify the instrument as "bond", then the request for claims is void. The request for claims is treating the Gigamining's financial instrument as "agreement".

Better quote it before it disappears.

Hope to catch some. How will this work ? Highest bids first ? Looks like there are around 120 bids atm on GLBSE.

Hi Turbor,

I have specifically reserved 500 bonds for issue on Tuesday. It would be my recommendation to place a bid on GLBSE before Tuesday.

Best,
gigavps

Edit: And now I think more about that it is a fraudulent legal document as he surely knew it was bonds he was offering up as it says in his own words I quoted.

[usagi]

Background:
https://bitcointalk.org/index.php?topic=75802.msg1353074#msg1353074

No he should not, and this is also why the scammer tag for Nefario is unwarranted. As it turns out, because of pirate and the actions of certain other people who like to flaunt themselves on the internet as "brokers" and "exchange operators", certain things are -- right now -- under review by official regulatory commissions around the world.

Like it or not, it does not matter what YOU think. If, say, Gigavps was ordered by a lawyer to do something, or Nefario was ordered by a lawyer to do something (BTW, Nefario did in fact make his lawyer's contact info public so there is no excuse for not checking this); then it is not under their control to prevent such action from occurring; Further, any party such as Theymos (unfortunately) who desires business to carry on as usual is only prolonging the inevitable.

I guarantee you, I say it twice, I guarantee you; the people who gave Nefario and may likely give Gigavps a scammer tag will one day come under the same legal pressure in one way or another if they remain involved in the "bitcoin securities business". And then what will they do? They will not give themselves scammer tags; They will simply remove the scammer tags for people like Nefario (and maybe Gigavps). ALL current exchange operators, including those who make several thousand dollars a month, are small peanuts, and will come under this pressure.

If you want to make bitcoin grow get the fuck out of gray areas like securities and stuff like tor and silk road. If you don't, the ONLY thing you will accomplish is to destroy bitcoin. And a scammer tag for Gigavps will become meaningless bullshit.

If Gigavps gets a scammer tag for stopping now, would you have given him a scammer tag if he had to stop for being thrown in jail? Legal pressure people. Get with the program.

[Daily Anarchist]

Background:
https://bitcointalk.org/index.php?topic=75802.msg1353074#msg1353074

No he should not, and this is also why the scammer tag for Nefario is unwarranted. As it turns out, because of pirate and the actions of certain other people who like to flaunt themselves on the internet as "brokers" and "exchange operators", certain things are -- right now -- under review by official regulatory commissions around the world.

Like it or not, it does not matter what YOU think. If, say, Gigavps was ordered by a lawyer to do something, or Nefario was ordered by a lawyer to do something (BTW, Nefario did in fact make his lawyer's contact info public so there is no excuse for not checking this); then it is not under their control to prevent such action from occurring; Further, any party such as Theymos (unfortunately) who desires business to carry on as usual is only prolonging the inevitable.

I guarantee you, I say it twice, I guarantee you; the people who gave Nefario and may likely give Gigavps a scammer tag will one day come under the same legal pressure in one way or another if they remain involved in the "bitcoin securities business". And then what will they do? They will not give themselves scammer tags; They will simply remove the scammer tags for people like Nefario (and maybe Gigavps). ALL current exchange operators, including those who make several thousand dollars a month, are small peanuts, and will come under this pressure.

If you want to make bitcoin grow get the fuck out of gray areas like securities and stuff like tor and silk road. If you don't, the ONLY thing you will accomplish is to destroy bitcoin. And a scammer tag for Gigavps will become meaningless bullshit.

If Gigavps gets a scammer tag for stopping now, would you have given him a scammer tag if he had to stop for being thrown in jail? Legal pressure people. Get with the program.

I completely understand this sentiment. But I disagree with it. Here's why:

Nefario wrote many posts proclaiming that his operation could withstand full-frontal attack by the state. He didn't beat around the bush at all when it came to clearly stating that GLBSE was an underground operation, the state be damned. Gigamining also did business on a very grey market site. It was clear to everybody involved that this was a non-state sanctioned enterprise. So, when they go to the state and the clients get F'ed it completely warrants the scammer tag.

If a business starts off in the white market then it's expected to be involved with the state. BitInstant is a good example of this. That's totally white market. I expect them to get involved with lawyers and such.

The Silk Road I absolutely do not expect to get involved with lawyers. I also think, and I think most would agree, that GLBSE and Gigamining were non-lawyer type businesses. So when they turn to them all of a sudden I think it deserves the scammer tag.

[Bitcoin Oz]

The reason I agree with the post above is that it could indeed be used to run a long con. Simply setup an illegal/grey op then when the time comes to pay up you simply visit a lawyer and your clients will be screwed because they signed up under a false assumption and cant get their funds back without incriminating themselves.

Nefario/Giga et al  going to the state is as retarded as DPR going to them.

[Deprived]

Background:
https://bitcointalk.org/index.php?topic=75802.msg1353074#msg1353074

No he should not, and this is also why the scammer tag for Nefario is unwarranted. As it turns out, because of pirate and the actions of certain other people who like to flaunt themselves on the internet as "brokers" and "exchange operators", certain things are -- right now -- under review by official regulatory commissions around the world.

Like it or not, it does not matter what YOU think. If, say, Gigavps was ordered by a lawyer to do something, or Nefario was ordered by a lawyer to do something (BTW, Nefario did in fact make his lawyer's contact info public so there is no excuse for not checking this); then it is not under their control to prevent such action from occurring; Further, any party such as Theymos (unfortunately) who desires business to carry on as usual is only prolonging the inevitable.

I guarantee you, I say it twice, I guarantee you; the people who gave Nefario and may likely give Gigavps a scammer tag will one day come under the same legal pressure in one way or another if they remain involved in the "bitcoin securities business". And then what will they do? They will not give themselves scammer tags; They will simply remove the scammer tags for people like Nefario (and maybe Gigavps). ALL current exchange operators, including those who make several thousand dollars a month, are small peanuts, and will come under this pressure.

If you want to make bitcoin grow get the fuck out of gray areas like securities and stuff like tor and silk road. If you don't, the ONLY thing you will accomplish is to destroy bitcoin. And a scammer tag for Gigavps will become meaningless bullshit.

If Gigavps gets a scammer tag for stopping now, would you have given him a scammer tag if he had to stop for being thrown in jail? Legal pressure people. Get with the program.

You fundamentally misunderstand the nature of the relationship between someone and their lawyer.

A lawyer does NOT "order" their client to do anything.  A Judge "orders".  Law Enforcement or Regulatory bodies may "order".  A lawyer "advises".

A lawyer only tells you what they advise you to do - explaining the risks and benefits of doing (or not doing) it.  Where you reject that advice (and do otherwise) they may (especially in criminal cases) ask you to sign that statement that you are acting contrary to their advice.  That's to protect them in case you subsequently try to claim you didn't receive proper representation.

Dont know where you got the impression from that the lawyer orders the client - it's actually the other way round.  The client instructs their lawyer what to do, the lawyer advises the client on what they believe the client SHOULD do.  In fact lawyers very much go out of their way to make plain they are NOT ordering a client to do something.

Which isn't to say that it's a good idea to go against your lawyer's advice of course.

Where there's an issue in respect of giga's behaviour is NOT that he may be having to take certain steps to protect himself and comply with laws/regulations.  It's that he appears to be attempting to misrepresent the past - in his own interests and against those of the parties with whom he entered into agreements.  Very specifically (for one thing) it is apparent that when the agreement was offered there was no mention of it being by an LLC - yet now he appears to be claiming (via his lawyer) that all agreements were with the LLC rather than with himself personally.  That has significant impact on the assets again which other parties have claim should he fail to honour the agreement.

There's no basis in law (and certainly no legal requirement to) misrepresent the nature of an agreement you entered into to avoid inconvenience now.  If you were wrong to make the agreement - then that's fine: sort out the mistakes, work to minise damage to both parties etc.  But don't just start lieing about what was actually agreed - whilst that MAY give you a better chance of avoiding SOME problems (by avoiding admitting to things) it's dishonest and deceitful.

At root the complaint against giga would be that by his actions he's putting his own self-interest above honouring his commitment to those he entered into agreements with.  Which is essentially what ALL scammers do - just in most cases that self-interest is "I want the money" rather than "I don't want problems with LE/SEC".

If you intentionally make it impossible (or impractical, or unreasonably costly) for your investors to get what was promised to them for reasons of self-interest then that's scamming just as much as if you vanished with their funds.  That's what seemed to happen with nefario - his lawyer advised him (NOT ordered him) that he should close down GLBSE in HIS interests and he did so, in the process (apparently - I've not seen what was agreed between him/the other GLBSE shareholders) breaking agreements he'd made with others here.

Scammer tag is (or should be) awarded because you choose not to honour agreements you made.  If I enter into agreement with you (by you I mean whoever - not usagi specifically) and you don't keep your end of the deal then whatever loss is caused to me is unchanged whether you were advised by a lawyer to break the agreement or not.  If there's good reasons why it would cost you to keep the deal then, frankly that's your problem and shouldn't be mine.  Giga should have thought about that BEFORE offering to sell unlicensed securities that were designed to make him significant profit and marginal (if any) profit for investors.  This was NEVER a share - but a bond (of sorts).  His obligations were crystal clear - and neither the risks (which he's now apaprently suffering from) or the rewards (which were only ever really going to him) were split with investors.

All that said, I don't believe he deserves a scammer tag (yet).  If he acknowledges that the requests for ID etc are to cover HIS arse (and aren't necessary for him to meet his obligations) and agrees to cover costs incurred by investors in providing such documentation then I don't see any real harm being done.  Though he still has to address the issue of those who are unwilling (or unable in the case of minors) to provide such information.  If his assertion is that the information is necessary for him to fulfil the agreement (and someone won't provide it) then he really only has two options - cancel the agreement and refunds all funds received (less dividends paid) on the basis that the investor won't provide information necessary to activate the agreement OR report it to the relevant LE/regulatory authorities (on suspicion that the refusal is for AML-related reasons).  You (he) can't argue that the information is somehow NECESSARY for the agreement to be transacted - and then in the next breath say that you want to keep YOUR entitlements under the agreement if preconditions for the agreement to be valid aren't met.

He seems to want to have his cake and eat it.  He needs to choose which - as he's not entitled to both.

[usagi]

You fundamentally misunderstand the nature of the relationship between someone and their lawyer.

No, not really.

A lawyer does NOT "order" their client to do anything.  A Judge "orders".  Law Enforcement or Regulatory bodies may "order".  A lawyer "advises".

Lol whatever, if you have a lawyer tell you to stop doing something or you will go to jail and you ignore him, you're a friggen idiot. Well, you're a friggen idiot for other reasons but whatever.

Where there's an issue in respect of giga's behaviour is NOT that he may be having to take certain steps to protect himself and comply with laws/regulations.  It's that he appears to be attempting to misrepresent the past - in his own interests and against those of the parties with whom he entered into agreements.  Very specifically (for one thing) it is apparent that when the agreement was offered there was no mention of it being by an LLC - yet now he appears to be claiming (via his lawyer) that all agreements were with the LLC rather than with himself personally.  That has significant impact on the assets again which other parties have claim should he fail to honour the agreement.

You are right and that's a good point. You surprised me by noticing this. If he is now stating he incorporated/whatever with a lawyer and didn't reveal this in his contract then he committed fraud by issuing the original contract while never intending to keep it in the first place. In that case, he deliberately misled investors for financial gain and would be guilty of fraud. Give him the scammer tag.

Oops, sorry giga. You earned this one.

There's no basis in law (and certainly no legal requirement to) misrepresent the nature of an agreement you entered into to avoid inconvenience now.  If you were wrong to make the agreement - then that's fine: sort out the mistakes, work to minise damage to both parties etc.  But don't just start lieing about what was actually agreed - whilst that MAY give you a better chance of avoiding SOME problems (by avoiding admitting to things) it's dishonest and deceitful.

Yep. However, in this case he claimed he was using his lawyers from the very beginning. This was never revealed and it obviously invalidates certain clauses from his contract. This means he intentionally deceived his investors for financial gain.

All that said, I don't believe he deserves a scammer tag (yet).

Based on what you said above I think he does. He issued a contract which he intended to break. There is no way he ever intended that contract to stand; he lied in the contract, he had planned to go to his lawyer at first opportunity from the very beginning.

[cunicula]

You are right and that's a good point. You surprised me by noticing this. If he is now stating he incorporated/whatever with a lawyer and didn't reveal this in his contract then he committed fraud by issuing the original contract while never intending to keep it in the first place. In that case, he deliberately misled investors for financial gain and would be guilty of fraud. Give him the scammer tag.

Oops, sorry giga. You earned this one.

How quickly they turn on each other. 

[PsychoticBoy]

Gigavps definitely deserves a SCAMMER TAG.

Gigavps got his shareholders data but has unreasonable claim requirements, even worse than nefarios initial claim procedure.
This should be enough to get gigavps scammer taged.
So my request is: scammer tag gigavps, because his way of dealing with this issue is just a way to avoid any payment to shareholders.


BTW: the letter from his Lawyer isn`t even signed so for all we know, gigavps wrote that letter himself  Just to "cover" his ass!

Greetz

[Deprived]

You fundamentally misunderstand the nature of the relationship between someone and their lawyer.

No, not really.

A lawyer does NOT "order" their client to do anything.  A Judge "orders".  Law Enforcement or Regulatory bodies may "order".  A lawyer "advises".

Lol whatever, if you have a lawyer tell you to stop doing something or you will go to jail and you ignore him, you're a friggen idiot. Well, you're a friggen idiot for other reasons but whatever.

You just don't get it.

Your lawyer does not "tell you to stop doing something".  They may, however advise you to stop doing something.

You're using "order" and (this time) "tell" when you should use "advise" or "recommend". As a (professed) English teacher I assumed you understood those words have significantly different meanings - and hence that by choosing the words you used you were demonstarting a lack of understanding of the nature of the lawyer/client relationship.

On your later point about it not being smart to ignore your lawyer's advice, that could be why I said "Which isn't to say that it's a good idea to go against your lawyer's advice of course.".

It may seem like niggly little point by me to argue about semantic detail.  But it's a pretty major point.  Too many people (not just on this forum) claim that they're doing something because their lawyer instructed them to do it or told them to do it - attempting to portray the lawyer as the decision-making person and so shift some (or all) of the blame for the decision away from them.  In reality, lawyers advise that you do X for reason Y - attempting to claim that the lawyer ORDERED you to do X (and not disclosing Y) is factually incorrect as well as being deceptive.

Someone says "My lawyer ordered me to do X" - it gives impression they're helpless and have no option.

Person says "I'm doing because X because my lawuer advised me that if I didn't I'd suffer Y" then it becomes plain that THEY made the choice - and that they did so because they didn't want to suffer Y.  i.e. it becomes obvious they made a conscious decision to act in their own self-interest.

The latter is what actually happens -the former is what the nefarios/gigas of the world want everyone to believe - as it doesn't paint them in such a bad light.

[usagi]

You just don't get it.

I hear they're taking auditions for peewee herman 3. They need someone to play an overweight argumentative looser that lives with his parents and likes to argue like a 3 year old cuz Mark Holton is too old now.

You did well pointing out some facts on this Gigamining case. Now stop polluting the forum and let the mods do their job.