Should Giga be tagged as a scammer?

[JoelKatz]

Easy: just start paying back who is on the Nefario's list if you want be honest and consistent with your promise and past behavior. Who is not in the list, and say he should, can try his best to get things fixed with Nefario in order to get paid later, or just call the cops (the best option for everyone in this case imho). But using such cases as a pseudo-excuse to steal the assets of the most of your investors is just lame.

As you said, this process can only work if either Nefario or law enforcement is willing to participate in it. There's no evidence of either. And if law enforcement does get involved, the last thing an asset issuer will want to have done is paid out all the funds they hold to the wrong people.

I understand your frustration, but you are insisting other people do things that have huge risks to them and, frankly, don't make any sense. I would suggest pressuring GLBSE to agree to mediate a redemption process or, failing that, issue cryptographically verifiable asset holder lists so asset issuers can prove a particular person is or isn't on the list they got. You chose GLBSE to protect your ownership interest -- make them do what you paid them to do or hold them accountable.

[1715062588]

1715062588

[vrtrasura]

Giga, if Nefario released a "better" list as he JoelKatz describes would you still force us to give you all of our personal information? 

Also, since you seem intimately familiar with GLBSEs state, what exactly happened.  Who shut him down? Did those details ever really come to light?

[jamesg]

Giga, if Nefario released a "better" list as he JoelKatz describes would you still force us to give you all of our personal information? 

Also, since you seem intimately familiar with GLBSEs state, what exactly happened.  Who shut him down? Did those details ever really come to light?

Hi vrtrasura,

I have no other information that what has been released through bitcoin talk. I would like to know these answers as much as everyone else.

As to the request for claims, I'll leave the response from Quentin here also.

Best,
James

In response to some of the questions and concerns raised by some members of the bitcoin/gigamining community to the information and documentation requested in the prior posting, Virtual Processing Solutions, LLC (hereinafter VPS), wished to provide the explanation and justification for these requests.

The information requested can be broadly divided into three principal categories:

• Bitcoin payment address.
• Identity information/documentation.
• Affidavit of beneficial assignment.

There does not generally appear to be much concern over the issue of bitcoin payment addresses.  This information has been requested to facilitate ultimate payment of the bitcoins and to allow reconciliation with known outstanding obligations.

Identity information/documentation seems to be among the most controversial of the requested information.  This information is necessary for VPS to obtain and maintain for a variety of reasons, including, but not limited to, compliance with tax regulations of the US and foreign jurisdictions (both for recipients and VPS), compliance with the regulations of the US Treasury Office of Foreign Asset Control, and protection against, and remediation in the event of, fraudulent claims.

When considering these requirements, please keep several points in mind.  The triggering threshold for US IRS 1099 (or IRS 1042 for foreign residents) earnings are extremely modest (ranging from US $10 to $600 depending on the classification ultimately assigned by taxing authorities) and the ultimate value of the bitcoins from now until the close of the filing period is unknown.  It is also worth noting that, due to the nature of the contract, these proceeds could be considered interest income which can have a triggering threshold as low as US $10.

A number of foreign locations are currently under embargo by the United States, ranging from full (in the case of Cuba and Sudan) to partial (including Iran, Burma, Syria, and North Korea).  In many cases the regulations prohibit the transfer of any negotiable or liquid commodities to target countries.  In all such cases, the law establishes the clear responsibility of the transferring party to maintain a compliance program which includes, at a minimum due diligence in establishing the identity of the recipient.  Criminal violations of the statutes carry a penalty of twelve years in prison and fines of US $1,000,000 in additional to independent civil penalties of $1,075,000 per count.  

The affidavit is to provide assurance that all submitted information is true and correct, and to provide protection for VPS against fraudulent claims of assignment. It is worth noting in this matter, that prior to the shut-down of GLBSE, VPS had not maintained independent records of contract assignment, nor do unique tracking numbers for individual contracts exist.  Under such circumstances, the potential for multiple parties to claim beneficial assignment of contracts is manifest, and GLBSE cannot be counted on to provide resolution of conflicting claims or indemnify VPS in the event that the wrong party is paid.  While VPS cannot speak to the cost of the foreign equivalence of notarization (apostille), in the US, such services are available free of charge to account holders at most major US banks, and are otherwise available for minimal (US $20 approx.) fees.

It is absolutely incorrect to assert that these information and documentation requests are to avoid VPS’s obligations under extant contracts, and, in fact, the information requested is no more detailed or onerous than what is generally required to open a brokerage or bank account.

Finally, some concern has been raised that VPS is attempting to change the terms of the original contract.  This is, in fact, precisely the opposite of both the intent and effect of the efforts VPS is undertaking in this matter.  Specifically, the original contract is extremely limited in its text and terms, leaving many issues unresolved, including, most basically, who is a party to the contract (i.e. the identity of the issuer and beneficial assignee).  These omissions alone could possibly cause the contract to be unenforceable, not merely on technical grounds, but because of the practical difficulties in establishing the parties to whom payment is due.  

Further, under US law, contracts are always subordinate to the law of the governing jurisdictions (i.e. where law and contract conflict, the law prevails).  To remedy this known issue, many contracts, include clauses to allow courts to redraw contracts to conform to existing laws to prevent their wholesale invalidation due to conflict with governing law (so called “blue pencil” authorization).  No such clause exists in the written contracts at issue.  Nevertheless, VPS has deliberately chosen to attempt, at its own substantial cost, to remedy both of these limitations in the existing contract, by allowing identification of the parties post de facto, and acting as though blue pencil clauses existed to bring the terms of the contract into compliance with US and State law.  Neither of these actions is explicitly required of VPS by law, nor in VPS’s proximate financial interest, but are nonetheless being undertaken to maintain good faith with the bitcoin/gigamining community.

[vrtrasura]

Is there some way you could not pay me interest so it doesn't trigger whatever federal code you are trudging up.  I gave you money, why can't you just give it back?  It's akin to me dropping my wallet it IRL, would you give it back to me if you found it?

I should not have to give out my personal info to every asset issuer from GLBSE, they didn't do anything like that for me when I gave it to them.  If I were you, I would feel like a thief.  I understand you got a lawyer to figure out what you should do, but I seriously wonder how you feel deep down knowing you are sitting on a pile of hardware other people bought for you.   

[SAC]

but I seriously wonder how you feel deep down knowing you are sitting on a pile of hardware other people bought for you.   

He feels great that is what this whole thing was designed for you clowns paying for his hardware or did you think paying at least twice what it was worth was for your benefit.

[Monster Tent]

but I seriously wonder how you feel deep down knowing you are sitting on a pile of hardware other people bought for you.   

He feels great that is what this whole thing was designed for you clowns paying for his hardware or did you think paying at least twice what it was worth was for your benefit.

The funny part is he is claiming more clowns are lining up to buy him mining equipment!

[SAC]

but I seriously wonder how you feel deep down knowing you are sitting on a pile of hardware other people bought for you.   

He feels great that is what this whole thing was designed for you clowns paying for his hardware or did you think paying at least twice what it was worth was for your benefit.

The funny part is he is claiming more clowns are lining up to buy him mining equipment!

Yep pathetic no wonder these people get scammed.

[jamesg]

The funny part is he is claiming more clowns are lining up to buy him mining equipment!

If I didn't offer Teramining, people would say that I am going back on what I promised. Now that I'm putting the contract together, you make the comment quoted above.

Thanks for showing just how unenviable the position i'm in is.

[SAC]

The funny part is he is claiming more clowns are lining up to buy him mining equipment!

If I didn't offer Teramining, people would say that I am going back on what I promised. Now that I'm putting the contract together, you make the comment quoted above.

Thanks for showing just how unenviable the position i'm in is.

Hows that old saying go oh yeah google has it.


“Oh what a tangled web we weave, When first we practice to deceive”

[bigasic]

Im not here to intentionally defend anyone.. But can't you all see that Giga is in a damned if he does, damned if he doesn't scenario?

He's doing the best he can in a shitty situation..

AR

[dishwara]

If gigavps can pressure its asset holders to get back assets, why he cant sue Nefario for shutdown?
GLBSE shutdown caused all problem & if you are a true person, then SUE Neafrio for doing felony things.

You don't have the courage to pressure legally Nefario , but can pressure assets holders, coz THEIR MONEY IS WITH YOU by asking personal things ?

Drag Nefario to court & prove you are in the side of asset holders.

[MPOE-PR]

I like the part where you went crazy in your post.

You are not a true person, you are a duck.

[Monster Tent]

If gigavps can pressure its asset holders to get back assets, why he cant sue Nefario for shutdown?
GLBSE shutdown caused all problem & if you are a true person, then SUE Neafrio for doing felony things.

You don't have the courage to pressure legally Nefario , but can pressure assets holders, coz THEIR MONEY IS WITH YOU by asking personal things ?

Drag Nefario to court & prove you are in the side of asset holders.

He will need to admit that he issued an illegal security and will be in a  jail cell alongside nefario.

[conspirosphere.tk]

Drag Nefario to court & prove you are in the side of asset holders.

He will need to admit that he issued an illegal security and will be in a  jail cell alongside nefario.

Sounds legit.
I vote to send all the bummers in jail

[mem]

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

He was one of pirates shills and currently shills for BFL, why wouldnt you give the schmuck a scammer tag.

[MPOE-PR]

He was one of pirates shills and currently shills for BFL, why wouldnt you give the schmuck a scammer tag.

If BFL actually blows up it'll be pretty sad.

[Deprived]

Is there some way you could not pay me interest so it doesn't trigger whatever federal code you are trudging up.  I gave you money, why can't you just give it back?  It's akin to me dropping my wallet it IRL, would you give it back to me if you found it?

I should not have to give out my personal info to every asset issuer from GLBSE, they didn't do anything like that for me when I gave it to them.  If I were you, I would feel like a thief.  I understand you got a lawyer to figure out what you should do, but I seriously wonder how you feel deep down knowing you are sitting on a pile of hardware other people bought for you.   

Well there's actually an interesting point raised there.

In some countries (I don't know the situation in the US) certain types of business have to collect personal ID to do business with someone.  The UK (where I live) is one such country.  IF the person refuses or is unable to provide the ID then the company is not allowed to do business with them and has to return any funds they've received (exception being if the company believes the individual may be involved in money-laundering, terrorism etc when they have to file an SAR and hold the funds until either a deadline passes or they're instructed how to proceed).  There's zero option of "we'll just keep the money" or "we already used it" or "we'll give it to charity".

Certainly in the UK if giga NEEDED that information for legal/regulatory reasons but didn't bother collecting the info when he received the funds then he'd have to just return the funds if you were unable/unwilling to provide the information (which would be what you paid for the bonds less any dividends received).  His alternative here to returning it would be to file an SAR (Supicious Activity Report) with whoever his regulatory aithority was (which depends on type of business - e.g. FSA for most financial servie providers, Gaming Commission for casinos etc).

Additionally if in a regulated business then there's whole ton of hoops to jump through to be able to even collect the information - being registered for that specific type of business, having a formal policy on handling the data, liability insurance against loss/theft/misuse of the data, having an individual appointed in charge of the data etc (in fact two different individuals - one for data protection issues, one for KYC/AML requirements).

Now it could be very different in the US - but somehow I doubt it.  If anything, the US is usually even more anal about the hoops companies have to jump through to do things.

Also in the UK it's mandatory to disclose in advance of entering any agreement if:

1.  ID will be required (you also are supposed to provide your policy for complying with data-protection requirements, disclose what the info will be used for, how long it will be kept for etc.).
2.  The agreement is being offered on behalf of a limited-liability entity.

As giga's lawyer said : "and, in fact, the information requested is no more detailed or onerous than what is generally required to open a brokerage or bank account."

Indeed - TO OPEN.  Not requested many months later under threat of withholding your funds if you don't comply.  The argument that everyone knew ID was needed is clearly junk (if ever raised) for a few reasons:

1.  Not everyone lives in the US.  We have no idea what threshholds there are there for requiring ID.
2.  Simple common-sense.  Many people hold small numbers of bonds whose value is less than the cost of obtaining apostille.  Pretty obviously they had no expectation or belief that this level of ID would be required.

If anyone actually wants to complain, best bet is probably NOT the SEC or whatever - first place to start is his local Trading Standards or similar (no idea what they're called in the US): with the complaint being that he took funds and is now requesting that you complete ID procedures costing more than the total value of the transaction and refusing to return your funds if you won't comply.  They'll then forward the complaint to whatever body is best placed to deal with it.

Now that nefario seems to have got a proper grip on sending out lists there seems no reasonable basis to claim that the ID is needed to identify the owners of assets.  Giga trusted nefario to handle who held what bonds when he listed on GLBSE - and to date there's been no evidence suggesting the lists contain false claims.  Which leaves just the "comply with laws" issue - where giga's definitely in the wrong if he believes it's fine to suddenly ask for ID AFTER accepting and using funds.   But please - someone who knows how this works in the US correct me if it's fine there to take money in return for consideration, use it and/or then dispose of it in some manner other than returning it ALL to sender (or file an individual report with LE/regulators) if you subsequently request ID and they refuse to provide it.

[MPOE-PR]

I don't know how to break this to you without it being really embarrassing for both of us, but ducks are smart enough not to spend time on the Internet.

Peer to peer cryptographic ducks. That changes everything.

[dishwara]

If gigavps can pressure its asset holders to get back assets, why he cant sue Nefario for shutdown?
GLBSE shutdown caused all problem & if you are a true person, then SUE Neafrio for doing felony things.

You don't have the courage to pressure legally Nefario , but can pressure assets holders, coz THEIR MONEY IS WITH YOU by asking personal things ?

Drag Nefario to court & prove you are in the side of asset holders.

He will need to admit that he issued an illegal security and will be in a  jail cell alongside nefario.

If he wants us, the investors to go in CORRECT LEGAL WAY to get back claims, then gigavps MUST ALSO GO SAME CORRECT LEGAL WAY.

Is he ready to go jail, for not doing legal things, like creating and issuing illegal security?

[SAC]

If gigavps can pressure its asset holders to get back assets, why he cant sue Nefario for shutdown?
GLBSE shutdown caused all problem & if you are a true person, then SUE Neafrio for doing felony things.

You don't have the courage to pressure legally Nefario , but can pressure assets holders, coz THEIR MONEY IS WITH YOU by asking personal things ?

Drag Nefario to court & prove you are in the side of asset holders.

He will need to admit that he issued an illegal security and will be in a  jail cell alongside nefario.

If he wants us, the investors to go in CORRECT LEGAL WAY to get back claims, then gigavps MUST ALSO GO SAME CORRECT LEGAL WAY.

Is he ready to go jail, for not doing legal things, like creating and issuing illegal security?

Indeed and a claims form that is making the claimants commit perjury to recover their funds is not a legal way to do it.