user:M4v3R - BitMarket.eu

[BCB]

Bitcointalk.org user and BitMarket.eu operator  M4v3R  should be tagged as a scammer for clearly violating his terms of service and putting user funds at risk and losing user funds.


From the Bitmarket.eu Frequently Asked Questions

"How does BitMarket work?
BitMarket functions in a similar manner to a stock market. Unlike some other exchanges, we do not take any money deposits, but only provide an Escrow service for Bitcoins so that the buyer can be sure that he/she receives their coins even if the seller changes his mind. Of course, if both parties agree, it is possible to cancel transaction."

"Are my Bitcoins safe with BitMarket?
Yes. Our wallet and database are first backed up, encrypted and then copied to an external location on a regular basis."

FROM M4v3R's statement

I thought I could provide a hedge fund service for Bitmarket users...And there was one - Bitcoinica...I was so convinced with this idea... that for a while
I kept majority of "offline" Bitmarket funds there...the funds were shorted when it happened (converted to USD and sold)...So while there is still chance to recover the funds...it will be not enough to cover all people's funds...For the record - there are 19980 BTC missing...I don't have own money to pay for this loss ...

No where does is say he would hedge users funds.
No where does is say he would SHORT user funds.
No were does it imply that any user funds would be put at risk.

While M4v3R has apologized for this failed action and is evidently trying to recover the bitcoin community MUST police itself and make it clear any and all fradulent and duplicitious activity such as this will not be acceptable.

Therefore I would call for a scammer tag for user M4v3R.

Full disclosure: I am not a user or a creditor of Bitcoin.eu.

[BCB]

Bitcoin.eu Frequently Asked Questions.  (There are not posted terms of service)

General
What is Bitcoin?
What is BitMarket.eu?

What is Bitcoin?
Visit bitcoin.org to find out.

What is BitMarket.eu?
BitMarket is an on-line exchange used for trading Bitcoins for other currencies.

Trading
How does BitMarket work?
How do I sell Bitcoins on BitMarket?
How do I buy Bitcoins on BitMarket?
Is it possible to cancel a transaction?
How do I deposit money to BitMarket?
Does BitMarket itself sell/buy coins?

How does BitMarket work?
BitMarket functions in a similar manner to a stock market. Unlike some other exchanges, we do not take any money deposits, but only provide an Escrow service for Bitcoins so that the buyer can be sure that he/she receives their coins even if the seller changes his mind. Of course, if both parties agree, it is possible to cancel transaction.

How do I sell Bitcoins on BitMarket?
Before you start trading please visit the Account section and specify your accepted payment methods (currently local wire-transfer, SEPA wire-transfer, foreign wire-transfer, Paypal). Only buyers that have at least one matching payment method with yours will be able to bid on your offers. For example, if you live in Germany and you only accept local wire-transfer you will only be able to sell to people who are able to pay you by a domestic (in this case - within Germany) wire-transfer. Foreign wire-transfer means that you accept payments by bank transfer from any conutry.

In order to be able to sell BTC on BitMarket, you need to deposit them onto your Unique Deposit Address (it can be found in the top-right corner of the screen after logging in). You do so by simply sending any amount of BTC onto this address. Currently BitMarket requires 2 confirmations in order for the transfer to get acknowledged. Also, our site engine scans the wallet every 2 minutes, so it is possible, that you will have to wait for another minute or two after the second confirmation for the funds to show up in your account balance. However, even before that you will be able to see the transfer as unconfirmed under Account History in the Funds section.

Once you have the coins on your account you can create a sale offer. To do so, go to the Offers menu and create a new Sale (Ask). Below there is an explanation of the fields:

1. Offer type: whether you want to buy BTC or sell BTC. Should be set to Sale.
2. Amount: the total amount of BTC you want to sell.
3. Currency: the currency you want to be paid in.
4. Price per 1 BTC: how many of the selected currency units you want to get for 1 bitcoin.

The total field shows how many of the selected currency units you will receive for the total amount of BTC you want to sell.

Once you click the "Create offer" button, your offer appears in the Market section for everyone to see. Once this happens, the relevant amount of your BTC (i.e. the amount of BTC you put on sale) gets frozen with BitMarket (you can see them under your account balance as frozen). This is to ensure that you do not try to sell more bitcoins than you actually have and also that you will not be able to withdraw your Bitcoins while they are put on sale. At this stage you still have the right to unfreeze your coins by cancelling your offer (go to Offers and click Cancel button for the relevant offer).

Once a buyer is found for all or some of your coins, you have no right to unfreeze them anymore and they get locked (frozen) for good. On completion, each offer becomes a TRANSACTION and from now on you can see it under the Transactions menu. A "Send Coins" button will be active for this transaction. This button is used to send your frozen bitcoins to the buyer. It is VERY IMPORTANT that you do not use this button BEFORE you receive the money. By clicking this button you CONFIRM that you received the money and you SEND the coins to the buyer permanently. This process is IRREVERSIBLE and BitMarket will not be held responsible for any BTC loss if you do this before receiving the payment.

Once your sale offer gets matched with a buy offer, both you and the buyer receive an e-mail with instructions on how to proceed further (meaning contacting the other party to discuss the payment method). You can also set a default message for your buyers from the Account section. This message will be attached to the standard e-mail content.

How do I buy Bitcoins on BitMarket?
Before you start trading please visit the Account section and specify your accepted payment methods (currently local wire-transfer, SEPA wire-transfer, foreign wire-transfer, Paypal). Only sellers that have at least one matching payment method with yours will be able to bid on your offers. For example, if you live in Germany and you only accept local wire-transfer you will only be able to buy from people who are able to accept a domestic (in this case - within Germany) wire-transfer. Foreign wire-transfer means that you are willing to pay international wire-transfer to any conutry.

Since BitMarket do not accept money deposits, you do not have to have any funds within the market to start buying. However, you cannot do any trading before we verify your honesty. This process is necessary to avoid nasty/fake offers and protect the sellers.

Once you have been verified as an honest buyer, you can create a purchase offer. To do so, go to the Offers menu and create a new Purchase (Bid). Below there is the explanation of the fields:

1. Offer type: whether you want to purchase BTC or sell BTC. Should be set to Purchase.
2. Amount: the total amount of BTC you want to purchase.
3. Currency: the currency you want to buy the coins with.
4. Price per 1 BTC: how many units of the selected currency you are willing to pay for 1 bitcoin.

The total field shows how many units of the selected currency you will pay for the total amount of BTC you want to purchase.

Once you click the "Create offer" button, your offer appears in the Market section for everyone to see. At this stage you still have the right to cancel the offer (go to Offers and click Cancel button for the relevant offer).

Once a seller is found for the whole or some amount of coins you want to buy, your offer (or part of it) becomes a transaction that you can now see under Transactions menu. Once this happens both you and the seller receive an e-mail with instructions on how to proceed further (meaning contacting the other party to discuss the payment method). During this time the seller's coins remain with BitMarket and he/she will be unable to do anything with them other then sending them to you. Once the seller gets the payment, he/she will then release the coins and they will appear in your BitMarket account balance.

Is it possible to cancel a transaction?
Yes, it is, however you should not do this unless you have a VERY good reason (e.g. your bank is unable to send the payment to the seller's bank). Also, you cannot cancel the transaction by yourself, but you can request the other party to agree to cancel it. To send a cancellation request to the other party go to your Transactions and use the "Cancel transaction" button for the relevant transaction.

You will be asked to type in the reason for cancellation, that will be then emailed to the other party of the transaction. If they deem your reason fair, they will cancel the transaction. Otherwise the only way to cancel it is to email BitMarket. Please remember: buying coins is not a game, these are real people you deal with and by putting an offer out there you give your word that you will fulfill it. If you abuse the Cancel option your account will more than likely be suspended and you may be banned from the exchange.

How do I deposit money to BitMarket?
Currently we do not accept money deposits. The payment process is left entirely to you and the other party of a transaction.

Does BitMarket itself sell/buy coins?
No. BitMarket only provides the means to trade BTC. We do not BUY nor SELL any bitcoins. By trading via BitMarket you always trade with a third party.

Privacy & Security
Are my Bitcoins safe with BitMarket?
Is my password secured on the BitMarket database server?
Is using BitMarket safe?

Are my Bitcoins safe with BitMarket?
Yes. Our wallet and database are first backed up, encrypted and then copied to an external location on a regular basis.

Is my password secured on the BitMarket database server?
Yes. Passwords are 'salted' and then 'hashed' using a modified version of the SHA-256 algorithm (the same one that is used to secure transactions in the Bitcoin network).

Is using BitMarket safe?
Yes. All communication between you and our servers is encrypted using secure socket layer technology (SSL). We hold an SSL certificate approved by GlobeSSL CA SSL Certificates.

Technical stuff
I didn't receive my activation email, what's wrong?
Why do I have to verify my BitMarket account?
How do I verify my account?
How long does the verification process take?

I didn't receive my activation email, what's wrong?
Please check your spam folder. If you don't see the message there please contact us.

Why do I have to verify my BitMarket account?
The main reason for which the verification process is there is to protect the sellers against scammers. Because of the fact that, unlike other exchanges, we do not take money deposits in, it is very easy to bid on coins and then not pay for them. Even though you will not be able to get any coins this way, you are causing hassle for the sellers and slow down the trading process. Thus, we need to make sure that you are a trustworthy person before we allow you to trade.

How do I verify my account?
To verify your account:

1. Log in to BitMarket
2. Go to the Account section.
3. Go to Verify Account subsection.

Here you can select the way you want to get verified. If you have some OTC reputation from the #bitcoin-otc IRC channel, select Bitcoin OTC rating option and follow the instructions on the screen.
In case you have made some successful trading in the past using CoinPal (RIP), select CoinPal as verification method and follow the instructions on screen. If you have neither OTC nor CoinPal reputation, select Other and suggest a method of confirming your honesty. After doing so, click the Verify Account Button.

How long does the verification process take?
Not longer than 48 hours; usually a few hours. However, if you do not hear back from us within 48 hours, please contact us by e-mail.

[BCB]

Hello all. I'm terrible sorry for not responding to this earlier. A mix of personal issues with searching for a solution prevented me from it.

Unfortunately, I have very bad news. I cannot currently proccess your withdrawals. The situation is very complicated and it's all my fault, that's why I feel terrible about it. I tried to make this up, to keep the site afloat and somehow recover the funds, but it's not possible anymore. Right now there are 1786 BTC pending withdrawal, which I can't honor...

Earlier this year, I had this "genius" idea which led me to making a fatal mistake. I thought I could provide a hedge fund service for Bitmarket users. There were other sites providing this service so I guesses that it could be successful. I had experience in trading before, all I needed is a platform. And there was one - Bitcoinica. I was so convinced with this idea (and sooo wrong in hindsight) that for a while I kept majority of "offline" Bitmarket funds there. What I didn't expect was that one day it could just dissapear - taking all the money with it. What's worse, the funds were shorted when it happened (converted to USD and sold) - and after Bitcoinica dissapeared BTC price rose by about 250% until now. So while there is still chance to recover the funds (there is an appointed liquidator assigned to this case and I've already sent in claims) it will be not enough to cover all people's funds. For the record - there are 20161 19980 BTC missing (edit: I subtracted my funds that also were deposited on Bitmarket), and Bitcoinica claims total for around 50K USD (the exact amount is uncertain because the liquidators haven't yet stated at what rate they will liquidate positions).

Sadly, I alone, I'm out of options. I don't have own money to pay for this loss (Bitmarket never made any real profit and I make up for a living by part-time web/mobile programming). The options for making this up for everyone as I see are:

- find an investor (or investors) that is willing to cover at least part of is debt. I would transfer all rights to the website software, servers and database to him and also work as a technician, possibly also implementing features he'd wanted. If you reading this have the funds necessary to make this work, PLEASE contact me on this.
- freeze all current funds and "start over" trading with explicit fees, implementing much-needed features like rating system and others. All profits from the fees would go directly to a fund for repaying the debt. I'm afraid that this option alone is not enough though - many people won't (and have full right to do so) trust the site again...
- something else?

Again, I would like to deeply apologize to everyone involved with this. I'm really sorry . I made a fatal mistake and I have to deal with it now. If you thinking about sueing me about this - you have full right to do so, but I don't think it's a good idea - I don't have any money so winning a case will get nothing for you and possibly ruin my life . It also would prevent me from doing anything to alleviate this situation, and I really want to make this up for everyone and I'm willing to do anything in my power to do this. I had many sleepless nights thinking about how I can make this tight. I just need some help with this.

Last, but not least...
If you have any bitcoin you can donate to help users that have locked funds, please send them here: 1Km5GFMat1DXcbvMTeH9ZvLGKvFCLBA9dM
All received Bitcoins will go directly to process withdrawals. I will update how much is left in this thread.

[stochastic]

So the moral of the story is that there needs to be 3rd party auditors.

[BCB]

The moral of the story is that if you want to operate long term in bitcoin-land you MUST establish TRUST and continue to show that you have INTEGRITY and this can only be demonstrated by you actions and community members response to you actions.

Gavin Andreessen shows this.
Tangible cryptology show this.
Piuk continues to show this.

Roger Veer is on the fence due to some unfortunate missteps
MOE-PR/MP is on the fence due to unfortunate trolling
Usagi is on the ropes due to many bad (and possibly fraudulent) decisions

Trendon Shavers failed to show this
Nefario fails to show this
Patrick Harnett, once well respected, failed to maintain his integrity

If m4v3R had admitted his lapse in judgement and had not lost user funds he could increased his integrity.  However he was forced to admit his lapse in judgement because he could no longer hide the fact he lost user funds.

Bitcoin leaders and business operators must understand that the only way to maintain their credibility is to maintain their TRUST and INTEGRITY in the community. And bitcoin business users and investors MUST evaluate the risk, based on this perceived trust and integrity anytime they entrust their coins with others.

And finally what others my question the value of the scammer threads I for one strongly believe that community must hold other community members accountable for any misdeeds for the good of the community as a whole and to protect the many new users who join bitcoin every day.

I for one prefer to be a part of a vibrant, growing community made up of incredibly smart and talented and passionate members who are together learning to harness the power of an incredible, emerging technology and not part of a community that allows scammers and hackers and duplicitous and fraudulent business operators to run rampant and without check.

Many want freedom, anonymity and no regulation. But we do need self-regulation and right now the only place we can attempt to achieve that are these scammer threads   

[fbastage]

So the moral of the story is that there needs to be 3rd party auditors.

probably.

just don't be fooled by false auditors who are in on the scam.  back to the question of trust.