I have finished reviewing the finances of NG. Logan, the current CFO of NG, has been missing for quite some time now and I finally decided to just do his job for him. I only wish I had done it sooner. Simply put there is a lot of money missing.
First, let me share with you all of the accounting documents I received from the group as well as the NG officer board Skype chat.
Logan was given the documents barwizi made to do the premine accounting. I later asked him for a progress report on the premine:
This is a reminder that these documents were made by barwizi, and are missing important details about each transaction. That is why I looked to the forums for traces of these transactions, or talked to the people on the other side of each transaction for verification.
Lets start with the General Fund accounting. The General Fund was basically an ICO for Noir Group in which a large portion would go to buying mining rigs to mine BTC and other alts for the group. The remainder of these funds were expected to be used in the interest of GF shareholders. A share was purchasable for 1 BTC, or 1 BTC worth of either NRS,NRB, or PTS. Because alts have a volatile BTC price Logan adjusted the price of each share in NRS/NRB/PTS frequently. At the end of the investment period 49.8105369691 shares were purchased. Here was the distribution across each coin:
BTC - 31.28370825 shares
NRS - 11.9205333703 shares
PTS - 4.7749 shares
NRB - 1.8313953488 shares
It is important to note that at the time this was 49.8105369691 BTC worth of assets. Barwizi used his own bitcoin to order the mining rigs for the group in advance. He purchased 5 TH for 31.94765811059584 BTC. I calculated this using the price of bitcoin in USD around the time of the purchase, and these threads:
There is a chance that the price was slightly higher or lower, but not by much. Barwizi then took all of the GF assets as repayment. That means that for 31.94765811059584 BTC of purchases he repayed himself with 49.8105369691 BTC worth of assets. This appears to have never been made clear to the officers, and in turn never made clear to investors. In this quote from the NG board chat Pocket proves this:
[4/28/2014 4:34:47 PM] Pocket: The General Fund is currently sitting on a small stack of BTC and a relatively large stack of NRS. A vote will be passed around to help determine our next plan of action with group funds.
I believe that investors were told the same in a newsletter. Barwizi stated to me earlier that all of the GF went to the miners. Obviously this wasn't true.
[9/3/2014 2:50:23 PM] Barwizi: when we started, we decided to open the mining facility, that is whare all the GF funds went
As far as I know none of the officers knew about the premine, in which case they assumed that expenses, such as their salaries and the cost of the multipool, were coming from the left over GF funds/mining op. There were requests in the NG board chat, as well as other places, for control of the GF assets to be given to the officers. They were never granted.
This brings us to the premine. A block early on in the life of NRS was loaded with a 250k premine, and solo-mined by barwizi. The premine was brought up after this chat in the Noirgroup Thinktank on Skype:
[6/18/2014 10:26:46 AM] wallaceliu007: sure
[6/18/2014 10:27:35 AM] wallaceliu007: I'm a big NRS holder, I think I'm in the richlist... almost 60k now
[6/18/2014 10:28:45 AM] Barwizi: 99969
[6/18/2014 10:28:57 AM] Pocket: by now all the people who want to mine NRS are already doing it, no new people really getting in now
[6/18/2014 10:29:20 AM] Pocket: shit bar, i'll give u the last 31
[6/18/2014 10:29:21 AM] Pocket: lol
[6/18/2014 10:29:56 AM] Barwizi: no, that was my son playing with the key board
[6/18/2014 10:29:58 AM] Barwizi: lol
[6/18/2014 10:30:14 AM] Barwizi: i have 60k
[6/18/2014 10:30:21 AM] Pocket: oh
[6/18/2014 10:30:21 AM] Pocket: lol
[6/18/2014 10:30:31 AM] wallaceliu007: lol
[6/18/2014 10:30:50 AM] Barwizi: he's decided since i wasnt home all this time, i should play with him until he sleeps
[6/18/2014 10:32:28 AM] Koontas: and you should
[6/18/2014 10:34:15 AM] wallaceliu007: my kids also like to play the keyboard
[6/18/2014 11:09:41 AM] Chocobo: didnt you have 190k NRS a few weeks ago bar?
[6/18/2014 11:10:27 AM] Barwizi: real life threw me a curveball
[6/18/2014 11:11:18 AM] Barwizi: but now with PoW coming to an end, i will be restocking
I then personally asked barwizi about the premine:
[6/18/2014 11:32:48 PM] Barwizi: yes, i sold off a bit, maybe around 80k
[6/18/2014 11:33:07 PM] Barwizi: but my true holding are my own
[6/18/2014 11:33:23 PM] Barwizi: thionk about it, if i said i have 500k
[7:58:40 AM] Barwizi: 0f the 250 i kept nearly 80k
Only two hours later he admits to selling more in the NG board chat:
[6/18/2014 1:38:17 PM] Koontas: Bar, probably not a good idea to tell people you've dumped 130k NRS...
[6/18/2014 1:39:54 PM] argakiig: ^
[6/18/2014 1:41:38 PM] Barwizi: oh
[6/18/2014 1:42:01 PM] Barwizi: didnt know someone was an avid follower of my address
[6/18/2014 1:42:10 PM] Koontas: you said it in the other chat...
[6/18/2014 1:42:24 PM] Koontas: chocobo knew you had 190k somehow...
[6/18/2014 1:44:29 PM] Barwizi: thats what i mean, i dont klnow how he knew how much i had before
[6/18/2014 1:44:45 PM] Koontas: yea
[6/18/2014 1:45:42 PM] Koontas: That selling also really fucking hurt the price...just my $.02...
[6/18/2014 1:45:56 PM] Barwizi: no it didnt
[6/18/2014 1:46:02 PM] Koontas: oh come on
[6/18/2014 1:46:14 PM] Barwizi: when i was selling the price was going up
[6/18/2014 1:46:14 PM] Koontas: that's over 40btc at current prices
[6/18/2014 1:46:30 PM] Barwizi: and it stayed up for long afterwards
It is really impossible to tell from those quotes how many NRS he sold from the general fund and the premine, mostly because his answers don't stay consistent for even two hours. The document I linked at the top of the post titled "NRS accounting update" is barwizi's attempt at balancing the premine books. Let's take a look at this document.
As I noted before, most of these transactions are difficult to prove, especially the large amount of transactions with no description of what they were for. There is also a category of transactions with no transaction id which honestly cannot be counted as is. Lets start with the transactions I am confident were actually spent for the good of NG:
Logan CFO OFFICER PAYMENT
9ezfBmHJdjB6rZiRKU8wrnF1d8JAJ4qDWg 9000 NRS
Argakiig CTO OFFICER PAYMENT
9fkmW1TuFG2RxzjbtEvLpqyQD5Eu9j4rLx 9000 NRS
Pocket CMO OFFICER PAYMENT
9k8rLM1L3ucRKGdJumupTpa14TShH4ijL5 9000 NRS
lajz99 COO OFFICER PAYMENT
9kjBqdj18C3Jz11UuTYBygbYLttQwiXjZb 4790.18 NRS
j stroud WALLET QT
9aMcCPM3gvBKjzV1AMYQkivsZFmGgCWi2k 17500.01 NRS
tucksmcgucks CREATION OF GENESIS BLOCK
9TA1F2FvKjvSfPfTYNuaCBkh8i69MGLqAQ 4001 NRS
Bitcrypt Consulting LLC Multipool
10000 NRS
3.0 BTC
Argakiig Development tip 1000 NRS
Pinwc4 600 NRS
Translator 1000 NRS
Barwizi on bitsharestalk:
i agree, i'm not really good at articulating, it takes time for me to be coherent in anything other than technical work. I'm offering an immediate 300 NRS Bounty for the Production of a Getting Started Guide. 800 NRS for a fully functional Windows Wallet and a further 800 for Mac.
Windows wallet - 800 NRS
Mac wallet - 800 NRS
https://bitsharestalk.org/index.php?topic=2924.msg36964#msg36964guide - 300 NRS
https://bitsharestalk.org/index.php?topic=2924.msg36811#msg36811https://bitcointalk.org/index.php?topic=464197.msg5141523#msg5141523first pool 1000 NRS
block explorer 500 NRS
Icons 300 NRS
Total: 69591.19 NRS 3.0 BTC
So all of the legitimate transactions I could find add up to 69591.19 NRS and 3.0 BTC. Not even close to the 167112.76 NRS (GF) + 250000 NRS (premine) = 417112.76 NRS we are tracking. One thing missing from the premine accounting is the 80k NRS barwizi says he paid himself. Interestingly enough there are a few transactions that add up to 79.2k sent to a 'root_1'. I asked barwizi about 'root_1' and what he did for the 79.2k NRS:
[9/11/2014 9:02:03 PM] Chocobo: also who is root_1?
[9/11/2014 9:02:41 PM] Noir X: root tends to pop up when i need him
[9/11/2014 9:03:03 PM] Noir X: i will ask if he finally got a new BCT account
[9/11/2014 9:03:21 PM] Chocobo: he have an old one?
[9/11/2014 9:05:31 PM] Noir X: i'll ask
[9/11/2014 9:06:59 PM] Noir X: i found him on stackexchange when i asked for c++ help
[9/11/2014 9:07:21 PM] Chocobo: what did you pay 79k NRS to him for?
[9/11/2014 9:07:40 PM] Noir X: hold
[9/11/2014 9:07:43 PM] Noir X: on
[9/11/2014 9:09:20 PM] Noir X: i was getting weird seg faults when compiling on linux, he helped me fix that, he also helped me modify the internal miner to correctly find blocks for NRS
[9/11/2014 9:09:56 PM] Noir X: his actual was meant to be ~50k
[9/11/2014 9:10:09 PM] Noir X: right at the start
[9/11/2014 9:11:04 PM] Chocobo: so was supposed to get 50k in feb
[9/11/2014 9:11:21 PM] Chocobo: but got 79k in march
[9/11/2014 9:11:50 PM] Noir X: yeah, the rest was to try keep him around for his talents
[9/11/2014 9:12:00 PM] Noir X: it would have been nice
[9/11/2014 9:12:42 PM] Noir X: like having a proffesional coder
[9/11/2014 9:12:56 PM] Chocobo: have his stack exchange?
He has not located root_1 yet, or found his stack exchange account. He says this information was on a hard drive that needs to be recovered. The amount root_1 was paid is suspiciously close to the 80k barwizi paid himself. The 79.2k NRS root_1 was paid was worth about 10.488 BTC on the dates of his payments and corresponds heavily to a dump on poloniex around that time. root_1 was paid a ridiculous amount for the work he did.
Another gaping hole in barwizi's accounting is a period around the launch of NRS that he sold premine NRS for .00085-.001 BTC per NRS. Here is proof that it occurred:
Using transactions from around that period that barwizi noted in his accounting I came up with a quick estimate of 43861.58 NRS sold in this manner. Remember this is an estimate, the actual number could be far smaller or far greater. Here is how barwizi reacted to that estimate:
[3:45:03 PM] Chocobo: the other thing you need to find is do u remember when you were selling NRS for .00085-.001 BTC per from the premine?
[3:45:07 PM] Noir X: we even made a different implementation that may end up as part of any new poject that comes up
[3:45:16 PM] Noir X: yes
[3:45:52 PM] Chocobo: it looks like you sold around 43861.58 NRS
[3:46:01 PM] Noir X: yes
[3:46:02 PM] Chocobo: thats a lot of BTC
[3:46:05 PM] Noir X: i think
[3:46:19 PM] Noir X: but not all of it was at that price
[3:46:24 PM] Noir X: i think
[3:46:25 PM] Chocobo: you were entitled to 30-43 BTC in that way?
[3:46:31 PM] Chocobo: from the company fund
[3:46:38 PM] Noir X: that was long before there was any noir group
[3:46:50 PM] Noir X: that was when it was , Barwizi + new coin
[3:46:58 PM] Chocobo: there was NG
[3:47:05 PM] Chocobo: i have the thread
[3:47:23 PM] Noir X: yeah and who was i working with at that time?
[3:47:32 PM] Chocobo: omg dude how much BTC did NRS that you didnt own make you
[3:47:39 PM] Noir X: actually, lets stay on course
[3:47:47 PM] Noir X: so you wish to know what happened to the BTC ?
[3:48:04 PM] Chocobo: what BTC?
[3:48:52 PM] Noir X: i traded for any alt , then traded to BTC
[3:49:03 PM] Chocobo: yeah
[3:49:06 PM] Chocobo: still BTC
[3:49:11 PM] Noir X: you just mentioned the NRS i sold in the beginning
[3:49:26 PM] Noir X: well, most of it is undocumented
This really bothered me. He didn't even try to deny that he made that much BTC selling parts of the premine. He also claimed NG wasn't around yet. It was, and there are about 4 threads that document it. Makes me think he sold more than 43k NRS.
Later on he tells Logan this:
[7:57:59 AM] Barwizi: when none was forthcoming, i went as far as selling NRS at a discounted rate, all of this is documented in the firts ANN i made for NRS on both forums
Discounted? More like far above the all time high.
Next up is the accounting of the mining operation. Here are the only addresses I found that were mined to:
The total BTC mined to these addresses is 10.42958901. Far below the estimated 32.9448 BTC they should have mined. How much of this BTC have investors received? The total NRS payed out to investors as a whole was 7851.104578454333 NRS, which likely cost around 1.3 BTC to acquire around the time of the payouts. Barwizi made a document that attempted to explain where this BTC went. The document is at the top of this post, it is the one titled 'BTC accounting.xslx'. This document is riddled with flaws and inconsistencies. The first being the cost of the multipool. It really cost 3 BTC, not 3.5 BTC. Here are the transactions to the company NG hired:
753a5e7e5f828c447079b5efb0178731e562317f108602e95ea6448273791c9e
8d29d09e48c7b8aa5b811db7156c016df8df2867704b475ad0286bddfceab874
As you can see barwizi reimbursed himself in two payments here. The first being 3 BTC for the duty on the miners. Interestingly enough this is the third time he is reimbursed for duty. The first being when he decided the remaining 17.86287885850416 BTC worth of assets in the GF were his (about 3x the 6.5 BTC cost of duty, even though that price of the duty has not been proven). The second being a 0.57 BTC share added to his name on the registry noted 'Customs'. The third being the massive amount of BTC he made off of the premine. Then there is the row 'Partial re-inbursment of Costs' where he pays himself 2 BTC more for whatever reason.
On the launch of Cure Coin barwizi switched the miners to a pool that was mining curecoin. He claims to have left the coins on there instead of doing an auto-payout (rookie mistake...too rookie) and before he went to withdrawal the pool owners ran with the coin.
[9/3/2014 3:07:41 PM] Barwizi: yeah
[9/3/2014 3:08:02 PM] Barwizi: if they hadnt held our curecoin that would have been +20 BTC
To get 20 BTC worth of curecoin the miners would have had to been running for quite sometime. During this time he wouldn't even ask an officer to withdraw these coins or at least keep an eye on the operation? It is very hard to believe. Especially when you see officers asking for control of the miners several times in the board chat. This stubbornness to keep the operation in his own hands after having the miners down 2/3rd's of the time only reinforces the idea that he was using the miners for himself. It is either that or gross mismanagement after receiving our near 50 BTC in investments.
Here is the pastebin of me confronting barwizi over all this missing money:
[1:31:44 PM] Chocobo: ok well the GF should have a shitload more in it
[1:32:09 PM] Noir X: from where?
[1:32:35 PM] Chocobo: 157500 NRB, 474.99 PTS, 167112.76 NRS
[1:32:41 PM] Chocobo: from the shares
[1:32:47 PM] Noir X: ALL of that is mine
[1:32:56 PM] Chocobo: there was enough BTC to pay for the miners
[1:33:06 PM] Chocobo: the rest belongs to the GF
[1:33:14 PM] Noir X: No there was not
[1:34:05 PM] Noir X: Entire GF investment went into miners
[1:34:11 PM] Chocobo: no lol
[1:34:35 PM] Chocobo: how much BTC was in the GF shares on your accounting of it
[1:35:21 PM] Noir X:
https://docs.google.com/spreadsheet/ccc?key=0AhCtiOzdwvPydEdVS21zTlptWjVGZkgxeDhxMUlzY3c&usp=drive_web[1:35:35 PM] Noir X: that is the original doc
[1:35:52 PM] Chocobo: thats out of date
[1:35:59 PM] Chocobo: there are 50ish shares
[1:36:07 PM] Chocobo: and even by that account
[1:36:12 PM] Chocobo: there was 27 BTC
[1:36:33 PM] Chocobo: you dont get the rest of it as a tip for ordering
[3:31:50 PM] Chocobo: why didnt you record the 80k in the premine accounting document?
[3:32:27 PM] Noir X: because it ceased to be part of the premine when i took it
[3:32:40 PM] Chocobo: um no it didnt
[3:32:48 PM] Chocobo: thats not how it works
[3:32:56 PM] Chocobo: 80k went to you
[3:32:59 PM] Chocobo: record it
[3:45:03 PM] Chocobo: the other thing you need to find is do u remember when you were selling NRS for .00085-.001 BTC per from the premine?
[3:45:07 PM] Noir X: we even made a different implementation that may end up as part of any new poject that comes up
[3:45:16 PM] Noir X: yes
[3:45:52 PM] Chocobo: it looks like you sold around 43861.58 NRS
[3:46:01 PM] Noir X: yes
[3:46:02 PM] Chocobo: thats a lot of BTC
[3:46:05 PM] Noir X: i think
[3:46:19 PM] Noir X: but not all of it was at that price
[3:46:24 PM] Noir X: i think
[3:46:25 PM] Chocobo: you were entitled to 30-43 BTC in that way?
[3:46:31 PM] Chocobo: from the company fund
[3:46:38 PM] Noir X: that was long before there was any noir group
[3:46:50 PM] Noir X: that was when it was , Barwizi + new coin
[3:46:58 PM] Chocobo: there was NG
[3:47:05 PM] Chocobo: i have the thread
[3:47:23 PM] Noir X: yeah and who was i working with at that time?
[3:47:32 PM] Chocobo: omg dude how much BTC did NRS that you didnt own make you
[3:47:39 PM] Noir X: actually, lets stay on course
[3:47:47 PM] Noir X: so you wish to know what happened to the BTC ?
[3:48:04 PM] Chocobo: what BTC?
[3:48:52 PM] Noir X: i traded for any alt , then traded to BTC
[3:49:03 PM] Chocobo: yeah
[3:49:06 PM] Chocobo: still BTC
[3:49:11 PM] Noir X: you just mentioned the NRS i sold in the beginning
[3:49:26 PM] Noir X: well, most of it is undocumented
[3:53:09 PM] Noir X: do you know that we maintain a paid Github account? Or that we have had servers (two expired , we have 2 left) for the greater part of the year ?
[3:53:52 PM] Noir X: We had at a point 6 permanent nodes to kep the network up, which were paid for using BTC i got from selling PTS i got from the LTB guy
[3:54:30 PM] Noir X: even now, where do you think the server that did the snapshots came from?
[3:55:17 PM] Noir X: We got a lot of publicity in the beginning which was not free, but none of those costs were mentined
[3:55:49 PM] Noir X: even now i can give you access to one of the servers that has the beginnings of an exchange
[3:55:53 PM] Chocobo: what did you pay for publicity and through who?
[3:56:38 PM] Noir X: hell if i know, i can look through the pms and on the other forums
[3:56:48 PM] Noir X: you know that we had a forum ?
[3:57:06 PM] Noir X: dont you wonder where all that infrastructure came from ?
[3:57:31 PM] Chocobo: yeah noirbitstalk?
A few things about this last quote. A github paid account is $7 a month. We didn't even have one the whole time. The servers were not for a greater part of the year, as NG hasn't been around for a year. As for the servers and the forum, they are inexpensive and I know one of them is paid for by an officer. This 'justification' should make you sick. Barwizi likely ended up with AT LEAST 50-100 BTC that should of belonged to the GF. With the NRS price after a month the GF would have been very well off and able to fund actual projects.
This conversation was had before I finished my accounting, so some of the numbers were not figured out. The numbers I posted here are more accurate.
Barwizi has had months to prove expenses, and try and justify all of this. The fact of the matter is than even if there were 20 BTC of legit expenses that I didn't find he still took a TON of BTC from us. I don't even feel like looking at what these funds were worth when NRS held a 30k sats price. He lied to us as investors. A 'ground-breaking' feature was always two weeks away. While we bought in anticipation he dumped on us. You may have seen my disappointment in the quality of work done by our officers. Now that I reviewed all of this I realized that he contributed to their failure by keeping the funds away from them and in the dark as far as development goes. The officers failed, no doubt, but they tried.
I will be stepping down from COO. Don't worry, I was never paid and will never accept payment. I really didn't start working until a month ago, and most of my time was spent working up a redesign/relaunch for NRB and NRS as well as a full marketing plan. My work was ruined when barwizi decided to announce a merge without so much as asking me. He did this because he wasn't capable of developing a feature we planned for NRB. It is a shame this didn't work, I was very excited to work on a decentralized company, and my next order of business was to COMPLETELY re-brand NRS. I was going to make it simple. I also had my brother help barwizi program for free, and was going to bring on a second programmer/web designer. These two are good, they could have done the code barwizi couldn't.
If you are not aware barwizi launched a side project today:
https://bitcointalk.org/index.php?topic=791338.0He launches this while Noirshares is in between a blockchain swap and in shambles. You can't even trade the new NRB/NRS because the markets are on the old chain. His new project really pissed me off today. Here is what he had to say:
it's irritating to say the least that you think i am in some way tied to NG, i chose to stick with it and do NRS 2.90 as well as colored coins (project X), Antimatter aka XUC is in no way a part of NG. and you want to complain yet it is already in the list of coins participating.
With the amount of BTC he took I sure hope he feels some obligation to deliver on his promises to us.
