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Author Topic: Bitcoin24: Prosecutors investigating fraud charges (Source: Heise Online)  (Read 4373 times)
falschgeld
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April 27, 2013, 02:35:40 PM
Last edit: April 27, 2013, 10:46:35 PM by falschgeld
 #1

Heise Online writes:
"In the case of the Bitcoin24 bitcoin exchange[1] which is closed at the moment, the Public Prosecution Office of Berlin has seized a bank account of exchange operator Simon Hausdorf. According to a bulletin in the juridical part of the Federal Gazette[2], Hausdorf is being investigated against for alleged fraud; maybe-victims can assert their claims under civil law. Hausdorf is claimed to have attempted to withdraw funds that exchange users had transferred in for trading in order to use them for his own purposes.

Two weeks ago, Bitcoin24 has suspended all operations[3]. At first, users were told that Poland-based accounts belonging to the company had been frozen by local investigators. An order for account seizure (translated from Polish), a search warrant from Berlin authorities for the operator's home and office, a search record and an objection from Bitcoin24's legal counsel were posted on the exchange website. It seems that German authorities have raised investigations in Poland by requesting administrative assistance.

As SZ reported last week[4], a charge with goods and service fraud has been filed with the State Criminal Investigation Agency of Berlin; a bank from Germany is said to have filed a charge as well. Deposits of noticeably high amounts as well as ATM withdrawals of abnormally high amounts raised suspicions at the Bremen-based bank where the account is held.

On monday, a letter[5] from Bitcoin24's attorneys was published where they stated that they were in contact with investigation authorities and bailing out all of their options. They emphasized that frozen funds were safe. All in all, the lawyers assume that exchange operations will resume eventually but they don't know when that would happen.

In a board posting[6] that is believed to be authentic, the operator himself described the charges as "ridiculous" and affirmed that his withdrawals weren't funds belonging to his customers but rather profit from his business. He also said that he had explained to his bank in detail how he would be using his accounts.

A few affected users have set up a help forum[7]. One of the site founders announced[8] that he had filed a charge against Bitcoin24, too. A list of 129 further victims whose claims sum up to € 1 000 000 is said to be sent to the Prosecution Office as well.

It seems that only a court will be able to determine whether this is a case of fraudulent business conduct or just simple dilettantism of the operator (as some assume)."

Source: http://www.heise.de/newsticker/meldung/Bitcoin24-Staatsanwaelte-ermitteln-wegen-Betrug-1850884.html

[1] https://bitcoin-24.com/
[2] https://www.bundesanzeiger.de
[3] http://www.heise.de/newsticker/meldung/Bitcoin-Boersen-Bitfloor-und-Bitcoin24-geschlossen-1844920.html
[4] http://www.sueddeutsche.de/digital/internettauschboerse-bitcoin-anbieter-soll-kunden-um-millionen-geprellt-haben-1.1652723
[5] https://dl.dropboxusercontent.com/u/2329063/BTC24.pdf
[6] http://board.btc24-help.com/viewtopic.php?f=4&t=18&sid=362c9d47cfb1847822bf74bfb22c10c2
[7] http://board.btc24-help.com/
[8] http://btc24-help.com/de/deutsch-anzeige-ist-raus/
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April 30, 2013, 01:32:34 AM
 #2

The Bitcoin-24 exchange has reopened withdrawals of Bitcoin from the accounts.  Fortunately, all my holdings there happened to be in BTC when it shut down.  I requested a complete withdrawal yesterday, and the coins arrived safe and sound today.  I got it ALL back!

I do hope that the Bitcoin24 exchange will be able to open again, as it was fun to do day trading with zero fees!

Tips much appreciated! 1PPJHDawPvjh6MEzsvXrMYLgpLmyAaNXUc
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April 30, 2013, 10:20:51 AM
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Profits from his business shouldn't be in the same account as user funds, so it should be pretty easy for him to establish that the ATM withdrawals weren't touching user funds.  Unless of course he didn't segregate user funds, in which case he deserves every bit of grief he's attracting.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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April 30, 2013, 07:21:43 PM
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Profits from his business shouldn't be in the same account as user funds, so it should be pretty easy for him to establish that the ATM withdrawals weren't touching user funds.  Unless of course he didn't segregate user funds, in which case he deserves every bit of grief he's attracting.

well i don't know about that. btc is btc and fiat is fiat. if everyone gets what is owed who cares (other than the govt i guess)

seems people got their btc back right?

If everyone gets their funds back from pirate, will that make what he did OK?  If everyone got their funds back from Bitcoinica, would that mean there should be no consequences for the "hacker"?

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
chrisLG
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May 01, 2013, 08:59:55 AM
 #5

Actually, from what I can tell it most likely went down like this.

(A) The polish bank of Bitcoin-24 froze the company's bank account due to "suspicious" (read: "huge") money deposits into this account from various sources.
Reason for the transfers:  Everybody wanted in on the BTC train at that moment. Btc24's giropay method was an easy way to instantly (yes, instantly) convert Fiat to BTC.

(B) As a result Bitcoin-24 could no longer honor Fiat-withdrawals (due to not being able to send money out of the polish bank account). This is where the trouble started. Simon should have communicated this openly right away - instead he was unavailable for at least a week. Not responding to messages etc. Although this is understandable this is actually his only mistake in this matter.

(C) in the same time (propably due to the huge a,count of trading) bitcoin-24's trading engine appeared to have behaved "bonky" (or at least the frontend displaying balances). Minutes before bitcoin-24 shut down I sold 5 BTC but got the Fiat credited twice (so I could hypothetically buy 10 BTC back right away).

Points A to C are pretty well documented facts. Now to my theory

(D) Because of his bank account being frozen and his trading engine behaving erratic, Simon decided to shut down trading. Because of the legal uncertainty he decided to neither honoring BTC withdrawals (which he could have) nor Fiat ones (which he could not anyway) until he got things sorted out. Again: Not a stupid move.

(E) Because of not being able to withdraw BTC someone alerted German authorities claiming being defrauded by Simon (since he did not transfer BTC). This does not necessarily have to be related to the freezing of his polish bank account and most likely it is not.

(F) After consulting with his lawyer and sorting through the mess, Simon decided to allow BTC withdrawals (which seem to be working). I guess Fiat withdrawals will be available too in a while.

This is where we are right now.

Please excuse any spelling errors - I am writing this on a tablet.
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May 01, 2013, 09:42:42 AM
 #6

This is how I see it. Had the bank not frozen his account, pretty much nothing would have happened. Aside from him having to fix the apparent bugs with his trading engine.
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May 01, 2013, 12:50:15 PM
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Hi! I think You forgot some crucical point; from reading the forum i absolutely got the impression That users could deposit without identification.. Money laundry anyone ? Phishing victim money please come.... Anyone proactively thinking must have Seen this row of events coming
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May 01, 2013, 04:49:17 PM
 #8

You are right, borgfish. It was obvious the shit would hit the fan eventually with this exchange. Simon had no idea who his customers were and if the money transfered to his bank account came from some sort if phishing...

I liked the exchange very much. But only had an active balance there for just a few minutes: Transfer money, buy bitcoin, get out. That worked really nicely while it lasted.
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