[BTC-TC] Deprived Mining Speculation (DMS)

[stripykitteh]

OK, here's my take on where we should go from here, if anywhere.

There's about 410 btc in assets legally owned by Deprived. 150 in a wallet, 260 in bonds. Even at today's prices that's about a quarter of a million dollars. It is not unrealistic to think it could be worth a million dollars or more sometime in the next year. So it's worth going to some trouble to retrieve it, or even part of it.

Even though we have no legal right to these funds, we do have an equitable right. Essentially that means in an English Court of Law we should be able to apply to be recognized as having a claim on Deprived's estate (if he is dead), or sue for breach of contract (if he is alive).

My worry is that if Deprived has died, his estate may be going through probate now and his executor is either unaware of the assets he owned or is aware of them and is hoping no one will come forward to place a claim on them. So we can't afford to delay for too long.

While we don't have a name for him, ThickAsThieves had a throwaway gmail account for him.

As we all know, even throwaway account emails often have interesting things in them, that might be used to trace the real account owner. I'm interested in engaging a lawyer in the UK to apply to the courts there for a 'witness summons' (what would be a subpoena in the US and Australia) so we can ask Google to identify Deprived. Conceivably we could also ask for a court order for bitcointalk.org or another entity to reveal his identity, if they have it, but Google might be easier as they would have a registered subsidiary company in the UK.

I am not in the UK but I have used a lawyer there in the recent past. I'm prepared to foot the cost myself to get some initial advice from her on how we might proceed, but if it needs to go further there will be more costs.

Anyone else interested? TaT, are you prepared to provide that gmail account?

Disclosure: I am not a lawyer (I am a law student, though). I don't claim to be an expert on debt recovery and this isn't legal advice.

P.S. No one should be getting their hopes up at this stage. Even if we identify Deprived, and find out that he has died, contesting estates is not a straightforward matter, and is usually a drawn-out one. Accessing the assets of Deprived may also be problematic for obvious reasons.

[BitThink]

Nice summary.

Your suggestion is great, but I still think to contact Kate and negotiate with her about the bond is relatively easier. In case of death of deprived, most likely that 150 BTC is gone forever anyway.

[stripykitteh]

Nice summary.

Your suggestion is great, but I still think to contact Kate and negotiate with her about the bond is relatively easier. In case of death of deprived, most likely that 150 BTC is gone forever anyway.

Well, if we don't try it certainly will be gone forever.

By all means we should ask Kate about the bonds. In fact, I just did it:

https://litecointalk.org/index.php?topic=4582.msg138988#msg138988

I'm expecting her response will be "Deprived is the legal owner of the bonds, and he's not around, so I can't help you." She'd have a point, actually. What if he turns up?

I think we've got to find Deprived, or find out what happened to him.

[kellzy]

:??

I do not know what is more shocking - Me just reading through the last 30 pages for an hour or what has happened here to the investors.
This Kate woman seems to hold the key to unlock the puzzle.

[BitThink]

Nice summary.

Your suggestion is great, but I still think to contact Kate and negotiate with her about the bond is relatively easier. In case of death of deprived, most likely that 150 BTC is gone forever anyway.

Well, if we don't try it certainly will be gone forever.

By all means we should ask Kate about the bonds. In fact, I just did it:

https://litecointalk.org/index.php?topic=4582.msg138988#msg138988

I'm expecting her response will be "Deprived is the legal owner of the bonds, and he's not around, so I can't help you." She'd have a point, actually. What if he turns up?

I think we've got to find Deprived, or find out what happened to him.

Kate could do something as Usagi suggested he would do before, exchange the debts. She could buy DMS SELLING with CipherMine.B1. Basically erase the debts by exchanging her debt to deprived with deprived's debts to us.

[stripykitteh]

Nice summary.

Your suggestion is great, but I still think to contact Kate and negotiate with her about the bond is relatively easier. In case of death of deprived, most likely that 150 BTC is gone forever anyway.

Well, if we don't try it certainly will be gone forever.

By all means we should ask Kate about the bonds. In fact, I just did it:

https://litecointalk.org/index.php?topic=4582.msg138988#msg138988

I'm expecting her response will be "Deprived is the legal owner of the bonds, and he's not around, so I can't help you." She'd have a point, actually. What if he turns up?

I think we've got to find Deprived, or find out what happened to him.

Kate could do something as Usagi suggested he would do before, exchange the debts. She could buy DMS SELLING with CipherMine.B1. Basically erase the debts by exchanging her debt to deprived with deprived's debts to us.

She might, I've also put that idea to her. We'll have to see what response we get, if any. It can get messy legally trying to get Ciphermine out of a contract, which is essentially what we'd be trying to do.

[stripykitteh]

Hi, though not much, the following is a quote from Deprived which I extracted from a PM I exchanged with him:

My training is as a software engineer - and I worked for a long time as an analyst/programmer as well as in a role integrating third-party software into a massive company - so I have plenty of experience of what happens when software deployment is rushed.

Might help you building this guy's profile.

A hint: Deprived was very active on Litecointalk.org. Maybe you should ask people there if they ever exchanged messages with Deprived that could help identifying him.

Thanks. I've read threads that show he was a software developer (he wrote his own bot to profit out of other bots) but it's nice to get another data point. If you get any other tidbits of info send 'em in.

[Deprived]

OK guys, I'm not dead - and am back active.  Unfortunately will be away again from later today until late tomorrow but will make a start on sorting this mess out on the weekend.  As far as assets are concerned, the BTC I hold for the fund remain intact and untouched - as anyone can verify from the address.

Not sure what's happening with Ciphermine.B1 - but if Kate's paying dividends to Ciphermine then it looks like it may be a scam.  I say that because common-sense suggests Ciphermine is making a huge loss (its liabilities - denominated in BTC - are rising far faster than it can conceivably be mining coins).  If she's pretending its making a profit and paying dividends, hence increasing the extent to which it has negative equity, then that is defrauding bold-honders (paying dividends to equity holders when unable to service debt is basically fraud/theft).  The conflict of interest I referred to previously (in respect of me becoming invovled in her exchange) was basically that point - that it would be unwise for me to increase financial links with her with the likelihood of me having to initiate civil and/or criminal proceedings against her in respect of the bonds.

I'll give a more detailed update on the weekend and try to get the dividend calculation done in full by then - then decide how to proceed with the fund going forward.  After this week I don't expect any lengthy absences until at least May.

It'll take a bit longer to sort out relisting - as I'm now totally out of the loop on which exchanges are functional/trustworthy etc.

If anyone incurred costs taking legal advice in respect of my absence then please PM me and I'll look at reimbursing it (copies of invoices would be required).

[Rannasha]

Welcome back ^^

More frequent updates would be appreciated in the future

edit: With reference to CipherBond, I would suggest requesting the DMS-bonds to be bought back. It may cost 3 months of dividends, but since these are computed in EUR and the BTC/EUR rate has risen considerably since the inception of CipherBond, they don't amount to that much. And with the bonds sold back, a clean closure of the fund is an option if there is no reliable relisting location. And if the fund carries on, at least it won't do so with the burden of CipherBonds.

[zapeta]

Glad that you are back and that you are well.

[Bonam]

It'll take a bit longer to sort out relisting - as I'm now totally out of the loop on which exchanges are functional/trustworthy etc.

Welcome back. Havelock is your best bet in terms of an exchange right now.

[woodrake]

Not sure what's happening with Ciphermine.B1 - but if Kate's paying dividends to Ciphermine then it looks like it may be a scam.  I say that because common-sense suggests Ciphermine is making a huge loss (its liabilities - denominated in BTC - are rising far faster than it can conceivably be mining coins).  If she's pretending its making a profit and paying dividends, hence increasing the extent to which it has negative equity, then that is defrauding bold-honders (paying dividends to equity holders when unable to service debt is basically fraud/theft).  The conflict of interest I referred to previously (in respect of me becoming invovled in her exchange) was basically that point - that it would be unwise for me to increase financial links with her with the likelihood of me having to initiate civil and/or criminal proceedings against her in respect of the bonds.

As I have stated multiple times in the past, we cannot pay the CIPHERMINE.B1 dividends because the size of the smallest dividend (ie. one one hundred thousandth of EUR 340 in BTC), even with the amassed amount over the last few months, is below the minimum transaction limit. A quote from CIPHERMINE.B1's thread:

Apologies for both my absence (I have been very unwell) and for the lack of dividends. Unfortunately the siutation has not changed since I last updated you about it; the smallest dividend payment is still below the "dust" level / minimum transaction size level for the bitcoin network, and I therefore cannot send an aggregated payment. We have many single bondholders and even with an aggregated balance of several BTC now, one hundred thousandth of a few BTC is below the minimum transaction size which will be accepted by the network. This will not be a problem once they are on CipherTrade, but for the time being we're a bit scuppered.

For the time being please consider CIPHEMINE.B1 to be frozen. However, the dividends will still be paid and are being sequestered safely. They are still calculated based on the 30 day weighted moving average price (ie. you get more when BTC is rising, as it generally has been in recent months). I do have a conundrum now though in terms of how to keep the dividends now that I've simplified our approach re. CIPHERMINE divi calcs (ie. the BitStamp account gets completely emptied). Currently the CIPHERMINE.B1 divis are BTC in a cold wallet, which has been good for investors thus far but I understand that increases your risk.

I cannot do anything else right now, but CipherTrade is poised to launch after many delays so it will get resolved soon I promise.

However, should you wish to give us 3 months notice to redeem the bonds then please email bonds@ciphermine.com. The email must come from the email address associated with your old BTC-TC account. We will then send you a unique code to verify you do have possession of the account. Redemptions will only be made to the public withdrawal address associated with your BTC-TC account.

However, given DMS's large stake in CIPHERMINE.B1 and given that you've now reappeared, Deprived, I am willing to process those dividends manually. This offer is not extended to any other bondholders, sorry (there are too many). Also, if you'd actually been around and answering emails sooner D I'd have offered this to you directly sooner as well, but your email account appeared to be a black hole so I didn't bother.

Deprived, it is good to have you back, but frankly I'm astonished that someone of your caliber would cast such aspersions without checking the facts!

Further, CIPHERMINE.B1 and CIPHERMINE dividends are quite separate. We are making a profit under CIPHERMINE since that is based on what we mine, not what our outstanding liabilities are on our balance sheet! The only P&L cost associated with the bonds are the interest payments, which have been deducted from mining profits and, as mentioned above, have been safely sequestered away until such a time as we can pay them out.

Kate.

PS. For your convenience I've uploaded a PDF of the BTC-TC "contract" page for CIPHERMINE.B1, here. Unfortunately I did not forsee the possibility of the exchange failing/closing combined with this bloody minimum transaction limit getting in the way. In the circumstances we're doing the best we can (ie. building a new exchange so that your securities will be liquid again!). The entirety of the funds were spent on mining hardware, as planned.

[Lohoris]

Knee-deep in wtf-zone.

[eltopo]

Nice to see you back, Deprived, but... because no one asked:

Where the f*** have you been for several month without a chance to drop a few words here? 

[thy]

However, given DMS's large stake in CIPHERMINE.B1 and given that you've now reappeared, Deprived, I am willing to process those dividends manually. This offer is not extended to any other bondholders, sorry (there are too many). Also, if you'd actually been around and answering emails sooner D I'd have offered this to you directly sooner as well, but your email account appeared to be a black hole so I didn't bother.

Deprived, it is good to have you back, but frankly I'm astonished that someone of your caliber would cast such aspersions without checking the facts!

Further, CIPHERMINE.B1 and CIPHERMINE dividends are quite separate. We are making a profit under CIPHERMINE since that is based on what we mine, not what our outstanding liabilities are on our balance sheet! The only P&L cost associated with the bonds are the interest payments, which have been deducted from mining profits and, as mentioned above, have been safely sequestered away until such a time as we can pay them out.

Kate.

PS. For your convenience I've uploaded a PDF of the BTC-TC "contract" page for CIPHERMINE.B1, here. Unfortunately I did not forsee the possibility of the exchange failing/closing combined with this bloody minimum transaction limit getting in the way. In the circumstances we're doing the best we can (ie. building a new exchange so that your securities will be liquid again!). The entirety of the funds were spent on mining hardware, as planned.

Kate what is the base price EUR/BTC(at the time of the issue of CIPHERMINE.B1) that is used for calculating the dividend,.

If i understand things correctly the dividend per share should have been 3800 satoushi per share each week if the price at the time of the dividend would be exactly the same as at the time of the bond was issued. If for example the EUR/BTC price is at 5 times higher at a time to issue dividend it would then be 760 satouchi per share instead, still the only share holders that would not be able to get there dividend every week would be those having less than 8 shares or something, everyone else should be able to get there dividend every week without any problems, isen't that the case ?

Where is the list of dividend that should have been payed per share for the weekly dividends that haven't been payed out after the last payment that was on 24/11/2013(the date that you mentioned in your other post), it should be 15 weekly dividend if i got it right so unless the avg btcprice has been over 10-11 times what it was when the bond issued, everyone even those with only 1 bond should have got dividend during this period at least once, minimum transaction limit shouldn't effect that and everyone with more than 1 share should have got dividends more often.

[odolvlobo]

Now that Deprived is back, I propose that we vote to shut this operation down, somehow. This security is not viable without an exchange, and everyone would gain.

DMS.MINING shareholders would benefit greatly. According to the terms for a shutdown, DMS.MINING shares would get 365 times the daily dividend, which is currently about 0.00000066 BTC -- for a total of 0.0002 BTC. Thats is much more than they could get by continuing to receive daily dividends.

The DMS.MINING payout plus the unpaid dividends are certainly much less than the last price of a DMS.MINING share, so DMS.SELLING shareholders would get a decent return.

It's good outcome for everyone.

[ThickAsThieves]

Now that Deprived is back, I propose that we vote to shut this operation down, somehow. This security is not viable without an exchange, and everyone would gain.

DMS.MINING shareholders would benefit greatly. According to the terms for a shutdown, DMS.MINING shares would get 365 times the daily dividend, which is currently about 0.00000066 BTC -- for a total of 0.0002 BTC. Thats is much more than they could get by continuing to receive daily dividends.

The DMS.MINING payout plus the unpaid dividends are certainly much less than the last price of a DMS.MINING share, so DMS.SELLING shareholders would get a decent return.

It's good outcome for everyone.

He'd need to render all missing dividends before doing such, which would likely wipe out most reserves, no? I haven't bothered backtracking it all.

[stripykitteh]

I would expect there's more than enough btc in the wallet to bring DMS.MINING up to date, which should be Deprived's first priority.

It's anyone's guess when CIPHERMINE.B1 will be liquid or redeemable so I'm not sure what the go is there. I've given up waiting for the exchange and I'm trying to get mine redeemed.

I am glad you are OK Deprived, but you've aged me. If you disappear again I'll be resuming my inquiries to identify you, as you should expect.

[Rannasha]

Now that Deprived is back, I propose that we vote to shut this operation down, somehow. This security is not viable without an exchange, and everyone would gain.

DMS.MINING shareholders would benefit greatly. According to the terms for a shutdown, DMS.MINING shares would get 365 times the daily dividend, which is currently about 0.00000066 BTC -- for a total of 0.0002 BTC. Thats is much more than they could get by continuing to receive daily dividends.

The DMS.MINING payout plus the unpaid dividends are certainly much less than the last price of a DMS.MINING share, so DMS.SELLING shareholders would get a decent return.

It's good outcome for everyone.

He'd need to render all missing dividends before doing such, which would likely wipe out most reserves, no? I haven't bothered backtracking it all.

There's an estimate of outstanding dividends on page 87 of this thread. I don't know if it's accurate, but it adds up to ~380 BTC worth of dividends, where the NAV after the last dividend payment was ~414 BTC. So almost all funds are due to be distributed as dividends. Obviously, with two thirds of the BTC locked up in Ciphermine bonds, these payments can't be done fully. Not entirely sure what the process here is, but I assume that MINING holders can get paid, while SELLING holders have to wait for the Ciphermine bonds to be liquidated.

After the current outstanding dividends are paid, shutting down the operation is an option, but not one that is in the best interest of SELLING holders (unless they assume that MINING will earn more than 365 times the current daily dividend), so I doubt they'd vote in favour.

[chalbersma]

Might I suggest taking a look at 796.com for securities. It's licensed in Hong Kong so it shouldn't run into the same regulatory problems you saw with BTC-TC.