[BTC-TC] BMF -- ALERT: BTC-TC SHUTDOWN

[usagi]

September 21st, 2013: DISCUSSION: Motion to list BMF.B1
September 17th, 2013: News Flash: LTC-ATF buys controlling state in BMF (link to full story)
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http://tsukino.ca/bmf/

In it's time, BMF was the largest and most successful investment fund in this community. I have relaunched it on BTC-TC, and I plan to do an even better job than before.

NEWS: June 25th, 2013
The contract has been approved by shareholder vote and we have 5 YES votes and are now trading.

Contract as approved by Shareholder Vote
(Note: If there is a discrepancy it is unintentional and the contract as voted on BTC-TC takes precedence)

Purpose:
BMF allows investors to safely diversify among a wide-range of mining companies in the bitcoin community.

Contract:
1. BMF will pay as distribution or reinvest 100% of the net income generated by trading and investment activity of the fund.
1b. (the 'BTCINVEST' clause, suggested by TaxReturn) The fund will place timely bids at 95% of the NAV. Holding bitcoins does not earn bitcoins, and the spread will go towards the fund. New shares of the fund will be priced at or slightly above NAV.
2. Payments are due on or before the 7th of every month for the previous month’s trading and investment activity.
3. The issuer reserves the right purchase back the security at 1.1 times the highest price the asset was traded over the previous month.
4. The fund is mandated to only invest in bitcoin mining companies and to perform due diligence when investing.

Transparency:
Transparency: The fund seeks maximum transparency by fully disclosing all assets held in the fund at any time:
5. We publish our spreadsheets. You must request access, and you may not publish or distribute the information to any other party.
6. An independent financial advisor will be hired to provide oversight and ensure that things are running smoothly.
7. A support e-mail address will be operated by the manager, to provide disclosure and give investors the tools they need to make their own decisions should anything be required.
8. Monthly reports will be published to the forums (and/or reddit or any other widely read news source).

Distribution:
The fund will pass through dividends received by the fund using a combined growth and income policy:
9. The fund will use approximately half it's income to buy more assets (growth via capital gains) and the rest to make payments (income via distributions).
10. Distributions must be paid within a reasonable time frame after receipt; within 7 days of the end of the month for that month's activity.

Net Asset Value:
11. The Net Asset Value (NAV) is the value of all assets in the fund plus the cash on hand.
12. The Net Asset Value per unit is the value divided by number of units outstanding. This is also known as NAV/U.
13. The Net Asset Value will be calculated based on our internal fundamental analysis process and due diligence and verified by the financial oversight advisor and/or Certified Accountant(s) hired to oversee the financial operation of the fund.

Governance:
Given that underlying assets held by the fund may periodically raise motions to vote,
14. This fund will vote on motions on underlying assets favoring the best interest of the fund.
15. Any shareholder of 5% or greater may request a motion for proxy voting the fund's shares of an underlying asset.
16. Any shareholder of 5% or greater may request a motion to be run at any time (limit: 3 per month, one re-run within 100 days).
17. Shareholders wield supreme executive power (i.e. shareholders may vote to replace management).
18. Motions require quorum of 60% or greater and majority vote of 60% or greater to pass.

Risk:
Although research has been put into each underlying asset, Mining assets in the past have been unpredictable. The fund's value relies on the the value of the underlying assets. If the underlying asset value decreases, the entire fund's value will also decrease. Additional risks to Mining assets include the price of Bitcoin, the price of mining equipment, the difficulty mining Bitcoins the Bitcoin reward per block, mining equipment upgrades, as well as many other risks. This fund does not hedge against any of these risks. Each shareholder must understand these risks before investing. Additionally, there may be undisclosed risks which the operator is or is not aware of. The operator will not be liable for any damages to the investor beyond the the value of the investor's position in the fund at the time of the complaint, as determined by market price discovery.

Fund Closure:
I. Closure clause. Management reserves the right to close this fund for any reason giving 30 days notice. All assets in the fund including unpaid dividends will be liquidated at fair value and paid to shareholders.
II. Buyback clause. Management reserves the right to force-buyback all units of the fund at 110% of the highest traded price over the last 100 days.
III. Exchange limited liability (the "GLBSE clause"). Management will not be responsible for damage caused to shareholders outside of management's control, i.e. by actions of the exchange.


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Management Ownership:
1. June 29th, 2013 -- purchase of 50 shares at an average price of 0.038 (total: 50 shares).
2. July 3rd, 2013 -- purchase of 200 shares on the open market at 0.0357 (total: 250 shares).
3. July 3rd, 2013 -- purchase of 200 shares on the open market at 0.0356 (total: 450 shares).
4. July 3rd, 2013 -- private placement of 400 shares at above market price (400 @ 0.036; see #3; total: 850 shares).

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[usagi]

FAQ (Frequently Asked Questions):

1. (from Deprived, paraphrase) "This thread is self-moderated. What does that mean?"
A: It means I can delete your posts but I cannot edit them. For clarification here's the entire moderation policy:

• No swearing.
• No excessively off-topic comments (no rambling).
• No scam accusations.

If you break these rules is I'll send you a PM requesting you make an edit. If you break them repeatedly I will simply delete your post. Regarding swearing, blotting out words is not an acceptable compromise. Just don't swear. Regarding scam accusations, if you have solid information that I or anyone is scamming, go post it on the scam accusations forum where it belongs. If you do not have solid information but are merely suspicious, please feel free to post a logical, well-thought out question. I'll be pleased to answer it and credit you in the FAQ. Note I am not a moderator or anything -- If you can't abide my local policies you're free to post whatever you want -- in your own threads.


2. (from Factory, paraphrase) "You said 'In it's time, BMF was the largest and most successful investment fund in this community.' That's correct if you consider 'successful' as losing a large portion of it's value. This is provable with basic math."
A: Simple. Now that BMF has listed again, I have donated more than 100 BTC worth of assets and bitcoins to the fund. By making investors whole in USD terms, with a USD gain of more than 20% over the past nine months since GLBSE shut down. No mining bond can compete with that offer. For example, during the rise of BTC from $5 to $10 and during the mining crash (around August 2012, IIRC) BMF fell 50% in value to 0.49 BTC, while issues like GIGAMINING fell 67% from 1.50 to 0.50. Ex. 2, YABMC, went from 0.35/share @ $10 ($3.50/share) to just 0.015/share @ $130. This is a loss in USD terms of around 44%. In roughly the same time frame BMF will have gone from 0.49/share @ $12.4 to 0.06/share @ $120. This is a gain in real terms of more than 20%. Yes, everyone lost money in terms of BTC because the price rose. But BMF took steps to protect the value of your investment, even if only in real terms.
You can see these figures for yourself on our Holdings & NAV page.
Update: It turns out there was one issue that did outperform BMF on GLBSE (but it wasn't a fund). It was MOORE. Friedcat ran it. Hindsight is 20/20, I guess!


3. How can I get access to financial information about BMF?
The fund seeks maximum transparency by fully disclosing all assets held in the fund at any time. Please read the "Transparency" section of our contract on BTC-TC. In short, any shareholder may request access to our spreadsheets at any time. Investors are also encouraged to send us an e-mail with their questions and concerns about the company. Talk to us -- we are the best source of information regarding BMF, and the only authoritative one.
Note: A spreadsheet is currently publicly available at: http://tsukino.ca/bmf/holdings-nav



Letters and Comments from our Shareholders (since relaunch):

The sheer amount of calories that usagi has spent trying to re-list is impressive. I look forward to some of those calories being spent on increasing shareholder value in the near future.

At least that you still make efforts for this after such a long time deserves some credit. Fingers crossed for you that you get it relisted.

I look forward to a relaunch and getting some additional shares.

Right, i got exactly 5 shares, still back from the GLBSE age when i was new to BTC trading. I am voting "Yes" for continuation of asset, both as shareholder and ltc-global moderator, didn't understand anyways, what the controversy was about. I hope that helps.

[usagi]

The Truth Thread

In a way I am sorry I have to do this. I really would prefer to ignore trolls. But look what happened when I ignored Deprived and friends in 2012 -- he and trolls just like him -- Ian Bakewell, BitcoinOZ and EskimoBob, among others -- caused enough damage that mods started harassing me and I could not get listed in BTC-TC for the first six months of 2013. Now the truth is out, Ian Bakewell is tagged a scammer, BitcoinOZ is known to have stolen NYAN's shares and abandoned his asset on BTC-TC, and EskimoBob's security immediately crashed 99.5% of it's value, these people still continue to bother me. Deprived in particular does not know when to stop.

After reading this you may wonder whether or not Deprived is mentally insane. Why does he bother me so much? It could be because I have discovered many discrepancies in the books for LTC-ATF (for example, see see here). Perhaps it is because I market make his security LTC-ATF.B1 and prevent him from selling shares at far above their book value as I have shown he has done in the past. But whatever the reason, I have had to suffer his malicious criminal libel for about an entire year now.

There's really not much I can do except expose him as a liar. Hence this one, simple post.

To keep it simple this post will contain accusations issued by Deprived since June of this year when I relaunched BMF, and will mainly contain accusations regarding BMF.

=====

1. Deprived claims that a list of assets stated to belong to BMF actually belongs to TU.SILVER
"Are you saying that those assets belong to BMF?  Or are those assets that belong to various of your assets (including TU.SILVER)?"
https://bitcointalk.org/index.php?topic=226650.msg2385638#msg2385638

Response: There is no logical reason for him to come to the conclusion, or even have the idea that the assets belong to TU.SILVER. Despite a rebuke in a following post, he goes on to harp on this several times as if I hadn't said anything.


2. Deprived claims I am refusing to provide information necessary to calculate any value for BMF.
"So you're asking for approval for an asset that has SOME assets but which refuses to provide information necessary to calculate any value for it." (ibid)

Response: Given that I had posted a list of assets, it is illogical for him to assume I am refusing to provide information necessary to calculate value for BMF.


3. He claims I am mixing personal funds with those of my companies.
"Usagi doesn't properly segregate assets belonging to different companies."
https://bitcointalk.org/index.php?topic=226650.msg2386676#msg2386676

Response: DeaDTerra and cusdog (and notably, pigeons, and notably twice, deprived(!!!)) have seen the TU.SILVER spreadsheets and it is exceedingly obvious that I keep meticulous records for TU.SILVER. Second, now that BMF is trading again it has been moved to a separate BTC-TC account.


4. He berates me because NYAN owns shares of BMF:
"It's doubly stupid when you consider that some of the other assets actually own shares in BMF" (ibid)

Response: I don't see a problem with this. In fact, DMS (Deprived's new issue) owns shares of LTC-ATF.B1. Looks fine to me.


5. Deprived claims I previously manipulated investors of my companies (and therefore I will do it again).
"...he did it before - manipulating share price up so as to justify (off-market) sales of his own shares by his own companies (in the process reducing the real value for all other investors AND destroying a contractual obligation..."
https://bitcointalk.org/index.php?topic=226650.msg2405911#msg2405911
"BMF had already been screwed to try to help CPA" (etc.)
https://bitcointalk.org/index.php?topic=226650.msg2407113#msg2407113

Response: The claims that I was manipulating share prices have been conclusively proven false by an investigation performed by BCB. Deprived agreed to give ALL evidence he had to BCB. After an extensive review which included me giving Theymos permission for BCB to undelete as many of my posts as he wanted, BCB and I had a chat on IRC where BCB stated in so many words that I am not a scammer, and that Deprived was likely part of an organized campaign to defame me. He then dropped the case after withdrawing that charge. In short anything Deprived says about how I misled, misrepresented, scammed, etc. anyone from when I was on GLBSE is a blatant lie. (That is also why I am mainly sticking to things he has said just this June, but he did say the above on June 7th. So be it.)


6. Deprived claims I am avoiding paying out on NYAN.A with the assets I have on hand.
"The BitVPS belong to Nyan not BMF.  If he's saying all BMF has left is cash then there's absolutely no reason why he couldn't liquidate - or at least buy back the shares held by Nyan/CPA with their portion of that cash.  To NOT do so is unnecessarily adding delay to paying Nyan off.  He's just stated BMF has no assets of significance left - so the only thing stopping him paying out Nyan is his own attempt to use the threat of delayed/non-payment as a crude tool to try to bludgeon moderators into voting yes."
https://bitcointalk.org/index.php?topic=226650.msg2406732#msg2406732

Response: The problem is I only have $10,000 but I have promised to bail out the investors for $100,000. Now, besides the fact that I am a really nice guy for saying I was going to do that, and Deprived is being a jerk for chastising me over not paying it immediately, the simple fact is that running my companies again and making money with them (which is why people run companies) is the cornerstone of the plan I have to pay back investors in NYAN and CPA. I am NOT "un-neccessarily adding delay to paying NYAN off". I am being extremely careful and wise with the resources I have left. If you notice, I have successfully gone after Brendio and gotten our BIB.BVPS shares back (Brendio was cordial). Next we went after Ian Bakewell and I can't talk about the proceedings but I am in fact involved. I started the thread for it too, go check. I obviously can't discuss who we are going after next or what information I have. But to state that I am avoiding paying people back is ludicrous. CPA just settled a 1100+ pirate contract and I am in active negotiations with several shareholders of NYAN and other companies. It is what it is, but it is not me avoiding paying any debts. I already sold $3,000 of my own personal gold and silver, my gibson guitar, etc. to help pay people off. To state I am avoiding paying people is really dumb. Sorry for saying that but Deprived really makes me mad with his lies.


7. He claims I abandoned NYAN/NYAN didn't do it's job/I essentially stole from Nyan/etc.
"Nyan sold its holdings of Nyan.A/B/C in off the market transactions then gave the cash back to CPA in return for cancellation of the shares in it.  In one fell swoop usagi totally removed a protection that Nyan.A and Nyan.B were contractually entitled to - to try to bail out CPA."
"Removing those assets - that were contractually supposed to protect Nyan.A/B - is little short of outright theft."
https://bitcointalk.org/index.php?topic=226650.0

Response: Wat? NYAN still owns about 160 shares of BMF and 80 shares of NYAN.A (and NYAN.A is basically made up of 2000+ BMF shares and 30,000 BITVPS shares plus associated debts). So NYAN is another great example of why BMF needs to be unwound first.
NYAN didn't sell anything, I don't know why Deprived is saying that. I didn't steal anything, don't know why he is lying about that either. Deprived is also clueless as to the relationship of NYAN and CPA. Contractually CPA insured NYAN, not the other way around. NYAN has gone nowhere since the crash. It's still there. It will be unwound along with NYAN.A and everything else once I get BMF back on it's feet. I have no clue why Deprived is babbling about NYAN.


8. He claims I am attempting to facilitate insider trading by charging people for access to BMF's books.
"Quote from: usagi on June 08, 2013, 01:18:10 PM
5. We publish our spreadsheets. You must request access, and you may not publish or distribute the information to any other party.
This has two problems:
1.  It directly faciliates insider-trading.  There will be a privileged (to the extent anyone sending BTC to usagi can be considered privileged) class of investors able to see accurate information on the state of the fund - and use it to trade with an advantage on the market.
2,  It creates an asymmetry of information.  If someone selling shares has access to the financical information then anyone without such information who wants to buy is forced into acting based on a much lower level of information/knowledge.  That means that they are forced to compete on the market and enter into trades at an unfair disadvantage."

Response: Deprived misread point 5, as I am not charging anyone. He then attempted to state what he "really meant"  
"he believes I'm accusing him of charging people to see his books.  I'm not."
https://bitcointalk.org/index.php?topic=226650.msg2416619#msg2416619
I had to point to him several times that point 5 is not limited to shareholders.
But beyond this, no, it does not create two classes of investors, facilitate insider trading, or any else of his ridiculous claims.
In fact, Deprived is on record stating that significant shareholders of LTC-ATF can ask to see it's books (although this may have been a lie; as a 12% shareholder he refused to show me his books).

And what's even more unbelievable is that he states in this message:
"The contract listed in BMF is not the one currently active - NOR is it the one he intends to have.  He has posted asking for advice on what should be in the contract - i.e. he wants approval before he's even ready to determine what the contract is.  So you're being asked to approve something that isn't even defined."
Yet in the post above this one he quotes the new contract for BMF which is listed on BTC-TC (html and all!) Is that nuts or wat?


9. Deprived claims I lied about providing liquidity to TU.SILVER/My advice to Tu.SILVER investors is to guess what the price is
"His advice to investors, BTW, is just to guess what the price is - put up an order and if he likes it he'll fill it. ... he long since gave up the pretence that he was going to provide visible liquidity..."
https://bitcointalk.org/index.php?topic=226650.msg2563958#msg2563958

Response: This is extremely disingenuous given my advice to investors in the TU.SILVER reports, archived here. It is clear that Deprived cannot read, because according to these reports not only do we publish (mostly) IFSA-compliant financial reports and give management guidance, we also advise investors to do due dilligence when investing in TU.SILVER and explain several possible scenarios. Just for example? Page 4 here. Just for example. That's from February, too. Is Deprived insane, or just trolling? I do not know. I know this. He states this about his own security DMS:
"1.  Work out a range within which they believe the correct valuation for each lies.  That means taking best and worse-scenarios... 2.  You then need to consider what alternative investments exist that offer returns you can rely on... 3.  You can then work out the zones above and below which investment makes sense. ..."
https://bitcointalk.org/index.php?topic=228327.msg2547675#msg2547675

This does not sound different at all from why I have said. I do not like hypocrites like Deprived.

Regarding liquidity, this and this (a quote from deprived!!!") "The reason for ANY change in the price of MINING/SELLING (other than a reduction because of a dividend being paid) is that the market (i.e. everyone investing collectively) has decided that the previous price was wrong." And this:

LTC-ATF is undoubtedly the better investment if you can buy it at a reasonable price - and therein lies your problem : noone wants to sell LTC-ATF at a reasonable price.

So we see Deprived understands market forces and liquidity very well, why is he attacking me over the same issues LTC-ATF, his own fund, is experiencing? There is no difference between TU.SILVER, DMS, BMF and LTC-ATF here. No asset issuer can control what people set their bids and asks for. All we can do as issuers is our best. TU.SILVER is a great example. We have over 20 people holding over 1100 outstanding shares and none of them wants to place an ask less than 2x NAV. That is not my fault. That is a sign that I am doing an exceedingly good job. Why is Deprived attacking me over that point when he has the same problem himself with LTC-ATF? Is he stupid?

Nevermind the repeated number of times I have published in the TU.SILVER reports that people with large sale orders should contact me so I can fortify the bid. Mind that Deprived understands that you can't force people to pay a low or high price, and spouts this fact to anyone who will listen (such as this poor sap) when it suits him, yet, he will turn around and use the anti-logic to condemn me for manipulating the price of my securities. I will say it again: I do not like hypocrites.


10. He claims I'm stealing from my companies
"Buy-backs (likely undisclosed) to drain cash (if you ever get any) to your other companies/yourself." (etc.)
https://bitcointalk.org/index.php?topic=226650.msg2574325#msg2574325

It's a little ridiculous for Deprived to misread "..personal account..me..I.." as myself using company funds to buy back units at an inflated price, but what's really unbelievable is that doing so will somehow transfer(drain) money to myself. So let me get this straight. Using my personal funds to buy shares in TU.SILVER from people at above market prices, is somehow transferring company funds to myself. This guy is a lunatic.


11. He claims I attempt to mislead investors by stating BMF is the top performing mining stock.
"Historically he's always claimed that BMF outperformed ALL mining stocks."
"He still continues to compare BMF to just about anyhting other than other funds.  At present he's trying to compare it to PMBs, bonds etc - but not a single fund.  Where are the meaningful comparisons - to things like BTCInvest or LTC-ATF?"
https://bitcointalk.org/index.php?topic=226650.msg2583755#msg2583755

The problem is, I didn't say stock, I said fund. See the FAQ. No, BMF was not the best share issue of all time, that is ridiculous and it is not what I said. Deprived knows this and is misquoting me to make me look bad. Read the FAQ (and the original quote in the OP) for yourself. Furthermore, regarding mining bonds, which is the historical comparison I make, it is very clear that BMF performed better than the PMBs from GLBSE and that it has performed better than them both recently and on a long term basis. GIGAMINING and YABMC being the classic examples. When Deprived posted this, he was fully aware of this chart, which he had deleted it from his moderated thread. He then made the above post. Unbelievable.

12. He claims it is difficult or impossible to determine how many outstanding shares exist for BMF.

It's now next to impossible to work out how many hsares of BMF are outstanding...the issuing account holds assets of Nyan/CPA as well as those of BMF...Usagi placed shares up for sale (and sold some) but it's impossible to tell whether they were new shares sold or ones that previously belonged to Nyan/CPA...I'll be making a request for trading to be halted if the outstanding shares issue isn't sorted - it's just not acceptable for something to run where there's no visibility of how many shares are outstanding.

The issue of how many shares are outstanding is an exceedingly simple one. The total number of shares is listed on our public disclosure page. This information is contained in our FAQ, so it is inexcusable for Deprived to pretend there is any issue whatsoever regarding the number of outstanding shares.

He makes a number of other claims in this post, such as "the issuing account holds assets of Nyan/CPA as well as those of BMF". This is a favorite tactic of Deprived, yet we know he is lying because he is aware the final claims thread (and similar threads). For example, he is aware of the disclosure of assets via his participation in the NYAN liquidation auction. He has also been made fully aware that the assets of BMF have been moved to the usagiBMF account while the assets of NYAN/etc. are in a different account. So this is not merely a mistake -- he is deliberately lying in order to defame me.

He's right on one thing though -- I placed shares up for sale, and sold some, and that it is impossible to tell whether they were new shares or sold ones that previously pelonged to Nyan/CPA. Let us all take a moment to thank Deprived, aka Dr. Obvious. Of course you don't know who is putting shares up for sale or who they belong to. Only I know that information because only I have access to the list of investors (and burnside I suppose). You can probably glean from the total number of outstanding shares listed whether or not the company has sold any (and it has, maybe 860 shares, not sure) -- but beyond that this information is confidential or I suppose BTC-TC would e-mail a list of shareholders to every investor. Unfortunately for Deprived this simply isn't an issue. Don't you wish he would just go away and stop making a fool of himself? Request to halt trading on BMF? Don't make me laugh, after the last 12 lies he told about me and BMF, he has less than zero credibility, it's actually gone negative.

[TaxReturn]

BTCINVEST has a line in the contract to the effect that bids will be placed at 95% NAV and the spread going back into the fund. I think that's a sensible move to facilitate exits and increase dividend for shareholders.

[usagi]

BTCINVEST has a line in the contract to the effect that bids will be placed at 95% NAV and the spread going back into the fund. I think that's a sensible move to facilitate exits and increase dividend for shareholders.

This is implicit (see clause #1). But I think I'll take your suggestion and add this wording to the contract. I believe it's a good idea to have it stated out in the open. This is how I manage TU.SILVER as well. I do think it's a good idea to allow investors to exit the fund if they need to sell in a hurry, without having to take a heavy loss.

Of course I can't always have a big bid up for the fund, so if anyone wants to sell once we re-list, send me a PM and I will work something out with you.

[usagi]

A few suggestions:

#11 and #12 seem inconsistent. #11 says NAV is the value per share and #12 says NAV/U is value per share. Just a typo I assume. Not a big deal.

#5 seems a little sketchy, unless you refuse to disclose the information to certain people. Otherwise, if anyone can gain access, why must it be kept secret? Personally, I think you must publish your balance sheet if you want to claim to be transparent.

Finally, while guaranteeing shareholder's investments in dollar terms is a positive aspect of the fund, glossing over BTC losses (as you frequently do) is deceptive, since investors invest BTC in your fund, the share price is denominated in BTC, and the accounting is done in BTC. Dollars are not relevant here.

I'll have a look at #11 and #12 (edit: fixed). The issue with #5 is simple; it's not sketchy, it's how things are done. I guess I spoiled people by offering full, 24-hour updated disclosure of how BMF operated the last time around. The problem with offering that kind of disclosure is that trolls will use it to lie about what I am doing. That's just a fact. At the least I can justify the position by pointing out we will still be offering the most disclosure of any fund -- including LTC-ATF, Deprived's fund.

Finally, while guaranteeing shareholder's investments in dollar terms is a positive aspect of the fund, glossing over BTC losses (as you frequently do) is deceptive, since investors invest BTC in your fund, the share price is denominated in BTC, and the accounting is done in BTC. Dollars are not relevant here.

  Dollars are relevant because mining hardware is always priced in dollars, and the core asset of BMF is mining hardware. This is a fact I learned when I ran BMF last year. You simply cannot deal with things entirely in BTC terms when the price swings from $5 to $250, which is what BMF saw over it's history. And I think we did a very good job compared to other funds and other issues. I think I have a duty to represent that. It's a great advertisement. I haven't been dishonest, I have stated by how much we fell in BTC terms. What I am trying to do is show in what ways BMF can add value to the community and to BTC-TC. BMF (as with any well-run fund) adds value by tilting the odds in the investor's favor. But no one can turn a lemon into a lambroghini. If mining crashes, everyone is going down.

But what is really interesting to me is that long term, BMF didn't actually lose money in terms of real value (currency) but that it was able to use BTC as a payment system to get investor's money in and out of BMF. And that it was able to give them a positive return. So I will have to disagree. If you can't peg BTC to a (relatively) stable price, you have no right to complain that mining funds lost money in terms of BTC. It's like that guy that keeps demanding Butterfly Labs refund him in BTC from last year's orders. Yeah that would be nice, wouldn't it! Never going to happen.

Thanks for your comments odolvlobo. Your questions make me think and it's refreshing to see an LTC-GLOBAL moderator get involved.

[usagi]

USD terms are irrelevant to calculating ROI on an investment not denominated in USD. I'm honestly shocked that you either refuse to acknowledge this or fail to grasp the simple concept. BMF had USD exposure via hardware and other obligations- but that is basic currency risk, and does not mean that the ROI should be calculated in USD.

You made a mistake; we don't calculate ROI in USD. Please see the FAQ, question #2, which states "...during the mining crash (around August 2012, IIRC) BMF fell 50% in value to 0.49 BTC". Now, I've created a FAQ topic which answers your concern; this side of the discussion is pretty much done.

Anyway, I think it would be more positive if you take a look at the contract and give me some suggestions. There are other mining companies and mining funds in the community now. I'd love to hear what you think I should do differently than any other fund. I want to do things "right" so your suggestions would be very welcome.

Here are points I believe you honestly need to focus on:

1. [snipped -- already answered]

2. Make your financial statements for BMF completely open and create a clause stating how often you will publish them. You can not possibly claim "the fund seeks maximum transparency" if people have to request access to financial statements.

Done (see FAQ Question #3).

3. Create a detailed plan illustrating what exact goals and clearly defined methods of reaching those goals. This gives you and investors benchmarks to gauge efficiency and effectiveness.

Great idea. I will post this in "Business Description" on BTC-TC.

4. Illustrate methods of how you will handle currency risks. Currently the contract says "oh, we just aren't going to do that." Without any kind of hedging and management of these risks, BMF will be unable to function with any sense of stability and will likely experience severe losses.

Interesting idea. Of course we don't bother to handle currency risks in the mining sector because a) no one does, and b) it's probably impossible. The only way to handle currency risk is to hold a significant portion as currency, and that is not the stated goal of BMF. But, I will think about this for a while, and, if you have any ideas I am all ears.

5. Develop and disclose a concise plan for deciding capital management. This includes dividends, buybacks, cap-ex, etc. This should be tightly tied to points 3 & 4.

Those are just a few ideas to get started.

Capital management is covered in our contract (see #9 in the contract above). I've already requested burnside to change the contract on BTC-TC yesterday.

[usagi]

Quick update:

3. How can I get access to the Holdings & NAV page?
To make things simple and transparent we've opened our portfolios on BTC-TC and LTC-TC to the public. You can view them at:
BTC-TC: https://btct.co/portfolio/gbo5Dg==
LTC-TC: https://www.litecoinglobal.com/portfolio/fsA1Dg==

I've taken the liberty of moving over the re-list securities so you can see what we will be starting with.
As soon as the security is approved for trading, the shown assets will instantly become property of BMF.

My estimates indicate a 2.54% ROI and the ability to sustain a daily distribution payment of 0.00001 per share while investing 0.00001 as well. As a result I have gone ahead and scheduled payments for the rest of June. If you're a BMF shareholder, you will now start receiving daily payments.

Check it out, the schedule is for the next 15 days: https://btct.co/security/BMF (click on 'history' to see scheduled payments).

Thanks and have a nice day!

[usagi]

Quick update.

I've done some calculations and determined that the remaining value of BMF shares is going to wind up at approximately (edit: 0.0361) per unit. This doesn't include the 0.0873 already paid out and more to be paid in June. (Note: There are about 40 un-invested BTC in the account right now, and we follow a 50%-50% program of reinvestment and dividends).

As a show of good faith, until the end of the month I am willing to manually buy back shares at this price on a first-come-first-served basis -- which is what the market would be like if we could trade. Hopefully by that time we will list and I can just place the orders on the exchange like a normal person  

If you think BMF is worth more than this, just send me a PM with how much you think it's worth, and we can discuss that. I'm also more than willing to discuss it here in the thread. So if I missed something, let me know! Thanks and good luck.

[usagi]

All BMF shareholders please vote. Please visit https://btct.co/security/BMF and click on "Motions".
-----
Motion for New Contract
Begins: 2013-06-11 13:48:15 (JST)
Ends: 2013-06-30 00:00:00 (JST)

This vote will run for the month of June.

In order to do things right, we should vote on our new contract. Please be aware that a YES vote also implies you wish BMF to relist, and a NO vote implies you don't want it to relist. This vote may or may not affect LTC-GLOBAL moderator sentiment. Please carefully review our new contract on the DETAILS page. You may change your vote at any time prior to closing.

I've also decided to permanently donate the current holdings of the usagiBMF accounts to BMF regard. This means that the outcome of your vote will not affect how much money you will recieve. After the 100BTC in assets I've donated to relaunch the fund, the current NAV/U of BMF stands at approximatelty 0.05. There have been 0.0873 already paid to investors.

Of course I would love to relaunch the fund, and I hope you can see I am trying to do the right thing here.

Management suggests that you vote YES.

[usagi]

Now that I've stabilized the value of the fund, it's possible to start publishing results again to see how we're doing. These are from the internal calculation which we use to internally price the units, and you can always verify the holdings for yourself by checking our public portfolios (see FAQ). I'll be updating these figures each week as well as reporting the dividends paid.

June 13th, 2013: 0.03610483 NAV/U (3,822 outstanding shares).

As a reminder, we are currently buying back shares at and above this price -- PM for details!


----

Edit: June 25th udpate:

All of Usagi's securities have a long track record of failure.

Go through and read a few of Usagi's posts and you can see that he has a tenuous grasp of finance.

Don't compare Deprived's listings to Usagi's.

No, let's. It will be very educational. A date of June 13th was chosen since it marked the date I published a NAV for the reconstituted BMF.

ISSUE	JUNE 2013	TODAY	CHANGE	RANK	NOTES
ASICMINER (G-PT)	2.75	3.5	27.27%	#1.
BMF	0.0361	0.0376	4.03%	#2.
COGNITIVE	0.3000	0.3087	2.90%	#3.	COGNITIVE is non-deterministic, like BMF.
LTC-ATF.B1	0.48	0.46	-4.17%
DMS.MINING	0.0183	0.017488	-4.44%		Start date June 18th
S.DICE (G-PT)	0.0027	0.0025	-9.42%
PAJKA.BOND	0.0880	0.0500	-43.18%
TAT.VIRTUALMINE	0.0073	0.003403	-53.38%		Start date June 13th on BitFunder, 20th on BTC-TC
B.YABMC	0.0125	0.0040	-68.00%

[usagi]

Quick update;

Thanks to the turnout of shareholder support, it seems we've won over one of the ABSTAIN votes to our cause.

Now, we just need the moderator who promised to vote YES if we publish a list of holdings. Should he or she vote YES, we will have five votes.

With that in mind, here again are our list of holdings which are published in our FAQ and on our webpage:

BTC-TC: https://btct.co/portfolio/gbo5Dg==
LTC-TC: https://www.litecoinglobal.com/portfolio/fsA1Dg==

The above are the entirety of BMF assets.

Code:

(Jun 5):
A peer voted NO on your security: BMF
Their public comments: Cannot approve.  Clean things up, then maybe.
Their private comments: I'll change this to a yes if you provide a link to the updated spreadsheet in the prospectus.
If you get NO votes, you may need to improve your Business Plan.

Actually it looks like they want it in spreadsheet form so JUST in case they're hinging on that I will provide a link to that. It will be here in a few minutes:

http://tsukino.ca/bmf/holdings-nav
(edit: it's up!)

[usagi]

Hello everyone.

Thank you to my shareholders for unanimous support with a 80% quorum (I did not vote with personal or company shares).

Thank you to the LTC-GLOBAL moderators for voting yes.

To kick things off I have placed bids for 10% of the fund at an average price close to book value. I will be reviewing these bids and updating them as time goes by. My plan is to make better and better bids (raise the average) and make the market until liquidity is established. BMF will not sell any shares until we've bought back a significant number of shares from the market. So for example, someone currently has a bid above my highest bid, and BMF will not be selling into that bid order.

Second point. As we have just relisted, there are several aspects of the contract which we are currently unable to follow. Here are three examples. I expect that all contractual obligations will be able to be fufilled by the end of July 2013. As always you are free to ask me for more information, that's why I am here. I just like to keep things short and sweet in official announcements.

Example 1:
4. The fund is mandated to perform due diligence when investing.
We will be reviewing the assets of the fund and interviewing fund managers as time goes by, but we will not be able to complete an initial review for at least two weeks.

Example 2:
5. We publish our spreadsheets. You must request access, and you may not publish or distribute the information to any other party.
We currently have the books open to everyone without restriction. At some future time, we may resume our contractual obligation. Until then we feel an open books policy is best. We will review this policy on a monthly basis.

Example 3:
6. An independent financial advisor will be hired to provide oversight and ensure that things are running smoothly.
Anybody want a job? We'll post an official announcement later.

There are other minor points (for example, the average price right now is zero, so can I buy the fund back for 1.1 times zero? No   don't worry) but that's the deal right now. Please leave your questions and concerns right here. Thanks and good luck.

=====

ISSUE	JUNE 2013	TODAY	CHANGE	RANK	NOTES
ASICMINER (G-PT)	2.75	3.5	27.27%	#1.
BMF	0.0361	0.0376	4.03%	#2.
COGNITIVE	0.3000	0.3087	2.90%	#3.	COGNITIVE is non-deterministic, like BMF.
LTC-ATF.B1	0.48	0.46	-4.17%
DMS.MINING	0.0183	0.017488	-4.44%		Start date June 18th
S.DICE (G-PT)	0.0027	0.0025	-9.42%
PAJKA.BOND	0.0880	0.0500	-43.18%
TAT.VIRTUALMINE	0.0073	0.003403	-53.38%		Start date June 13th on BitFunder, 20th on BTC-TC
B.YABMC	0.0125	0.0040	-68.00%

[usagi]

Hello;

There is a pressing issue that I face with BMF today which I have chosen to come to the community for advice about.

There is no market for BMF shares. I don't mean that no one wants to buy them. I mean no one wants to sell the shares they have. I know the shareholders are out there because of the massive turnout of votes we got on the last motion. I've tried to entice selling by placing bids at 10% and 20% above NAV but that doesn't seem to do the trick. What's worse, there is a single bid for 10 x 0.5 up. That's more than 10x what our NAV is right now. God forbid someone buys at 0.5, I would just feel bad. That isn't my ask.

So unless anyone has any comment why I shouldn't do it I think I will place a wall up at a bit over NAV and use the cash to buy back more shares. At least that will allow anyone who wants to get out to get out faster. I'm beginning to think it's the right thing to do, I'm just concerned it's a little too soon after re-listing. I had really wanted to buy back a significant number of shares first.

Comments welcome. Good luck!

[Factory]

I've tried to entice selling by placing bids at 10% and 20% above NAV

So unless anyone has any comment why I shouldn't do it I think I will place a wall up at a bit over NAV and use the cash to buy back more shares.

You should not be doing this for the most fundamental reason:

You are offering to pay 110-120% for 100%. By doing this you are destroying the underlying value for shareholders.

[Peter Lambert]

I've tried to entice selling by placing bids at 10% and 20% above NAV

So unless anyone has any comment why I shouldn't do it I think I will place a wall up at a bit over NAV and use the cash to buy back more shares.

You should not be doing this for the most fundamental reason:

You are offering to pay 110-120% for 100%. By doing this you are destroying the underlying value for shareholders.

Unless you are putting up the bids using your own money, instead of the funds money, and then it would be silly but not as bad as wasting the fund's money on buying back overpriced shares. Do you need to get shareholder approval before selling more shares?

[usagi]

Dear Investors;

I just got back from surgery. That was fun. they were supposed to knock me out for it, but they didn't. I was awake, but I didn't feel anything. They showed it to me after the surgery. It looked like Chinese food. I'm allowed to say that because I live in Asia :p The doctor gave me happy pills. So that should answer anyone's concerns as to my well being (or ill being); I have happy pills. I'm fine.

Regarding BMF; A few quick observations, and a few quick updates.

1. No one's selling.
--> No one seems to be selling into company bids so I have reduced company bid from approx. 600 units to 50. This will change in the future appropos to demand.

2. No one's buying.
--> Actually someone bought a few shares in the previous days. But overall I expected volume to be higher. *shrug* I'm willing to work with what I have.

3. BMF's assets: A real mix.
--> We have a large amount of fixed interest ("face value") bonds such as BTC-BOND, LTC-ATF.B1 and B2, etc. Some people have criticized me for investing in those. While it's true we hold a lot of fixed interest (and a noticeable investment in just-dice) the reason we hold them is because those are the assets I donated to restart the fund. This is the plan; start from a position of strength (fixed-face-value, fixed-interest) and move into the riskier mining as it is safe and prudent to do so. If you watch our portfolios (they are open to the public) you will notice we are slowly accumulating mining bonds and mining companies. This is a much safer plan than I employed during the GLBSE days. In particular, we will initially favor fixed-interest like FIMB or non-deterministic companies like BASIC-MINING or COGNITIVE.

4. Hedging policy: Second thoughts.
--> All this has the effect of allowing us a slight hedge against the BTC price. This worked for TU.SILVER and I aim to make it work for BMF. I am waiting to see which way the price will move. It's my hope that BTC will go up, and that the fixed value investments will pay off. Until that time we will accumulate mining companies and mining bonds. Such that if the price falls those assets will strongly increase in value. I believe this is a safe and prudent strategy, but of course I am open to other ideas. Any comments from shareholders are welcome.

--> Due to our current asset mix and the complete unreliability of VIRTUALMINE and MINING (losing 50%+ in just 2 weeks) we've considered investments in more reliable securities like RTM and PAMB. TradeFortress' excellent BTCINVEST fund is also on the list, pending review. Although assets like RTM and PAMB have also been adversely affected by the new "virtual" mining assets (assets without any actual hardware) it's my experience that assets like these, run by long-term and very trustworthy members of the community, tend to fare a lot better than these new startups. Also looking strongly at FIMB and COGNITIVE again, because Garr has shown himself to be humble and stalwart in the face of crisis -- which we like.

--> The long and short of this is i'm planning on keeping a decent chunk of the fund in fixed interest/face value simply to preserve capital and ease into mining over the medium term. I don't want to risk another mining crash. I'd also note that much of the fixed interest is already based on mining (LTC-ATF, FIMB, etc.) We will move into daily interest bonds like RTM and PAJKA.BOND first, to retain a strong income stream.

5. Increased daily distributions
Although the HWM is down from the last couple of weeks due to failed investments in MINING and VIRTUALMINE, they do still pay a very nice dividend. So I increased the daily distributions we pay for the next couple of weeks. This is a policy of allowing the shareholders to decide what to do with their money in uncertain times. If they feel BMF is the place to be, I'm sure they will buy more BMF. But I think it's better right now to give shareholders the option. Later on I might take a slightly larger percentage for reinvestment but not today.

I remain available to answer any shareholder's questions. Just send me a PM. I'm particularly interested in anyone who is interested in providing oversight for the fund. We still need to hire a financial oversight advisor.

[usagi]

p.s. I just bought some BTC nam, will be buying more BTC-BOND for BMF. Thanks!

I was wondering where those daily dividends on BMF were coming for. Guess that answers it.

  Actually I would not mind at all if that's where the divs were coming from. But we only hold 130 BTC-BOND right now. At this stage I would prefer to hold about 1,500 (10%-15%) of the fund in BTC-BOND, but we will have to move there slowly.

Some facts; BMF pays 0.03567 total dividends per day over 2378 shares. This is just under 0.25 btc/week. Backing this are the following income streams:

1. DMS.MINING: 0.36184492
2. DMS.PURCHASE: 0.17039073
3. PAJKA.BOND: 0.08674834
4. ESECURITYSABC: 0.0716
5. YABMC: 0.06325615
6. BASIC MINING: 0.01128653
7. BTC-BOND: 0.000576
8. LTC-ATF.B2: 0.00035
9. TAT.ASICMINER: 0.00048198
(actual income received into the BMF account over the last 7 days except in the case of ESECURITYSABC which is an estimate).

Income: 0.76653465
Distributions: 0.24969
Reinvestments: 0.51684465 btc / week

This works out to around 0.5%/week, just with what we have invested on BTC-TC. I don't expect mining income to remain so high for very long which is why I am slow to pay out more; although I am a little torn over that. Looking at these figures afresh for the first time in weeks I think I might be able to pay out a little more than we are now.

[usagi]

BMF Share Buyback Program
July 27th, 2013

In addition to increasing value by investing in the mining sector and carefully trading our holdings when appropriate, I have decided to give our loyal shareholders a perk in the form of a buyback program. During the month of August:

1. The company will not sell new shares of BMF into the market.
2. Bids will be placed for a limited number of shares between 100% and 120% of the company's NAV.
(You can see all our assets on our holdings and NAV page.)

I cannot give you advice on whether to buy or sell BMF but I can guarantee that this offer represents a significant premium to the value of our holdings.

A big thanks to everyone who helped us get this far!

[Peter Lambert]

BMF Share Buyback Program
July 27th, 2013

In addition to increasing value by investing in the mining sector and carefully trading our holdings when appropriate, I have decided to give our loyal shareholders a perk in the form of a buyback program. During the month of August:

1. The company will not sell new shares of BMF into the market.
2. Bids will be placed for a limited number of shares between 100% and 120% of the company's NAV.
(You can see all our assets on our holdings and NAV page.)

I cannot give you advice on whether to buy or sell BMF but I can guarantee that this offer represents a significant premium to the value of our holdings.

A big thanks to everyone who helped us get this far!

How can you buy back at over NAV? Wouldn't that just mean that 80% of the shareholders get all the money, leaving 20% with worthless shares?!?