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Author Topic: Calling out the Bitcoin Foundation Scam.  (Read 21708 times)
MPOE-PR
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March 03, 2014, 08:37:03 AM
 #1

The Bitcoin Foundation was a large confidence scam perpetrated on the very naive, rather noobish yet very vain Bitcoin community cca 2012-2014 - and running for about as long as Pirate's ponzi.

It was thought out, constructed and initially run by Peter Vessenes, and then passed along to various accomplices. (Don't imagine that if I don't name you, we don't have the file. We have the file. You will be serving time, in all likelihood.)

It worked like so:

 1. Collect donations from the clueless yet vain. Because Bitcoin is full of people who belabour under the delusion that if they speak a lot about Bitcoin, if they paint "Bitcoin" all over the four walls of their dwelling and so on then they're somehow "part of Bitcoin". Charging these idiots a hefty fee for an "official" stamp of approval* is a logical next step, and it collected a massive warchest (even more than the thousands of BTC this forum - also run on MtGox servers - has collected for "software upgrades").

The CEO and Treasurer at the time, one Peter Vessenes simply pocketed this money. No report was ever published, no report will ever be published. More advanced than the MtGox scam, the Foundation is a "non profit" and it has no creditors, so nobody has standing to take them to court.

 2. Vouch for scams. It is very lucrative to sell protection; that's what most underworld kingpins do for a living. That's what the Bitcoin Foundation did for a living too, once the BTC price went up and the dubious character of the people running it became public knowledge (ie, once MP said so). With dwindling donation income and a never ending hunger for cash**, the Bitcoin Foundation was repurposed as a voucher for whoever could afford to pay. Like BFL. Like MtGox.

The only reason Pirate wasn't vouched for by the Bitcoin Foundation is that I killed him before he had a chance. The only reason the Patrick Harnett scammer didn't end up on their board is because MP killed him before he had a chance. The only reason Silk Road's guy wasn't vouched for by the Bitcoin Foundation is that he couldn't be bothered (or afford) to pay them. The only reason TradeFortress wasn't similarly has to do with cash. And this list could go on.
 
Think things through: it's not so hard to collect five thousand Bitcoin and then from that pay fifty to some clueless, famished nerd or other.

It's not hard to pretend like you're professional while you're lying through your teeth and defrauding everyone in sight.

It's not hard to pretend like you have "public support" when you're only talking to the clueless noobs that joined yesterday, who think Auroracoin actually "has a market cap" and so on. In a population of 19 yo Xavier Uni graduates, any lie can pass for truth if large enough and repeated often enough.

What is hard is to stand for something, what is hard is to speak the uncomfortable truths***, what is hard is to keep promises and to refuse to make promises that can't be kept and to tell would-be "powers that be" to pack it and move because Bitcoin is taking over.

But the Bitcoin Foundation isn't in the business of all that. The Bitcoin Foundation was in the business of taking money from they too stupid to keep it, and votes from they too clueless to have any money, and then sell the package to the highest bidder. Whoever it may be. Vessenes & co gotta be bought out after all, it's not like the shit they do has any intrinsic value whatsoever. Acquisition or bust, it's what they learned, it's what they do, it's what they'll teach you, if you'll let them. (And if you do let them you might as well use fiat, seriously now. It's easier, and insured.)

So now they're decamping to the UK in the hopes they may avoid US side prosecution, (a move deeply reminiscent of Vleisides, incidentally). Derp. You're all going to jail, boys and girls. You're all going to jail for being thieves, and liars, and con men. And to quote from a much older article of MP's (funny how that guy always wrote today's article months ago, isn't it?):

Quote
There’s just no way this little experiment in mishandling other people’s money can end up anywhere other than in a court, and there’s pretty good odds that it will be through penal rather than civil proceedings - the people involved are too many and too stupid for the state not to intervene.

Once that happens, I am positive and certain that the same people who are now running around calling their betters names will try to turn things into some sort of “mean state infringing on people’s rights”. They have a fine record at trying exactly that.

The problem is, the lot of them being packed up and hauled to jail would be no such infringement. It is at this point perfectly reasonable and quite unavoidable. Sure, they’ll try and sell this libertarian angle, that’s the curse of being pro-freedom : all the scumbags try to exploit you for their little profit turning “ideas”. It won’t wash. The girl that already beat you in the PR marketplace will beat you again, dear Sonny & co. She has the material right here.

---
* See this excellent quote from Chris Ballas:

Quote
And here I have to go back over something.  The harder part of the psychology is that the demo doesn't want to become full time traders, either at home all day or on Wall Street-- that part must remain a fantasy--  because then it would be a job and it wouldn't count; it has to be a side gig, then their success wasn't their "work self" but their "real" self;  no one else can claim a sliver of that success-- not the liberals with their "'entrepreneurs' just pretend they don't benefit from public services!" or the wives with their "behind every good man...!" or the echoes of their father yelling,  "you need to apply to Sperry Rand, now there's a company you can put in forty years with!"  It all happened in their head, no one else can share the credit, it is 100% a consequence of their personal value.    Bonus: if they fail, it can be quickly discounted as merely a hobby-- that wasn't, after all, their real self.

The mistake is in thinking this has anything to do with the money.  It's said that most at home traders fail, but this is incorrect: they fail at making money, but they are successful at feeling like a trader.  That is the goal; the money is secondary, which is why they fail at making it.  The buy/hold/reinvest the dividends strategy of Buffet is totally opposite to what's desired, because the strategy does not involve market timing or status updates, it is on autopilot, and there's no "i" in autopilot.  Well, there's one, but it doesn't stand out.

** This is the problem with scum posing as businessmen: the things they make aren't cash generators, they're cash black holes. This is fundamentally why we don't want scum to pass for businessmen: not because we don't like their ugly mugs, but because we don't want to be surrounded by "businesses" that only work if someone somewhere keeps printing money. We're not trying to re-build the US pseudo-economy here, quite the contrary.

*** From You Are The 98%:

Quote
There's a difference between what you need and what you want, and the media will always, relentlessly give you what you want.  Do you know why you have such poor candidates every single election?  Because you want them, you want someone you can easily judge for some sexual indiscretion or because they called latinos chicanos.  "Well, that matters to us!"  Then you got what you asked for.

The media will have data mined the culture and chosen for you two cans of Campbell's Chicken Soup, and then encouraged a public debate about which can is a better representation of the spirit of the country, the one on the left or the one on the right.  "Well, that matters to us!"  I know.  

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March 03, 2014, 09:48:40 AM
 #2

+ 1

We need to push this to the media so everyone should realize Bitcoin Foundation does not represent ANYTHING except themselves.

Its the shame they even name their "club" a Foundation

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March 03, 2014, 09:50:36 AM
 #3

couldn't agree more.

two of the core founders are known money laundering scammers.



isn't peter vessenes the dummy who didn't register coinlab as a money transmitter and lost $5 million of gox's money? lol!
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March 03, 2014, 09:55:08 AM
 #4

We should make our voice stronger. Make website to point out their scam. Post tweets and reddit to let the public know.

Make a warning in your signature to warn noobs on the forums
 
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March 03, 2014, 09:56:28 AM
 #5

whilst children feel the need to play in groups, adults should be there to regulate such gatherings and games.
I've never been one for clubs, groups, cults, sects or foundations... the mere thought of such a thing, where bitcoin in concerned, is simply ridiculous.

hell, i'm still in the denial phase 'what do you mean you sell bitcoins on an exchange???!!!'

decentralise. do it now.

tips    1APp826DqjJBdsAeqpEstx6Q8hD4urac8a
seanneko
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March 03, 2014, 10:21:04 AM
 #6

+1

The Foundation has never done anything for Bitcoin. They sit back and let the money roll in.
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March 03, 2014, 10:35:43 AM
 #7

Wow, such shocking exposé, wow

I hate to agree with the original poster, because I mean this in the nicest way, that most of your posts come off as an angry sociopath.  But when every other thread on the forum has the word "charity" or "donation" in it, you can tell something isn't quite right on a forum inhabited mostly by scumbag day traders.

So for your Christopher Columbo detective skills, bravo, partially exposed for no reason, angry, sociopath lady!

- the dread shibe r0ach

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doof
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March 03, 2014, 10:35:56 AM
 #8

Just start a new one.  Call yourselves "the official foundation", register a domain and go.
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March 03, 2014, 11:13:47 AM
 #9

http://dedecentralizationofbitcoin.wordpress.com/2012/10/05/de-decentralization-of-bitcoin/
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March 03, 2014, 11:45:35 AM
 #10


I thought there would be something more damning after reading all that, at least such as Charlie Shrem's eyebrows being a product of massive amounts of cocaine use.

Ironically, I think Voorhees just bankrupted himself at Gox.  And isn't a Bitcoincard just a QR barcode on a magnetic strip?  I'm not sure if the danger of fiat bitcoin exceeds that of the possibility (reality) of fiat gold if it became the world reserve currency.  Probably more likely that gold would be fractional reserve since it's more difficult to transport.  In the future, it's pretty obvious that fiat will probably be dead, and you will have crypto + gold taking over and co-existing to provide different security needs.  There will be multiple block chains as well.  If your NXT shilling has more provably secure systems against being fractional reserve, without compromising any other systems, then it's market share will eventually reflect that.


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pinkmonkey
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March 03, 2014, 11:55:07 AM
 #11

Also what happened to Theymos and upgrading the forum software with those $10 Million dollars donated to the forum???
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March 03, 2014, 11:56:13 AM
 #12

Also what happened to Theymos and upgrading the forum software with those $10 Million dollars donated to the forum???

i can only presume the funds were given the 'decentralisation' treatment.

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March 03, 2014, 11:56:55 AM
 #13

what is hard is to keep promises and to refuse to make promises that can't be kept and to tell would-be "powers that be" to pack it and move because Bitcoin is taking over.

Yeah it's what most hardware developers do in the bitcoin world. I don't like buying something that says it will be delivered on January and then in January I get told I will have to wait until October with the seller keeping my money hostage and refusing to issue refunds...
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March 03, 2014, 11:56:59 AM
 #14

Just start a new one.  Call yourselves "the official foundation", register a domain and go.

Or how about the Provisional Bitcoin Foundation to be followed by the Continuity Bitcoin Foundation and Real Bitcoin Foundation?  Grin
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March 03, 2014, 12:11:14 PM
 #15


I thought there would be something more damning after reading all that, at least such as Charlie Shrem's eyebrows being a product of massive amounts of cocaine use.

I predicted that this won't finish well. Now it's time to say:

Told Ya So
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March 03, 2014, 12:31:52 PM
 #16

isn't peter vessenes the dummy who didn't register coinlab as a money transmitter and lost $5 million of gox's money? lol!

Peter Vessenes didn't lose the $5.3M belonging to MtGox customers. He stole them.

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March 03, 2014, 12:46:25 PM
 #17

isn't peter vessenes the dummy who didn't register coinlab as a money transmitter and lost $5 million of gox's money? lol!

Peter Vessenes didn't lose the $5.3M belonging to MtGox customers. He stole them.

Given today's Gox's revelation of Gox's being capable of losing not only crypto but also fiat, it should be duly noted that $5.3 currently hold by Coinlab are safer with Peter Vessenes than with Mark Karpeles.
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March 03, 2014, 12:52:06 PM
 #18

It has become apparent that in a monetary system where possession is everything and it's trivial to move large sums to faceless and nameless accounts: everyone has a threshold where if they are handing a certain amount of money they will grab some or all of it for themselves.

Most of the big scandals in this community have turned out to be when someone got greedy and grabbed all the coins. When an "investment" or hardware production or exchange or webstore or whatever was closed because of "problems" it turns out later someone just walked off with the coins because it's so easy and most of the time nothing ever happens to them.

Well, they get a dreaded scammer tag. But only if they are not friends with someone important.

Entire subforums here are devoted to sites and services like this! Many people appear to realize it's games of musical chairs and just try to get in and out before the music stops. It's a bit sick.

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March 03, 2014, 01:02:30 PM
 #19

Interesting read. I'm with you on this. They should have been shut down long ago.

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March 03, 2014, 01:42:09 PM
 #20

Just like we have multiple exchanges across the globe, we need to have multiple foundations too...

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