I'm done with Bitcoin Securities...

[Puppet]

I'm shocked that even in hindsight people don't see the signs...  Reputations are earned through time and honest dealings, not with identifications and promises.

Doesnt guarantee a thing. Dont you remember the 'why I trust Patrick Harnett" threads,  Pirate had the top rating on OTC, and have you seen JohnK lately? If a contract isnt enforceable by legal means, you can bet on getting scammed sooner or later.  AM may be the proverbial exception that proves the rule. So far.

[dpb]

I do not blame you one bit. Those suggesting that NEO-BEE was an obvious scam either are insiders that are in on it, or they are just spouting off rubbish. This does however highlight a problem with Bitcoin Securities in that there is little recourse once these come to light. All the due diligence in the world cannot protect you from a clever liar. This is why we need the heavy hand of government to start regulating these Bitcoin securities.

Libertarians are deluding themselves if they think a world with minimal government would function. Such a world would be very inefficient for investors and we all would be spending large amounts of time on due diligence for each of our funds only to find out we have been lied to anyway. Investors would soon all become leery due to high amounts of fraud and losses, and investment capital would dry up. Investors would retreat and progress would suffer.

Even with overseers fraud still occurs (Madoff), but on a much smaller percentage overall scale than with Bitcoin securities. I too will not be putting any further BTC into Bitcoin Securities until there is some better and proven vetting process in place. No process is 100% effective, but until Bitcoin Securities approach an acceptable level of trust through vetting by a commission it seems too risky to consider investing in them.

What can the state do to prevent these kinds of scams? Why can't that service be provided through voluntary interaction?

Why do you suppose you have a right to invest without "spending large amounts of time on due diligence?"

Somebody has to put the work in to do that "due diligence." If it isn't you, you'll have to pay a premium for that service. By suggesting that the state should be responsible for this, you are advocating the use of violence against your neighbor in order to force him to subsidize your investments..

I think it's worse to bake violence into the system for the purpose of protecting idiots from themselves.

[solomon]

I don't see how Neo was an 'obvious scam'. If i was going to cut and run I wouldn't waste a load of money on office space, employees and newspaper and TV advertising after the IPO was closed. A flawed business plan possibly but a scam from the start, I don't see it.

[OgNasty]

I'm shocked that even in hindsight people don't see the signs...  Reputations are earned through time and honest dealings, not with identifications and promises.

Doesnt guarantee a thing. Dont you remember the 'why I trust Patrick Harnett" threads,  Pirate had the top rating on OTC, and have you seen JohnK lately? If a contract isnt enforceable by legal means, you can bet on getting scammed sooner or later.  AM may be the proverbial exception that proves the rule. So far.

Well, common sense has to play a role as well.  Is there anyone who thought Patrick Harnett & Pirate were doing honest dealings?  I certainly hope not.  Pirate came out and said not to trust him several times as well as hinting that he was engaging in illegal activity.  Even TradeFortress' lending site didn't pass the sniff test.  I also suspected ukyo & graet were trying to get rich playing the spread between their loans and the ones TradeFortress was brokering and thus kept a close eye on them selling off my stake as soon as they became unresponsive.  

I don't see how Neo was an 'obvious scam'. If i was going to cut and run I wouldn't waste a load of money on office space, employees and newspaper and TV advertising after the IPO was closed. A flawed business plan possibly but a scam from the start, I don't see it.

Perhaps scam is a bad description.  It was obvious that the operation was a money furnace and of course you would waste money on advertising after the IPO.  You don't think all those shares were sold to investors do you?  They needed to appear legit to continue dumping their own shares after the IPO.

[velacreations]

Perhaps scam is a bad description.  It was obvious that the operation was a money furnace and of course you would waste money on advertising after the IPO.  You don't think all those shares were sold to investors do you?  They needed to appear legit to continue dumping their own shares after the IPO.

If that's the case, why didn't they sell out?  They still had a ton of shares that didn't sold, and they certainly had enough coin to buy them all.

[velacreations]

I only ever had one escrow deal with JohnK, and yes, he paid from the same address we sent to.  To be totally honest, I had no idea he was gone.  Is there a thread link somewhere? 

[OgNasty]

Perhaps scam is a bad description.  It was obvious that the operation was a money furnace and of course you would waste money on advertising after the IPO.  You don't think all those shares were sold to investors do you?  They needed to appear legit to continue dumping their own shares after the IPO.

If that's the case, why didn't they sell out?  They still had a ton of shares that didn't sold, and they certainly had enough coin to buy them all.

Maybe the demand wasn't there to sell out and they had better plans for those coins?

I only ever had one escrow deal with JohnK, and yes, he paid from the same address we sent to.  To be totally honest, I had no idea he was gone.  Is there a thread link somewhere?  

There are several threads about it.  His main thread is a good place to start.

[velacreations]

Perhaps scam is a bad description.  It was obvious that the operation was a money furnace and of course you would waste money on advertising after the IPO.  You don't think all those shares were sold to investors do you?  They needed to appear legit to continue dumping their own shares after the IPO.

If that's the case, why didn't they sell out?  They still had a ton of shares that didn't sold, and they certainly had enough coin to buy them all.

Maybe the demand wasn't there to sell out and they had better plans for those coins?

no, what I mean is if they are buying their own shares, why didn't they buy all of their own shares?  why only buy a fraction?

[OgNasty]

no, what I mean is if they are buying their own shares, why didn't they buy all of their own shares?  why only buy a fraction?

Why would they buy them?  That would've been like Pirate investing his personal funds in his ponzi...  I think you misinterpreted what I meant.  I was insinuating that they had to continue spending money to keep people buying the shares.  Once outflows passed inflows, it was game over.

[MonkeyBear68]

Why do you suppose you have a right to invest without "spending large amounts of time on due diligence?"

Because he's a fucking moron.

Personal attacks aside, you have just proven my point. Investors will not each want to spend large amounts of time in order to personally vet each of the funds they are considering. This is when a trusted commission that carries out some basic vetting functions comes into play. Nobody is claiming investment is a right. What it comes down to though, is that people with the money or BTC to invest will stop doing so if they personally need to spend hours checking out the backgrounds of all that are involved in a new investment. A simple investor does not even have the power to get the required information to do so.

Even if you consider a running a simple criminal background check, your method implies that each investor should have to do this on their own. This is very inefficient as compared to having a central trusted commission do this vetting. You would have to be a f*cking moron to think otherwise. In the Libertarian world we would spend ALL our time doing trust checks on everyone else and nothing real would get done because everyone would be too busy with due diligence. This is when the big stick of the law comes in handy with a good smack across the arse of the scammers and anarchists!!

Actually in seeing how Libertarians operate I am beginning to think more and more that these anarchists simply want the ability to set up scams and go unpunished because they think there should be no law and that everyone should exercise due diligence on their own. From what has happened more and more in the Bitcoin world it is becoming apparent that:

LIBERTARIAN = SCAMMER!
ANARCHIST = SCAMMER!

As a C++ programmer, I still think that Bitcoin and the Blockchain are some of the greatest inventions in programming. I really hope that Bitcoin survives the filth that has been attracted to it from unsavory groups!!

[velacreations]

Why would they buy them?  That would've been like Pirate investing his personal funds in his ponzi...  I think you misinterpreted what I meant.  I was insinuating that they had to continue spending money to keep people buying the shares.  Once outflows passed inflows, it was game over.

yeah, I did misunderstand.  I thought you meant that they were buying their own shares to create buzz or something.

I have a hard time believing they spent 10K+ btc in a month.  The IPO ended the day before the branch opened.

[MonkeyBear68]

Hey moron, as I just told you:

Plenty of utter crap has been sold by the overly regulated banking industry. Regulations do not prevent or repair damages from scams, either.

You just want to blame anything else but yourself.

Of course there is crap in traditional investments, but not to nearly the same percentage that there is in BTC Securities. I have dealt with plenty of both types of investments to know that most of the crap is in BTC Securities.

Perhaps we need to start getting all those that want to introduce a security to have to put up insurance that will protect investors. If we all were omniscient then we could exercise due diligence. We need some sort of system of trust that can be relied on. Regulations do prevent scams as we would have much more scams if we did not have the threat of sanctions. I am not certain what the perfect system would be, but letting it simply be a free-for-all is not the solution.

[dpb]

Why do you suppose you have a right to invest without "spending large amounts of time on due diligence?"

Personal attacks aside, you have just proven my point. Investors will not each want to spend large amounts of time in order to personally vet each of the funds they are considering. This is when a trusted commission that carries out some basic vetting functions comes into play. Nobody is claiming investment is a right. What it comes down to though, is that people with the money or BTC to invest will stop doing so if they personally need to spend hours checking out the backgrounds of all that are involved in a new investment. A simple investor does not even have the power to get the required information to do so.

Even if you consider a running a simple criminal background check, your method implies that each investor should have to do this on their own. This is very inefficient as compared to having a central trusted commission do this vetting. You would have to be a f*cking moron to think otherwise. In the Libertarian world we would spend ALL our time doing trust checks on everyone else and nothing real would get done because everyone would be too busy with due diligence. This is when the big stick of the law comes in handy with a good smack across the arse of the scammers and anarchists!!

Actually in seeing how Libertarians operate I am beginning to think more and more that these anarchists simply want the ability to set up scams and go unpunished because they think there should be no law and that everyone should exercise due diligence on their own. From what has happened more and more in the Bitcoin world it is becoming apparent that:

LIBERTARIAN = SCAMMER!
ANARCHIST = SCAMMER!

As a C++ programmer, I still think that Bitcoin and the Blockchain are some of the greatest inventions in programming. I really hope that Bitcoin survives the filth that has been attracted to it from unsavory groups!!

A criminal background check would not expose most scammers; a lot of the "scams" perpetrated on this site started off as idiocy by the newly rich who don't necessarily have a criminal history.

Why can't the "trusted commission" be a private organization that charges new ventures for a vetting process? It's a false assumption that such services can only exist through the use of violence against our neighbors.

You do not understand libertarianism; your criticisms are based on ludicrous parodies. You should be embarrassed for parroting these talking points -- or stick to what you know: programming; you surely don't know much about the law.

[velacreations]

a background check would have prevented Labcon.  Those guys had scammed before.

I'm not in favor of govt regulation, but I'd like to think there is a way to improve the space here on our own (besides just due diligence, which doesn't stop all the scams, either).

[dpb]

Hey moron, as I just told you:

Plenty of utter crap has been sold by the overly regulated banking industry. Regulations do not prevent or repair damages from scams, either.

You just want to blame anything else but yourself.

Of course there is crap in traditional investments, but not to nearly the same percentage that there is in BTC Securities. I have dealt with plenty of both types of investments to know that most of the crap is in BTC Securities.

Perhaps we need to start getting all those that want to introduce a security to have to put up insurance that will protect investors. If we all were omniscient then we could exercise due diligence. We need some sort of system of trust that can be relied on. Regulations do prevent scams as we would have much more scams if we did not have the threat of sanctions. I am not certain what the perfect system would be, but letting it simply be a free-for-all is not the solution.

The system is not yours to "let." It does not need your permission. You are hiding behind collectivist language: "we need to," as if one individual's conception of a greater good is justification for the use of violence against his neighbor. Take the initiative and do it yourself! It's disgusting that you would substitute hard work for laziness at the expense of others. You are worse than the accused scammers; at least their victims had a choice!


Some estimate that the ratio of scams in Bitcoin is not that far off from the ratio of scams in the traditional financial institutions:
http://trilema.com/2012/the-bitcoin-drama-timeline/

Considering an average monetary mass of 7mn BTC for the interval, the aggregate of theft, fraud and stupidity registers as about 18%. Considering fiat monetary mass is somewhere on the order of magnitude of 5 trillion USD, proportionally the same levels of loss would come to about 900 billion total or roughly 50 billion a month. Shockingly enough, this figure is not quite that far off the mark (provided we discount government actions from the “stupidity” label).

[MonkeyBear68]

Of course there is crap in traditional investments, but not to nearly the same percentage that there is in BTC Securities. I have dealt with plenty of both types of investments to know that most of the crap is in BTC Securities.

Yes because the "investors" here are morons with no experience.
For instance you often see refusal of financial reports because "IBM doesn't do that". Crazy, right?
Because instead of questioning the stuff that doesn't add up, they shill more because they think it's their interest.

And the bankers who sold the crappy investments still run free.

The Banksters definitely need to be held accountable. Perhaps as dpb suggests a privately run or sponsored citizens/investors coalition could be formed that we could all trust to do the basic vetting for us.

dpb I did not mean to suggest that a simple criminal background check was all that was required for due diligence. My example was meant to point out that it would be crazy to expect 1000's of investors for a fund to have to each carry out the same process of vetting the funds. If you think of securities in general there are probably thousands if not millions of funds, and thousands if not hundreds of thousands of investors in each one. Without a central place, either public or private, where vetting can occur it would make it very wasteful for all these people to individually exercise due diligence on each one.

A simple credit rating check is often a better indicator of character than a criminal check, but even then there is no simple answer as a good man can become bad.

[dpb]

Of course there is crap in traditional investments, but not to nearly the same percentage that there is in BTC Securities. I have dealt with plenty of both types of investments to know that most of the crap is in BTC Securities.

Yes because the "investors" here are morons with no experience.
For instance you often see refusal of financial reports because "IBM doesn't do that". Crazy, right?
Because instead of questioning the stuff that doesn't add up, they shill more because they think it's their interest.

And the bankers who sold the crappy investments still run free.

The Banksters definitely need to be held accountable. Perhaps as dpb suggests a privately run or sponsored citizens/investors coalition could be formed that we could all trust to do the basic vetting for us.

dpb I did not mean to suggest that a simple criminal background check was all that was required for due diligence. My example was meant to point out that it would be crazy to expect 1000's of investors for a fund to have to each carry out the same process of vetting the funds. If you think of securities in general there are probably thousands if not millions of funds, and thousands if not hundreds of thousands of investors in each one. Without a central place, either public or private, where vetting can occur it would make it very wasteful for all these people to individually exercise due diligence on each one.

A simple credit rating check is often a better indicator of character than a criminal check, but even then there is no simple answer as a good man can become bad.

Most Bitcoin users are not investors; they are average folks who got lucky and now have access to more wealth than they know how to manage. Handing your money over to a stranger doesn't make you an investor; it makes you an idiot. How do you think individuals make a living out of investing if any nobody could do it from home on his iPad?

[MonkeyBear68]

Of course there is crap in traditional investments, but not to nearly the same percentage that there is in BTC Securities. I have dealt with plenty of both types of investments to know that most of the crap is in BTC Securities.

Yes because the "investors" here are morons with no experience.
For instance you often see refusal of financial reports because "IBM doesn't do that". Crazy, right?
Because instead of questioning the stuff that doesn't add up, they shill more because they think it's their interest.

And the bankers who sold the crappy investments still run free.

The Banksters definitely need to be held accountable. Perhaps as dpb suggests a privately run or sponsored citizens/investors coalition could be formed that we could all trust to do the basic vetting for us.

dpb I did not mean to suggest that a simple criminal background check was all that was required for due diligence. My example was meant to point out that it would be crazy to expect 1000's of investors for a fund to have to each carry out the same process of vetting the funds. If you think of securities in general there are probably thousands if not millions of funds, and thousands if not hundreds of thousands of investors in each one. Without a central place, either public or private, where vetting can occur it would make it very wasteful for all these people to individually exercise due diligence on each one.

A simple credit rating check is often a better indicator of character than a criminal check, but even then there is no simple answer as a good man can become bad.

Most Bitcoin users are not investors; they are average folks who got lucky and now have access to more wealth than they know how to manage. Handing your money over to a stranger doesn't make you an investor; it makes you an idiot. How do you think individuals make a living out of investing if any nobody could do it from home on his iPad?

You are correct. It still however leaves us with the problem of trying to establish trust. I do not think the threat of violence is the solution, or that violence should be the punishment. Unfortunately some people are evil and will try and scam or hurt others. We need some way to keep these people in order. Perhaps with the internet, and the Block Chain itself or a variant, a trust based system could be created. Those that do business with you could assign a rating or leave feedback. Those with low ratings or proven scammers would not get business. Still however people can go bad. How do we deal with punishment in situations such as those? Do they simply get a negative rating so that people will never deal with them again? Do they pay higher insurance rates somewhat for like bad drivers etc.

It is an interesting problem and we definitely a Block Chain based hashing solution could solve the issue of establishing trust levels.

[mgio]

Of course there is crap in traditional investments, but not to nearly the same percentage that there is in BTC Securities. I have dealt with plenty of both types of investments to know that most of the crap is in BTC Securities.

Yes because the "investors" here are morons with no experience.
For instance you often see refusal of financial reports because "IBM doesn't do that". Crazy, right?
Because instead of questioning the stuff that doesn't add up, they shill more because they think it's their interest.

And the bankers who sold the crappy investments still run free.

The Banksters definitely need to be held accountable. Perhaps as dpb suggests a privately run or sponsored citizens/investors coalition could be formed that we could all trust to do the basic vetting for us.

dpb I did not mean to suggest that a simple criminal background check was all that was required for due diligence. My example was meant to point out that it would be crazy to expect 1000's of investors for a fund to have to each carry out the same process of vetting the funds. If you think of securities in general there are probably thousands if not millions of funds, and thousands if not hundreds of thousands of investors in each one. Without a central place, either public or private, where vetting can occur it would make it very wasteful for all these people to individually exercise due diligence on each one.

A simple credit rating check is often a better indicator of character than a criminal check, but even then there is no simple answer as a good man can become bad.

Most Bitcoin users are not investors; they are average folks who got lucky and now have access to more wealth than they know how to manage. Handing your money over to a stranger doesn't make you an investor; it makes you an idiot. How do you think individuals make a living out of investing if any nobody could do it from home on his iPad?

Most people would tell you only an idiot would but some nonexistent currency from some website in Japan that used to sell collectable nerd cards.

At least that's what people told me when I bought my first bitcoin a year and a half ago.

These days they are asking me why they I didn't tell them to buy any when I first bought in.

So I think you had to have been kind of an idiot to take a risk on Bitcoin to begin with.

[DrGregMulhauser]

Well, common sense has to play a role as well...

Even TradeFortress' lending site didn't pass the sniff test.  I also suspected ukyo & graet were trying to get rich playing the spread between their loans and the ones TradeFortress was brokering and thus kept a close eye on them selling off my stake as soon as they became unresponsive.  

Touché. At a certain point, it became blazingly clear that TradeFortress's operation did not have the capital to cover potential withdrawals; I alluded to this publicly when TF first floated the idea to start clearing out his "investment" fund via Inputs.io, only to be brushed off, naturally.

As for Ukyo.Loan, I had originally been an aggressive buyer on behalf of the BTC Growth fund, eventually holding nearly 12% of the entire thing; but once it became very clear that the operation was headed south, I took the fund out of that position swiftly and entirely.

I don't see how Neo was an 'obvious scam'. If i was going to cut and run I wouldn't waste a load of money on office space, employees and newspaper and TV advertising after the IPO was closed. A flawed business plan possibly but a scam from the start, I don't see it.

Perhaps scam is a bad description.  It was obvious that the operation was a money furnace and of course you would waste money on advertising after the IPO...

Neo was not worth touching with a barge pole: regardless of whether it was actually intended as an outright scam, it was a transparently atrocious business plan. IMHO, no experienced investor would have gone near it in the fiat world, yet in Bitcoin land many folks seem willing to overlook all manner of flashing red lights that would otherwise be deal-killers.