Legal complaint against bitcoinica.com

[paraipan]

^matthew's post, and the fact that bitcoinica gets external funds from mtgox codes to hedge or pay interest.

Glad you stepped by Matthew and do some constructive posting, i will patiently wait for an official response from bitcoinica wherever they please most. Until then I will be in my "cave" trying not to disturb more these forums and hope the police will keep me updated.

@teflone i've been called things all my life, i got used to it

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[Matthew N. Wright]

Parapain opened up a channel to the police in regards to a bitcoin business. If anything, he has an opportunity to learn directly from working officials on bitcoin laws in Spain. When everyone's done being angry and realizes that there is nothing the Spanish inquisition can do about a business in Singapore, why not ask Parapain to relay some questions to the police (since they're already looking into it)?

Use opportunities people. The door's already open, let's just walk through it.

[paraipan]

Parapain opened up a channel to the police in regards to a bitcoin business. If anything, he has an opportunity to learn directly from working officials on bitcoin laws in Spain. When everyone's done being angry and realizes that there is nothing the Spanish inquisition can do about a business in Singapore, why not ask Parapain to relay some questions to the police (since they're already looking into it)?

Use opportunities people. The door's already open, let's just walk through it.

you made great post and now you ruin it, bitcoinica operates with mtgox codes and their codes too without requiring any identification. I have access to it so the service can be used from Spain, thus under Spanish jurisdiction too. Dollars are used to make the deposits and pay interest.

[Matthew N. Wright]

Parapain opened up a channel to the police in regards to a bitcoin business. If anything, he has an opportunity to learn directly from working officials on bitcoin laws in Spain. When everyone's done being angry and realizes that there is nothing the Spanish inquisition can do about a business in Singapore, why not ask Parapain to relay some questions to the police (since they're already looking into it)?

Use opportunities people. The door's already open, let's just walk through it.

you made great post and now you ruin it, bitcoinica operates with mtgox codes and their codes too without requiring any identification. I have access to it so the service can be used from Spain, thus under Spanish jurisdiction too. Dollars are used to make the deposits and pay interest.

Sounds like you have another police report to file then-- for MtGox! ^_^

[paraipan]

Parapain opened up a channel to the police in regards to a bitcoin business. If anything, he has an opportunity to learn directly from working officials on bitcoin laws in Spain. When everyone's done being angry and realizes that there is nothing the Spanish inquisition can do about a business in Singapore, why not ask Parapain to relay some questions to the police (since they're already looking into it)?

Use opportunities people. The door's already open, let's just walk through it.

you made great post and now you ruin it, bitcoinica operates with mtgox codes and their codes too without requiring any identification. I have access to it so the service can be used from Spain, thus under Spanish jurisdiction too. Dollars are used to make the deposits and pay interest.

Sounds like you have another police report to file then-- for MtGox! ^_^

actually i don't, their info is publicly available and they comply with AML regulations, had my doubts using them at first

[Electricbees]

-1 to this thread.
Makes me queasy. Makes me uneasy.
Reminds me of when I was a little boy, and a barefoot girl stole one of my shoes in gym.
She told the teacher I stole her other shoe, and got me banned from recess for a few days.

This looks like a case of envy and tattling. Disheartening.

[Littleshop]

you made great post and now you ruin it, bitcoinica operates with mtgox codes and their codes too without requiring any identification. I have access to it so the service can be used from Spain, thus under Spanish jurisdiction too. Dollars are used to make the deposits and pay interest.

So every internet web site can be accessed from every country in the world.  So every site on the internet is under every jurisdiction in the world?  

[lodcrappo]

you made great post and now you ruin it, bitcoinica operates with mtgox codes and their codes too without requiring any identification. I have access to it so the service can be used from Spain, thus under Spanish jurisdiction too. Dollars are used to make the deposits and pay interest.

So every internet web site can be accessed from every country in the world.  So every site on the internet is under every jurisdiction in the world?  

yep!  and its every persons responsibility to file police reports about every website that could, in your opinion, be in violation of any law in any country you live in or have visited in the last 180 days.  having absolutely no evidence should not cause you to hesitate for even a second, it is your duty!

[Matthew N. Wright]

you made great post and now you ruin it, bitcoinica operates with mtgox codes and their codes too without requiring any identification. I have access to it so the service can be used from Spain, thus under Spanish jurisdiction too. Dollars are used to make the deposits and pay interest.

So every internet web site can be accessed from every country in the world.  So every site on the internet is under every jurisdiction in the world?  

yep!  and its every persons responsibility to file police reports about every website that could, in your opinion, be in violation of any law in any country you live in or have visited in the last 180 days.  having absolutely no evidence should not cause you to hesitate for even a second, it is your duty!

 

Seriously though, filing a complaint/inquiry with the police is not the same thing as filing a police report of some criminal action. It's like knocking on the window of a police car and asking if "that man over there walking around in his house without any clothes on is breaking the law or not".

[Rassah]

I think it's the whole idea of:

"Hey, we're developing technology that will free people to use their money how they see fit, send and receive it to and from anyone they like, and use it without any meddling by banks and governments!"

"Realy? Let me report that to the authorities, just in case!"

that's somewhat disgusting  

Also, can someone explain to me why money laundering is a bad thing? Bitcoin launders money every time you send money to someone and receive change to a different random address. What's wrong with having anonymous money?

[paraipan]

I think it's the whole idea of:

"Hey, we're developing technology that will free people to use their money how they see fit, send and receive it to and from anyone they like, and use it without any meddling by banks and governments!"

"Realy? Let me report that to the authorities, just in case!"

that's somewhat disgusting  

Also, can someone explain to me why money laundering is a bad thing? Bitcoin launders money every time you send money to someone and receive change to a different random address. What's wrong with having anonymous money?

please read at least the first posts Rassah, you will understand. The laundering involves us dollars and i don't know why it's a bad thing in general, guess it has something to do with war on drugs.

[Spekulatius]

Despite digging his business its own grave, I think OP did actually something GOOD to the BTC economy:

IMO the complaint is just an obvious sample of what may be going on behind the scenes anyway. If we honestly thought nobody would ever question the legitimacy or status of BTC businesses, if just kept quiet about it, we would have changed that way of thinking at least after the recent pressure on tradehill & paxum became public. Its overdue.

So what are we complaining about?

In fact this little wake up call (and I certainly hope Zhou takes it seriously) may prove to be beneficial to BTC and Bitcoinica after all. If BTC related businesses havent thought too much about legal implications of their doing, then now they will start. Preparing and building resilience against legal difficulties can never be wrong. After all its only one individual lodging this rant. On top of all, its Spain (no offence Spanians )being a small market possible action may not affect others immediately. Being also part of the EU, any rulings may take a long time and can be expected to be publicly discussed, making it possible to take part in the decision making process.

To sum up, nothing unexpected should have happened and it only paves another step on the road to mainstream adoption.

[Electricbees]

Perspectives fully reversed in this thread.

[zhoutong]

Dear Bitcointalk members,

Thank you for your active participation in this thread. We're now working on the official response regarding this matter and hopefully we can clear things up.

Meanwhile, we want to make clear a few things:

- Bitcoinica is no longer a product of xWaylab Inc., and we no longer operate in the jurisdiction of Delaware. We have registered a new entity outside of United States and we are now a fully licensed financial services provider in that country. (We will announce our new corporate structure with proof of financial services license available from a government site.)

- Bitcoinica is a Bitcoin CFD (Contract For Difference) trading platform, not a bucket shop. Even though our trading facilities don't deliver actual Bitcoins, there is actual trading of Bitcoins among Bitcoinica customers or at other exchanges. The benefit of trading CFDs instead of Bitcoins is the possibility of margin trading of commodity-like assets, instead of contract-like assets. The underlying trading process is absolutely legal.

- We have a legal deadline for doing KYC procedures, and currently we are still far from that. However, we are considering requiring identification documents from our customers. We will launch a poll to hear your voices.

It's surprising that the OP didn't give us more than 3 days to announce the changes at the corporate side of Bitcoinica, and this thread has forced us to put aside our technical development and focus on the legal problems right away. We will address these issues soon.

[Oldminer]

What jurisdiction does Spain have anyway? Prolly the best they can do is make it illegal for their citizens to use Bitcoinica. 

[jkminkov]

you are soo greedy that you lost your minds...

[matonis]

Dear Bitcointalk members,

Thank you for your active participation in this thread. We're now working on the official response regarding this matter and hopefully we can clear things up.

Meanwhile, we want to make clear a few things:

- Bitcoinica is no longer a product of xWaylab Inc., and we no longer operate in the jurisdiction of Delaware. We have registered a new entity outside of United States and we are now a fully licensed financial services provider in that country. (We will announce our new corporate structure with proof of financial services license available from a government site.)

- Bitcoinica is a Bitcoin CFD (Contract For Difference) trading platform, not a bucket shop. Even though our trading facilities don't deliver actual Bitcoins, there is actual trading of Bitcoins among Bitcoinica customers or at other exchanges. The benefit of trading CFDs instead of Bitcoins is the possibility of margin trading of commodity-like assets, instead of contract-like assets. The underlying trading process is absolutely legal.

- We have a legal deadline for doing KYC procedures, and currently we are still far from that. However, we are considering requiring identification documents from our customers. We will launch a poll to hear your voices.

It's surprising that the OP didn't give us more than 3 days to announce the changes at the corporate side of Bitcoinica, and this thread has forced us to put aside our technical development and focus on the legal problems right away. We will address these issues soon.

Thank you, Zhou, for your clear post and update. What many people on this thread do not realize is that CFDs operate legally in most parts of the world except for........surprise, surprise........the USA.

"CFDs are currently available in the United Kingdom, Hong Kong, The Netherlands, Poland, Portugal, Germany, Switzerland, Italy, Singapore, South Africa, Australia, Canada, New Zealand, Sweden, Norway, France, Ireland, Japan and Spain. They are not permitted in the United States, due to restrictions by the U.S. Securities and Exchange Commission on over-the-counter (OTC) financial instruments."
 --from: http://en.wikipedia.org/wiki/Contract_for_difference

[bb113]

As others have said this isn't a big deal and was bound to happen anyway. I am not sure why parapain is involved in bitcoins if he is the type of person who is so interested in contacting police about a possible bucket shop though. It is strange behavior to say the least. Since I don't understand it, I suspect ulterior motives. In my experience, when someones behavior doesn't make sense, the majority of the time there is some hidden motive.

So, ok whatever. People should be demanding transparency before using a service anyway. The thing is that IMO if they don't and get scammed it is their problem. There where earlier threads in which people questioned bitcoinica publicly and got enough attention from users to get a detailed explanation from zhou. This would have been the correct way to achieve his goal, and has been demonstrated effective in the past (once again IMO). I am on this forum often and never came across one of parapain's posts regarding this. Trying to involve some guys with guns who probably know nothing about bitcoin is wasteful of government resources, likely to be ineffective, and, most importantly, overtly aggressive.

In case parapain has honest intentions here, with this post I just hope to explain why his actions have raised suspicion about his motives and character.

[beckspace]

I think bitcoinica should respond to this post offically .

I don't think Zhou should use an internet forum to deal with legal complaints. It's not the right area.

[Matthew N. Wright]

I think bitcoinica should respond to this post offically .

I don't think Zhou should use an internet forum to deal with legal complaints. It's not the right area.

Agreed. He's way too nice to people here, but he does things for the community of it.