[GLBSE] Introducing: Bitcoin Syndicate, a new mining op trading publicly!

[gewure]

more infos please!

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[Glasswalker]

Money exchanged out to USD at the peak of the exchange rate last week. We have about $12K USD (a little over). I'm still negotiating how to get this to Enterpoint to pay for the new order. I'm trying to work out a deal with MTGox to send a wire directly to Enterpoint in GBP but that's not finalized yet. The challenge is we can't simply withdraw the cash and wire it directly, because in Canada I would be taxed on that money as if it were "income". So I'm taking a bit of time to sort out the proper payment. (I'd rather loose a few more days or a week of mining than loose $3000 in taxes). I will post more info once I know what's going on. I've set a goal for myself of the end of this month to have SOMETHING figured out, so that money isn't sitting idle too long.

[brendio]

Money exchanged out to USD at the peak of the exchange rate last week. We have about $12K USD (a little over). I'm still negotiating how to get this to Enterpoint to pay for the new order. I'm trying to work out a deal with MTGox to send a wire directly to Enterpoint in GBP but that's not finalized yet. The challenge is we can't simply withdraw the cash and wire it directly, because in Canada I would be taxed on that money as if it were "income". So I'm taking a bit of time to sort out the proper payment. (I'd rather loose a few more days or a week of mining than loose $3000 in taxes). I will post more info once I know what's going on. I've set a goal for myself of the end of this month to have SOMETHING figured out, so that money isn't sitting idle too long.

I think you'll run into AML issues trying to wire to someone else's account. Search for the thread on what happened to Goat, and that was even for a related person's account. You best bet is if you can send a Gox code, or find someone to do it otc in exchange for the Gox code or bitcoins.

[Glasswalker]

I'm well aware of AML regulations, I won't be wiring directly to another account. I'm discussing directly with mtgox staff, as well as with Enterpoint to try and work out a suitable arrangement. Obviously a simple mtgox code would be ideal, problem is Enterpoint doesn't currently accept this, and while they are eager to accept something "bitcoin friendly" they are a large business and have many things to consider (and are busy fulfilling orders right now, so not much time to be researching financial options). I'm working on sorting it out in the best way possible. I hope to have some kind of firm answer to post on this one soon. As I said absolute worst case I wire myself the money, then relay it to Enterpoint (less income tax). Not ideal, but a suitable fallback since we did turn a tidy profit on the exchange luckily.

Thanks!

[gewure]

12k money sounds good

...thought im not any more sure if the enterpoint-fpgas are the best choice when it comes to ASIC mining. Maybe the syndicate could aquire some shares of a trustworthy, good managed company, investing into ASICS soon? im thinking of BTC-mining or Ognast, e.g.

think about this.
it would diversify bitcoin syndicats assets and lower risk while boosting profitability in the future.

greets

[gewure]

week after week there happens nothing, and this is reflected in the market capitalization of the bitcoin-syndicate.

will you act? i see no growth or anything happening, also you don't communicate with the shareholders.

i will sell my stocks if you don't do better.

[kronosvl]

does anybody else has a problem trying to put an order on BTCSYN?
it says BTCSYN not found

[Bitbird]

does anybody else has a problem trying to put an order on BTCSYN?
it says BTCSYN not found

The same.

[Glasswalker]

Hey guys, to answer your questions, there has been a major announcement put up in the announcements forum on btcsyn.com

Please see it here: http://forum.btcsyn.com/viewtopic.php?f=6&t=84

Thanks.

[RandomQ]

password It was re-used on 3-4 sites only, and most of those are full financial institutions.

You can't reuse passwords on any sites anymore, 1 password for each site. There was news about 60-70 banks that got hacked a week or two ago, possible password stolen from your bank.

People need to start using google auth or yubikey.

[jackmaninov]

does anybody else has a problem trying to put an order on BTCSYN?
it says BTCSYN not found

The same.

GLBSE needs a better system for notifying people a symbol is locked...

[mila]

GLBSE needs a better system for notifying people a symbol is locked...

hm, different error message would make more sense. sure

[gewure]

5.1 - Loan of Mining Hardware By Founders

The founding members will initially contribute their own personal mining hardware to the syndicate. They will be rewarded for this contribution in the form of shares as is outlined in section 4.1

This contribution of hardware will be a loan. The hardware will be returned to the original owner when one of the following conditions is met (whichever comes first)

    * Midnight on March 31st 2013 is reached (one year from the end of the initial ipo period)
    * The average mining power of hardware fully owned by the Syndicate (measured and averaged over a 30 day period) exceeds 50 GHash/s
    * The Syndicate is dissolved via the terms of section 3.5
    * A motion is passed under the normal terms of section 3.3 which ends the loan period prematurely, granting the hardware back to the original owner

Once the loan has completed, the founding member who owns the hardware may choose to continue to contribute it's mining power to the Syndicate as they see fit, but they can also stop contributing whenever they choose after this point

LOL

So.. basically BTC-SYN will be worth 700 canadian dollars in some months. 700/12000 makes 0.053 Dollar per share! woohoo!

when the fuck did you put up this new contract?!! i didnt vote on it and i doubt anybody would!

..explain this to me. 

bitcoin syndicate lost 3000 bitcoin in under a year?! 100% of its value?

...

[gewure]

we would probably be better off with you beeing a player and loosing half the money to a casino..  

i put 50 btc into this, cause you were sooooo promising. should have sold them 1 month ago, when i stressed that nothing is happening.

..reminds me of southpark.

"AAAAAND ITS GONE."

[Glasswalker]

Gewure: What are you talking about? Your whole post was way off base... See inline responses below:

So.. basically BTC-SYN will be worth 700 canadian dollars in some months. 700/12000 makes 0.053 Dollar per share! woohoo!

That's completely incorrect. IF we were to liquidate today, we would be worth 700CAD plus the bitcoins still in our wallet right now. But I don't intend to liquidate. I intend to keep operating, and I am trying to piece together several plans of action which the shareholders can then vote on (one of which may be liquidation, but it will be up to a vote, and honestly I would prefer if we can keep it afloat to recover some of the loss).

Lastly, I'm still trying to recover the funds.

Plus if we continue to operate, in a couple months we could have mined a fair bit still even at 5-6 GHash. The 700CAD we have is enough for one cairsmore, which should soon be at 1GHash, so that's a bit more mining power, and so on. And all that is if none of the other plans pan out (help from mtgox, and help from enterpoint, or recovering the stolen funds).

when the fuck did you put up this new contract?!! i didnt vote on it and i doubt anybody would!
..explain this to me. 

Umm what the hell? The shareholder loan clause was in the bylaws originally BEFORE the IPO. It was altered only once, which was to EXTEND the terms of the loan (to make our commitment longer). That was the only alteration, and it was done under a passed motion. Specifically Motion ID #81 for which more details can be found here http://forum.btcsyn.com/viewtopic.php?f=8&t=22

So if you didn't like those terms, you likely should have read further into the bylaws before investing. Most of our other investors had no problems with those terms.

Also, I'm not sure what that has to do with anything related to the theft of the $12K, or why you're bringing it up now.

bitcoin syndicate lost 3000 bitcoin in under a year?! 100% of its value?

I'm not sure where you are getting any of these numbers from. We lost $12K (about 1800BTC roughly, don't have the tx in front of me). not 3000BTC. We never had 3000BTC to loose in the first place. Our stock price fluctuated, and our total stock in circulation might have been at 3000BTC at one time, but that's purely market speculation on our total value. Our actual assets were approximately 1700BTC originally which at the time was worth about $9000, since then we sold the icarus to buy cairsmore, the money from that plus some of our mining profits, totalled up to about 1800btc. Which we sold for $12K USD to use to buy cairsmore boards. Which all said and done would have doubled our mining capacity in mhash/s. But the  $12K was stolen... That's the short version of the syndicate history. I'm not sure where you see loosing 3000BTC anywhere in that.

Overall: There is already enough panic going on around here, not to mention the witch-hunt that has started in the other thread about this theft (apparently I underestimated this communities thirst for blood, that thread has mostly been pure speculation, and aggression toward me personally, without caring about any of the facts, so I refuse to return there, I will however continue to respond here).

Anyway, point being please double-check your facts before throwing additional accusations or statements out there and contributing to the chaos.

Thanks.

[Bitcoin Oz]

You used the same password on 3 different financial sites .....

Where is the police report and can you prove you have actually submitted it ?

[Glasswalker]

The police report was submitted with the Ottawa Police. I have a reciept from them for it's submission on paper. And I have the name/badge number of the officer that took it, along with an open case number with them.

I will not be posting all this info on the public forum just yet until I hear back from the investigating officer, because I don't want to complicate their case by them suddenly getting inundated with calls about it from speculators and such on this forum.

I can however confirm I have sent scanned copies of this reciept to MagicalTux at MtGox, as well as I have sent the details (and will send the scanned copy upon request) to Nefario at GLBSE.

Yes I can prove I've submitted it. And if you want validation, you can ask one of those 2 individuals. Please keep in mind this is a sensitive situation, and until I know what I can and can't do, I'm being careful with things so that I don't potentially negatively impact the investigation.

As for the password repeats... I maintain, while it's "best practice" to use 100% strong passwords, never repeating, and 2 factor everywhere, VERY FEW people even in the security industry actually do this. I can't quote an exact number, but I do know the percentage is extremely small. Hell, we have national banks here in Canada which don't even ALLOW passwords longer than 6 digit numerical passwords... And none of them that I know of support 2 factor auth for anything less than major corporate accounts doing frequent international wire transfers over $10,000. (and at a significant cost). None of the creditcard companies (or banks who offer creditcards) support 2 factor auth for those at all (to my knowledge)

Have I learned from this, and ramped up my security? yes. I now do use 100% strong passwords, with no repeats, and 2 factor where possible. (and I am still rolling passwords for things, it will likely take me weeks to roll them all). All the ones using this compromised password were rolled already, but I have hundreds of passwords that need to be migrated to the new "proper" setup. (and no that number is not an exaggeration, also it's taking a long time because I already did my best to avoid overlap as much as possible in that large volume of passwords).

And yes I did use a secure password facility for most of the "really important" stuff. But this was my personal mtgox account, which usually doesn't handle more than a couple hundred btc at most once every few months for less than 24h at a time. It wasn't worth the effort/cost in my opinion. But under this freak situation I ended up stuck moving large amounts of syndicate money through that account, and it got stuck there for a long period of time due to circumstances beyond my control.

Lastly, this breach impacted me more heavily than any of the shareholders can even understand. Not only did I have more invested in this than anyone else (to my knowledge, if I'm mistaken, then I apologise). But I also have access to many highly sensitive systems, and classified information. (most of which is not protected to the level everyone here suggests I should have protected my personal mtgox account with by the way). And even the remote chance that my accounts were compromised means that my employer now needs to do a full security audit as well. And lastly there is the reputation hit this causes, combined with the added stress of dealing with the lynch mob that has formed here on these forums. (and attacks on my practices which I'm pretty sure at least 50% of the attackers don't "practice what they preach" but since it isn't their accounts under a microscope they can feel comfortable slinging their hypocrisy at me)

Anyway, sorry if I'm getting a bit touchy on this topic, but it feels kinda shitty when you try and really do something positive, and are trying your best, and it not only blows up in your face, but suddenly people are accusing you of being a criminal because of it... And I'm stressed out dealing with this, and dealing with trying to maintain my day job at the same time (which is very demanding as well right now).

[server]

Major Announcement. PLEASE READ

Postby Glasswalker » Sat Jul 07, 2012 12:10 pm
Ok, I know I've been silent last little bit and I want to apologize for this.

There is some very big, and very unfortunate news I need to post, and I have had to wait a few days to gather more complete information first.

Here is the series of events that led up to this point:

- We sold our FPGAs as planned, made good money for them
- Due to exchange rate jump, we had potential for a large profit
- A motion was passed for me to move the money out and make the purchase as required
- Enterpoint had said that they would be able to work with us for a bitcoin "friendly" payment, but they needed to do some research first
- I moved the funds to MTGox so I could exchange out to USD to take advantage of the exchange rate increase
- I sold off to USD, giving us exactly $12,189 USD sitting in our mtgox balance.
- Enterpoint got busy, and was unable to do the research required to allow us to pay them in either bitcoin, or ideally via mtgox code
- I attempted to do some of the research for them
- I discussed with MagicalTux at mtgox, and he said to email both Enterpoint, and his direct email, and that he would respond to any questions ASAP.
- Enterpoint emailed questions to MagicalTux at MTGox on the 16/17 of June with his questions.
- Due to some delays on MTGox end, they did not reply at all (silence) for over 2 weeks.
- Because of all these delays, the process has been "halted" since then, with the money sitting idle in mtgox.
- Due to the exchange rate, and fees, I didn't want to pull the money back out while we waited as we would have taken a loss.
- This is why there has been no update, I have been waiting for it to move forward.

Now... that gets us up to date... Now the bad news:

- On July 4th, I woke up sick. Not feeling well. So at 9am I contacted my employer told them I wasn't coming in. I went back to bed
- I slept until noon, and when I woke up I was still not feeling well, so I went and checked my email.
- In my email I discovered that On July 4th 2012, at 14:34:19 GMT (10:34am EDT my local time) there was a withdraw from my mtgox account.
- I checked and an IP address 130.83.54.115 Initiated a withdraw from my account at this time.
- Someone had gained access to my account illegally, they sold off the USD for bitcoin, and withdrew the bitcoin while I slept.
- The bitcoin transaction can be seen at: http://blockchain.info/tx-index/1125467 ... 07dc2f12f7
- I did some quick research, and gathered the info, and within about 30min, I contacted mtgox to notify them of fraud, both via IRC and their support email.
- I then left my house to go immediately to the local police and file a police report.
- I've been given an open case number from the Ottawa Police. Someone from either Fraud or Cyber Crime will contact me to investigate.
- MTGox confirmed the attacker started the attack on the 1st of July, and the same attacker used 6 login attempts across 4 days. The 6th succeeded.
- This implies that they had my password somehow.
- My password was a strong 11 digit password, containing a nice mix of all character types.
- It was re-used on 3-4 sites only, and most of those are full financial institutions.
- I was NOT the victim of any type of phishing.
- The only computer I ever access those accounts from were locked down well, and behind strongly secured networks.
- At this point I assume there must have been another compromise somewhere else, that led the attacker to the knowledge of some passwords
- I have confirmed the wallet, and btcsyn secure servers are not compromised.
- I have since rolled all my passwords to extremely secure passwords, and enabled 2 factor auth everywhere that supports it.
- I now no-longer repeat ANY passwords ANYWHERE.
- Could I have done this earlier? sure, but it is an EXTREME measure that even the most paranoid rarely take.
- MTGox is fedexing me an evidence packet, containing all logs/data from a security audit of the account. That should be here soon
- I've traced the IP to a technical university in Germany. I have contacted them to notify them of the incident.
- At the very least (and most likely) it's just a zombie compromised machine on their network, but perhaps they can help gather evidence.
- I have also investigated any possible sources for the password compromise. I have yet to find one.
- The Bitcoins remain unspent as of this writing. (which is abnormal for a large bitcoin theft).
- I've contacted all major e-wallet services to see if they control the receiving address. If so we could use law enforcement to recover the funds.
- So far some have responded that they do not control the address (but they were happy to check for us). I am still waiting on a couple to respond.
- MTGox is also investigating further, and offers full support to us and law enforcement in the investigation.
- MTGox has also mentioned they "Might" be able to help us out by providing some funds
- This "help" wouldn't be a "reimbursement" as that would be admitting guilt on their end, instead it would take the form of some type of loan terms.
- I have yet to determine the final details of what this would look like, once I know I'll let you know (I'm still discussing with MagicalTux)
- Enterpoint wants to help too. Right now they have too strong order demand, so they must fulfill those orders with our reserved boards.
- BUT they say within 2-3 weeks, they have a solution they may be able to provide us boards in a way to help us out (without needing up-front payment)
- Again, unknown what the exact terms of this look like, but I'm still discussing. Once I know, I'll let you know.
- As of right now, I am sitting on approximately $700 CAD that was to be used for infrastructure (Rack gear, PSU, cabling, and so on) for the boards.
- That money is going to stay still for now, until we decide on a course of action. If needed it will be converted back into BTC.
- We do have some liquid assets, and the founder rigs continue to mine. We are not "bankrupt" though this is a MAJOR setback.
- Immediately after this happened one shareholder (I will not name) was in the mtgox support channel when it happened
- They did not get the full details, but they did get enough to guess, they contacted me via PM to confirm, and I would not lie to them.
- This shareholder agreed not to disclose the incident at all.
- In addition the founders (being as they work with me every day) found out the day after the incident.
- So in total 7 people knew after the incident. No more.
- Shortly after this, our stock price crashed. This means someone knew that it happened. I've checked with all the founders but one who is unreachable
- So that leaves the missing founder, or the shareholder who saw, or the thief as possibilities.
- ie: I am hoping to find out who initiaited the sell off as it could be a potential lead. IF you have info to this regard, let me know.
- To protect the asset, I have spoken with Nefario from GLBSE. He has offered his support in this situation as well.
- At my request, he has frozen all trading on BTCSYN stock, until we have determined, and voted on a course of action at which time trading will resume.
- At this point I have gone as far as I can on my own. And I have all the "solid" info I can get, so it was time to release it to bring everyone up to speed.
- I'm sure you can understand this was a delicate situation and had to be handled with great care. (hence the delay)
- Right now I am in a holding pattern. I am waiting on more info from mtgox, enterpoint, and a contact from local law enforcement
- Also possibly more info from e-wallets, and/or the university in Germany.
- Law enforcement may take WEEKS to get to me, as their caseload is high. There is nothing I can do about that.
- So when I get more info, I'll share it.
- I'll do my best to communicate on here, but I will not be here for constant badgering, or status checks, or whatever.
- Understand this is putting huge stress on me as well, and so I am doing my best.
- I still have hopes we will be able to recover the funds. But if not, hopefully one of the options (or both) with Enterpoint/MTGox will help us continue in some fashion.
- Please don't let this thread degrade into a flame war. If it does I'll moderate accordingly.
- Slinging accusations or baseless claims around at this point will do nothing but hurt matters, stress everyone out, and possibly slow things down.
- Constructive suggestions, assistance, and feedback are welcomed, and I will do my best to accomodate (accept, work with, and respond to posts).

In closing, I stand by my decisions that led to this point. And while the outcome was catastrophic, based on the information and options available at the time, I feel that I made the right decisions at the time.

I agree, in hindsight, many things can look obvious, or like they should have been done differently, but you can't re-evaluate decisions made with hindsight, it doesn't work that way.

This is a horrible day in the history of BTCSYN, and it will go down as a catastrophe. But at this point it is not the end, and I am doing everything I can to:
- Recover the funds if possible (we can have hope)
- Come up with possible courses of action that give BTCSYN a viable future as a business, allowing your investments to remain valuable

Thanks for your support, and understanding through this.

- Paul Mumby

Glasswalker

I would like to leave this here, as a backup.
It's a copy of your post at btcsyn forum.

[Glasswalker]

Fair enough, thanks. The main reason I only posted in one spot was to try and contain constructive chat to a single spot so I wasn't constantly posting in several spots, but as it seems that's unavoidable... Thanks!

[HorseRider]

Fair enough, thanks. The main reason I only posted in one spot was to try and contain constructive chat to a single spot so I wasn't constantly posting in several spots, but as it seems that's unavoidable... Thanks!

Just tell everyone what's your plan for compensating the external shareholders. If you have already announced such plan yet,  ignore this post.

FYI, I have no shares anymore since long time ago. It's sharp declining price on GLBSE that draws my intention here. As Glasswalker once claimed ,they don't forced anyone into buying their shares. Those words were said during some not very pleasant topic which ask them to compensate the company when their promised hash rate cannot meet. Glasswalker said, those hash rate is not hard promised, the contract said they will only try their best to do so. So after they say those words, I started to sell shares, a large bunch of shares, until I have none of them.

However, I want to say, talkative Glasswalker, you don't have to explain us the details. I don't think the shareholders really care.

Just tell everyone what's your plan for compensating the external shareholders, if you cannot find the money back with the help of police. those shares  You executive team get by providing several months of hashrate but no firm hardware is really cheap in the accounting standard, which imply you should do good job to the company and create value, not let the money stolen.

Even if you can get a proof from the police that the money is not stolen by yourself or other executive team, this "if" cannot make an excuse for you not to take responsibility after this disaster.

Seek a loan from your relatives and friends or local bank or credit card, or simply withdraw some money from your bank account. Anyway, just make sure that the "company" don't have to pay the theft money.

Give back the company dollars.