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Author Topic: Warning: Bitcoin4Cash trades cancelled! Won't do business with Madhatter again.  (Read 16543 times)
Bobby
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May 14, 2011, 11:20:32 AM
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So I booked a transaction three and a half weeks ago for 288 BTC at $350.  I send a 10% deposit to lock in the rate at around $1.2 Canadian.  I mail the money the next day and then wait and wait and wait for over three weeks.  Then yesterday I find out that my deposit has been refunded and the Mr. Madhatter is "unable" (more likely unwilling) to honor the locked-in order because he decided that the prices were "too volatile" currently for him to honor his own word.

Now I have no idea if/when I will ever get my $350 refunded to me.  Furthermore, I made this order on behalf of a friend of mine whom I was trying to convince of the merits of Bitcoin.  He gave me the $350 to buy for him and I confirmed to my friend that the order was locked in for 288 BTC and that I would take care of securing his newly bought coin on his behalf.  Now, where am I supposed to obtain these 288 BTC for my friend?  I'll have to pay $2500 out of pocket to do good on my own word because Madhatter was too greedy to honor his!  

Nowhere did Madhatter indicate that a locked-in order could be canceled.  According to his own website, the BTC were supposed to be already available in his possession and "Reserved" to the person who booked the order.  The whole point of leaving a 10% deposit was to guarantee that the order could not be canceled.  If I had known there was a possibility that my order might be canceled then I would never have booked it with him in the first place.  I would have found a much more expedient channel to obtain the BTC.  I was relying in good faith on the terms he specified on his website and on his high esteem within the Bitcoin community.

What he chose to do is outright theft as far as I see it.  If the price had dropped considerably in the last three weeks then he would not have refunded my deposit as is clearly stated on his website.  I bought the coins on the terms that he specified.  It's not my fault if he was (in retrospect) overly generous in the terms that he offered on his website.  This gives him no right to defraud his customers because of his own lack of foresight.

If he wants to save his face and/or ever do business with me or the other people whom he has defrauded, then I suggest he make good on his orders.  Someone who has shown his willingness to unilaterally changes the terms of a contract that he agreed to and even himself came up with the terms thereof can never again be trusted for any kind of business dealings anytime in the future.  I'm not sure is Mr. Madhatter is aware of the magnitude of the mistake he has committed but I hope he will be smart enough to correct it in an expedient manner if he wants to maintain his excellent standing within the community.

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We now offer two types of trade. If you want us to hold the live rate for you, until your letter arrives at our location, please select the "fixed rate" option. This option requires a small up front deposit of 10% (payable in Bitcoins) to reserve Bitcoins from our pool. Once your letter arrives we will return your deposit and honor the locked-in rate. If you decide to cancel your order, we will return your deposit less any rate fluctuations. This is similar to how numerous online gold/silver bullion dealers deal with rate fluctuations

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Due to the Bitcoin prices being so volatile I am unable to honor locked in trades at this time. I will still accept open rate trades.
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riX
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May 14, 2011, 11:45:40 AM
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Sorry to hear that.

Did you use pgp for your communications? The Madhatter has a very good reputation so I feel that something like this need some kind of proof, unless of course he's willing to give an explanation here.

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May 14, 2011, 11:56:18 AM
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<snip>unwarranted speculation removed.  original post still visible in quote here</snip>

The Madhatter has similarly dishonoured two locked in trades of mine, with mailed payments unaccounted for (net loss to me in excess of 2000 USD all told).  At this time I would advise people not to send money to the Bitcoin4Cash service, at the very least until the situation can be thoroughly clarified.

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
Visit the BitCoin Q&A Site to ask questions or share knowledge.
0.009 BTC too confusing?  Use mBTC instead!  Details at www.em-bit.org or visit the project thread to help make Bitcoin prices more human-friendly.
ribuck
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May 14, 2011, 11:57:57 AM
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I suggest you courteously invite the Madhatter to respond here. He doesn't systematically monitor the forum. As presented here, it doesn't look good. Surely he would have hedged his locked-in deals?
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May 14, 2011, 12:03:23 PM
 #5

I have sent him an email letting him know about this thread and inviting him to respond here.  Regarding his risk model, I am also confused.  I repeatedly asked him to tell me anything about the types of risk his selling practices expose him to so that I could help him to mitigate them, but he declined to even discuss the topic.  My entire email exchange with him is, of course, pgp signed by his key.  But I won't post further here until he's had a chance to reply.

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
Visit the BitCoin Q&A Site to ask questions or share knowledge.
0.009 BTC too confusing?  Use mBTC instead!  Details at www.em-bit.org or visit the project thread to help make Bitcoin prices more human-friendly.
Fleembit
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May 14, 2011, 02:25:09 PM
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Hmph, well now that we can't trust this guy anymore, what options do Canadians have to buy/sell bitcoins for dollars?
JohnDoe
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May 14, 2011, 04:58:45 PM
 #7

Hmph, well now that we can't trust this guy anymore, what options do Canadians have to buy/sell bitcoins for dollars?

You already made up your mind before hearing the other side of the story?
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May 14, 2011, 06:14:57 PM
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Hmph, well now that we can't trust this guy anymore, what options do Canadians have to buy/sell bitcoins for dollars?

You already made up your mind before hearing the other side of the story?

There are thousands of bitcoiners. If a few react quicker than others they will be balanced by those who do not act so quickly.

It's called freedom of mind. Fleembit has every right to feel uncomfortable and it is ridiculous to expect him to just sit there constipated and not ask for other options.

You have the right to call him out and bring balance (with a slight deviation from the nonexistent center).

But neither of you has the right to expect the other to change. Fleembit shows us that his survival instinct is intact, and when governments start opposing bitcoin I think Fleembit will react quickly and correctly. No offense, JohnDoe, but you're more likely to be part of the second wave of reaction. And that's ok, but don't discount the contribution of those who reacted before you, whether you agree with them or not.

Let me give you a counter example:

This last week has been a weird one with Anonymous. I spammed many channels that something was wrong because I had been told so by people I trusted.

You know who resisted the alarm most and left themselves open to being harrassed by a rogue Anon? The scientists and the ADHDs and yes we do have scientists among us.

So Fleembit should be appreciated for having a survival instinct which is what people who stand around accidents do not have.
You deserve credit for calling him out.

Proposal: http://forum.bitcoin.org/index.php?topic=11541.msg162881#msg162881
Inception: https://github.com/bitcoin/bitcoin/issues/296
Goal: http://forum.bitcoin.org/index.php?topic=12536.0
Means: Code, donations, and brutal criticism. I've got a thick skin. 1Gc3xCHAzwvTDnyMW3evBBr5qNRDN3DRpq
Bobby
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May 14, 2011, 06:52:13 PM
 #9

Hmph, well now that we can't trust this guy anymore, what options do Canadians have to buy/sell bitcoins for dollars?
You already made up your mind before hearing the other side of the story?

Quote
Did you use pgp for your communications? The Madhatter has a very good reputation so I feel that something like this need some kind of proof, unless of course he's willing to give an explanation here.

I had already dealt with Mr. Madhatter a few times before and was very satisfied with his service so I wasn't even worried at all about the slight delay this time around.  I took for granted that he would do good on his orders.  All the information I have from him is clearly posted on his website so don't take my word for it just see for yourself and make your own conclusions.  I felt that it was important to communicate the issue to the rest of the community as promptly as possibly and see what other members' opinions on the matter were.

https://www.bitcoin4cash.com/buy.php

Quote
Due to the Bitcoin prices being so volatile I am unable to honor locked in trades at this time. I will still accept open rate trades.

We now offer two types of trade. If you want us to hold the live rate for you, until your letter arrives at our location, please select the "fixed rate" option. This option requires a small up front deposit of 10% (payable in Bitcoins) to reserve Bitcoins from our pool. Once your letter arrives we will return your deposit and honor the locked-in rate. If you decide to cancel your order, we will return your deposit less any rate fluctuations. This is similar to how numerous online gold/silver bullion dealers deal with rate fluctuations.

At least Mr. Madhatter is honest in his dishonesty so I still feel like he has the opportunity to correct his mistake.  I can only assume he will at least return my initial payment since he did refund my 10% deposit already.  It's the fact that he is unwilling the fulfill the original agreement that leads me to no longer trust him. Imagine you had bought a lottery ticket and won the drawing but then the issuer says "well we can't pay you the prize so here's your $1 back".  Gee, thanks!  The original wording of his statement leads one to believe that the bitcoins purchased were available on-hand and reserved to the buyer.  Madhatter fails to give any explanation as to how he was was "unable" to fulfill the orders subsequently and leads one to believe he is simply "unwilling" to do so seeing as how it would be more profitable for him to cancel the orders.
SgtSpike
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May 14, 2011, 06:58:31 PM
 #10

I would suggest leaving some feedback for him here:
http://www.bitcoinfeedback.com/viewuser.php?id=66
ribuck
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May 14, 2011, 07:09:27 PM
 #11

Quote
Due to the Bitcoin prices being so volatile I am unable to honor locked in trades at this time. I will still accept open rate trades.
That's from the "Semi-automated Bitcoin purchase" page, so perhaps it is supposed to say "...I am unable of offer locked in trades at this time...".

For those who paid the fee for the locked-in trade before the order process was changed, well of course there is an ethical duty for Bitcoin4cash to honor the locked-in price.

I await madhatter's response. I've had good dealings with him in the past.
NghtRppr
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May 14, 2011, 07:17:58 PM
 #12

This is why I redesigned my website as a market. Instead of trying to match buyers and sellers using my own money and running all these extra risks, I just hold on to the money and let the buyers and sellers sort things out. It's much more transparent and leaves everyone more satisfied in the long run. I hope you'll consider using my service if/when you get your issues resolved.
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May 14, 2011, 07:42:00 PM
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This is why I redesigned my website as a market. Instead of trying to match buyers and sellers using my own money and running all these extra risks, I just hold on to the money and let the buyers and sellers sort things out. It's much more transparent and leaves everyone more satisfied in the long run. I hope you'll consider using my service if/when you get your issues resolved.

Seems like bitcoin2cash wins this round over bitcoin4cash . . .

I've used both bitcoin4cash and bitcoin2cash's services...sent my money, did some trades, and got my bitcoins.  I worked with bitcoin4cash six months ago and everything was still affordable with less risk.  Now that bitcoins are worth a lot, more is at stake and people's reputation are on the line.

I will most likely use bitcoin2cash's service again over bitcoin4cash only because my letter does not have to cross borders.  If you live in the U.S. your letter will reach its destination faster since bitcoin2cash is based in the U.S. and does not have to pass through customs.  I will also be mailing small increments of money so there is less risk.

bitcoin2cash's openid system is a little tricky and you have to make sure you remember your openid url exactly.  Otherwise you will not be able to login.

There is always a risk so be careful!

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NghtRppr
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May 14, 2011, 07:46:22 PM
 #14

bitcoin2cash's openid system is a little tricky and you have to make sure you remember your openid url exactly.  Otherwise you will not be able to login.

Yes, definitely. The best way is to bookmark your URL so you won't forget it easily.
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May 14, 2011, 08:26:24 PM
 #15

You send money through the post  Huh
gusti
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May 14, 2011, 08:29:21 PM
 #16

Another shameless thread. Seems like kids playing with daddy's wallet.
Risk managing anyone ?
Exchangers not able to manage his risks well, must honour the trades from
own pocket, or ostracized themselves from this community until year 2050.

If you don't own the private keys, you don't own the coins.
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May 14, 2011, 10:01:11 PM
 #17

from the sounds of things and his lack of response, i'm sure he wasn't hedged in any way.  how could u be?  there aren't really any effective ways to do this in a market that's going straight up.  yes, these large sums of money will root out the unscrupulous.  Madhatter was somewhat truculent  with me as well although i was smart enough to pick this up early and not do any business with him.
ribuck
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May 14, 2011, 10:20:02 PM
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i'm sure he wasn't hedged in any way.  how could u be?
You hedge your own position by buying the coins when you guarantee the price.
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May 14, 2011, 10:23:43 PM
 #19

i'm sure he wasn't hedged in any way.  how could u be?
You hedge your own position by buying the coins when you guarantee the price.

This.  Works the same for selling.  That way, you're not gambling with other people's money.

BTC accepted at my browser-based MMO, Minethings.com.  ~1500 active players mining now.
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May 15, 2011, 04:18:30 PM
 #20

i'm sure he wasn't hedged in any way.  how could u be?
You hedge your own position by buying the coins when you guarantee the price.

that takes tremendous discipline.  theres a natural tendency to try and wait for the price to come back under the price u just guaranteed.  its easy for a bull mkt to run away from you.
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