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Warning: Moderators do not remove likely scams. You must use your own brain: caveat emptor. Watch out for Ponzi schemes. Do not invest more than you can afford to lose.

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Author Topic: [BitcoinMax.com] Closed  (Read 178461 times)
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November 01, 2012, 09:59:42 AM
 #2301

What you guys are discussing is called securities fraud in the United States. This is exactly what the US SEC is investigating. Unfortunately Trendon and the pass throughs who may or may not have colluded with Trendon Shavors will probably walk as the word is no one is talking SEC. And without witnesses the investigation will not lead to charges and game over you lose. You are the suckers left holding the worthless investment and who ever defrauded you gets off free.  That how is works. So do something about or stop wining about it on this board.
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November 01, 2012, 10:22:04 AM
 #2302

So you are saying that a bunch of possible scammers can be let off the hook just because they lied when they said that they invested with another scammer?
No. That's it not at all what I'm saying. Why not read what I actually wrote rather than picking a small bit of it and putting the word "just" in front of it?

Quote
If each and every coin from a PPT went to Pirate, well, bummer. But if only a single coin was not passed through, then the PPT should be treated just like Pirate.
Why? Pirate's actions caused people actual harm. You are talking about an action that caused no harm whatsoever to anyone but Pirate. I can't see why you would equate them.

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Let's look at the following hypothetical scene:
1. Pirate starts his business
2. PPT's pop up everywhere
3.1. PPT operator sends every coin to Pirate but pulls out before he defaults, or
3.2. PPT operator uses all coins for other projects, or
3.3. PPT operator simply keeps all the coins
4. Pirate defaults
5. PPT operator keeps the coins and Pirate gets the blame

What you are now saying is that this does not matter although those PPT operators could in fact pay the investors back.
If you have a criminal intend and jumped onto the bandwagon, the chances to get the blame is reduced by 50%.
It makes no difference to a PPT purchaser whether their money actually goes to Pirate or not so long as the PPT operator pays the purchaser exactly the same amount as what Pirate would have paid. The only "victim" of this "scam" is Pirate!

I am an employee of Ripple.
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November 01, 2012, 12:44:18 PM
 #2303

It makes no difference to a PPT purchaser whether their money actually goes to Pirate or not so long as the PPT operator pays the purchaser exactly the same amount as what Pirate would have paid. The only "victim" of this "scam" is Pirate!
True, it doesn't matter for as long as those who invested via a PPT get paid. But if a PPT uses Pirate as an excuse to keep funds, then it matters because it basically is a completely seperate scam. If all funds were forwarded to Pirate, the PPT is left with nothing; maybe even with a loss in case he paid withdrawal requests from his own stash while waiting for the coins from Pirate. However, if a PPT ran his own investments/ponzi disguised as a "honest" PPT, he can claim that everything was lost thanks to Pirate although there are still coins under his control which could be returned. That would mean that there are two different scammers: Pirate and the PPT operator. One gets all the blame while the other walks away whistling.

And it doesn't really help that PPT operators stay all quiet and refuse to help.

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November 01, 2012, 01:19:06 PM
 #2304

It's easy in hindsight, everyone's an expert on Pirate and Ponzi schemes. But in the thick of it 6 months ago, PPT operators would have taken a huge risk to do what you're suggesting, because if Pirate turned out be legit and returned all the coins, then PPT operators had better make sure they can come up with 7% per week somewhere else otherwise they'd get 100% of the blame not just some of it.

Only some naive, gullible investors believed that "Pirate turned out to be legit and returned all the coins". Running a feeder fund requires enough intelligence to easily recognize that that would never happen, particularly because the forum was full of clear warnings and explanations.

Drop that idea. Nobody significantly involved with the fraudulent scheme by running his own feeder fund scheme has ever believed that the pirate ponzi was honest.

Look at the feeder fund operators' behavior now. What do they do? First they whine a bit to create the impression that they were clueless, then some pretend to pursue the pirate (perhaps while secretly discussing their exit strategy with him), then they explain why they cannot pursue the pirate, then they disappear. Do they pay out the rest of the money they kept? No, never. They keep it.
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November 01, 2012, 01:37:39 PM
 #2305

True, it doesn't matter for as long as those who invested via a PPT get paid. But if a PPT uses Pirate as an excuse to keep funds, then it matters because it basically is a completely seperate scam.
I agree, but it's a scam whose only victim is Pirate.

Quote
If all funds were forwarded to Pirate, the PPT is left with nothing; maybe even with a loss in case he paid withdrawal requests from his own stash while waiting for the coins from Pirate. However, if a PPT ran his own investments/ponzi disguised as a "honest" PPT, he can claim that everything was lost thanks to Pirate although there are still coins under his control which could be returned. That would mean that there are two different scammers: Pirate and the PPT operator. One gets all the blame while the other walks away whistling.
Correct. The difference would be that Pirate's scam has innocent victims while the PPT operator's scam has only one victim -- Pirate.

Quote
And it doesn't really help that PPT operators stay all quiet and refuse to help.
Say someone specifically decided to run a "synthetic PPT". They said something like "I think Pirate is a scammer. Rather than making him a ton of money, why don't you make me money. Give me your money and I'll pay you exactly what Pirate would have paid you. You make the same amount either way, but instead of enriching Pirate, you enrich me. I'll take the risk Pirate is legitimate and pay you out in either case."

Surely that wouldn't be a "completely separate scam" if people agreed to it? And there's no rational reason a person who invested in a PPT wouldn't be equally happy in a "synthetic PPT". You have to trust the PPT operator to pay you in either case.

So either this is just "I'm pissed I lost money and someone else might not have been as foolish as I was" or "I'm pissed someone ripped off Pirate". There's no legitimate gripe -- just a technical violation of a contract whose only victim is Pirate. And, again, there's no evidence whatsoever that this even happened. So it's an alleged technical violation of a contract based on nothing but a hunch.

I am an employee of Ripple.
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November 01, 2012, 03:11:42 PM
 #2306

I wouldn't really call Pirate a victim.

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November 01, 2012, 03:49:18 PM
 #2307

I wouldn't really call Pirate a victim.
Exactly. That's why it doesn't matter.
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November 03, 2012, 01:18:26 PM
 #2308

I realize the info is proly around, but no time to find it - can someone tell me exactly how much bitcoinmax had in total in btcst at the time pirate shut down? I've heard it was around 120K BTC.

Last outside analysis (block chain) showed 83k real balance (BTC paid - BTC returned, this is the actual fund flow) and 148k paper balance (extrapolated, this is what an account balance might have been showing). Though it depends on the cut-off date, the paper balance was exploding in the end, 7% weekly is quite the growth. That said, I don't think caring about the paper balance makes much sense.
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November 03, 2012, 02:51:16 PM
 #2309

USA and Australia are in a perverted relationship but in this particular case, it's is actually good news. Smiley
SEC has probably no problems dragging this guys ass to ASIC (Australian Securities and Investments Commission) office for questioning.

BCB, add him to your list.

While reading what I wrote, use the most friendliest and relaxing voice in your head.
BTW, Things in BTC bubble universes are getting ugly....
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November 03, 2012, 03:50:48 PM
 #2310

EskimoBob

I hear you.

My (seemingly false) assumption was the the PPT's would be just as interested in tracking Trendon as all of the individual creditors.  However as I read the posts here and elsewere is seem there is a real FEAR among all of the PPT's that they would face additional, unknown, legal liability and possible  tax liability by getting involved in an SEC investigation.

If I was a PPT and what I was doing was 1. not illegal according to existing laws and 2. not deceptive, and I lost a significant amount of fund to Trendon Shavors (thus having a loss and NO tax liability), I would be first in line to participate in an SEC investigation to prosecute Trendon Shavors and attempt to recover my funds.

However what seems to have happened is that most if not all of the PPT has essentially disappeared.   So that lead to the the following possibilities:

1.  The PPT's Colluded with Trendon Shavor to deceive investors in an effort to profit
2.  The PPT's had no idea was Trendon Shavors was doing but profited anyway.
3.  Something else the PPT'S were doing was deceptive or illegal thus the lack of desire to participate in any legal/government investigation for fear of this activity being uncovered.


The other concern I have and have seen debated here is that bitcoinlandia is populated with not a few libertarians and anarchists and they use bitcoin exactly because it is an extra-governmental medium of exchange.  Now that a fraud/theft has occurred,  some wonder why we are now crying to "Big Brother" now that we've suffered a loss.

My conclusion is that we live in counties of laws and regulations.  It is inevitable that bitcoin will become regulated in some way at some time (possibility with this case) so why not use the existing legal structure to redress a wrong.  And those who chose not to take that route are probably criminals, fraudsters, "scammers" who are hiding under a libertarian veil in an effort to remain unexposed as the fraudter that they are.

Bottom line is I was not personally defrauded by these individuals.  And therefore I am not able to participate in any investigation because any knowledge I have is second hand (hearsey) and not admissible.  If any defrauded creditors wants to see a resolution to this situation, they need to contact the SEC and be interviewed on the record (NOT anonymously) otherwise nothing is going to happen.  The bad guys get away and no one will ever see their BTC again.

But it also seems to me that many of the defrauded creditor are plenty happy to just piss and moan about their situation on these boards with in reality nothing is being done.

I've tracked down and recovered (sometimes across several time zones) a few hundred dollars  from scammer who have defrauded me.  It just boggles my mind that defrauded investors how lost 10's if not 100's of K of USD choose to do nothing.  I  just don't understand that.

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November 03, 2012, 04:53:50 PM
 #2311

Don' you guys have something called 5th amendment over there?  Roll Eyes
PPT operator or any victim can always make a deal with the Alphabet Agencies and only then testify.

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BTW, Things in BTC bubble universes are getting ugly....
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November 03, 2012, 05:05:58 PM
 #2312

** I am not a lawyer.  Anyone with assumed risk should contact their own attorney for advice***


The SEC does have certain "cooperation tools" at it's disposal which include a proffer agreements

"A proffer agreement allows the government to get information, usually from a witness, before a criminal trial starts. The government, however, cannot use the informant's testimony in court.  The government often uses this agreement with people under investigation to gain information that can help the government prosecute other crimes.

Misconceptions
Proffer agreements and immunity are not the same thing, according to U.S. Legal. The government can prosecute the proffer witness if information leads to new crimes or if the witness lies in his proffer statement.


Here is an interesting examination of the thorny issue of proffers:
http://corporate.findlaw.com/litigation-disputes/queen-for-a-day-the-dangerous-game-of-proffers-proffer.html
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November 03, 2012, 05:12:29 PM
 #2313

Why PPT operators have to go SEC?
They from start said they just acting as pass-through only & if pirateat40 defaults, they also default.
Pirateat40 defaulted, so all other PPT's defaulted.
Game over PERIOD. 
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November 03, 2012, 05:14:49 PM
 #2314

Why PPT operators have to go SEC?
They from start said they just acting as pass-through only & if pirateat40 defaults, they also default.
Pirateat40 defaulted, so all other PPT's defaulted.
Game over PERIOD. 

No one has to go to the SEC.  However if this was an option to recover funds, which the PPT's said they too lost, why would they not go to the SEC is the Bigger question.

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November 03, 2012, 05:40:21 PM
 #2315

Why PPT operators have to go SEC?
They from start said they just acting as pass-through only & if pirateat40 defaults, they also default.
Pirateat40 defaulted, so all other PPT's defaulted.
Game over PERIOD. 
PPT operators have refused to work with Pirate on a repayment plan (how that would have ended is an entirely different topic) by releasing information even when their investors gave permission. They said that only they are investing with Pirate, so who their clients are is nothing Pirate should know and he has to pay them only so they can forward the investments. At that point they made the clear statement that they take responsibility by refusing to let end-users settle with Pirate (again, if that would have worked doesn't matter). Now the PPT operators stay all quiet and don't even reply to a PM anymore and refuse to cooperate.

For me this raises questions:
- would it have been possible to settle with Pirate directly? (chances are low, but we will never know)
- are PPT operators dropping this because they earned enough and have no personal losses to care about?
- if no, why aren't they trying to get at least some coins back?
- if yes, why isn't my withdrawal request (made before Pirate admitted default) fulfilled?
- why are they refusing to even reply when they made such bold statements when it all started?

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November 03, 2012, 05:46:23 PM
 #2316

Good points Bitsky.

If you did nothing wrong sounds like you'd be an ideal candidate to be interviewed with the SEC.  Bitching and moaning on these channels is going to do nothing to recover your funds.  Just ask the MyBitcoin, Bitcoinica, Bitfloor creditors.
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November 03, 2012, 06:14:02 PM
 #2317

PPT operators have refused to work with Pirate on a repayment plan (how that would have ended is an entirely different topic) by releasing information even when their investors gave permission. They said that only they are investing with Pirate, so who their clients are is nothing Pirate should know and he has to pay them only so they can forward the investments. At that point they made the clear statement that they take responsibility by refusing to let end-users settle with Pirate (again, if that would have worked doesn't matter). Now the PPT operators stay all quiet and don't even reply to a PM anymore and refuse to cooperate.

For me this raises questions:
- would it have been possible to settle with Pirate directly? (chances are low, but we will never know)
- are PPT operators dropping this because they earned enough and have no personal losses to care about?
- if no, why aren't they trying to get at least some coins back?
- if yes, why isn't my withdrawal request (made before Pirate admitted default) fulfilled?
- why are they refusing to even reply when they made such bold statements when it all started?

It would not surpise me one bit if they were all in bed with the pirate.

But even if they aren't, they most likely understood the system better than most investors and made sure they got out neatly.
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November 03, 2012, 09:40:26 PM
 #2318

Why PPT operators have to go SEC?
They from start said they just acting as pass-through only & if pirateat40 defaults, they also default.
Pirateat40 defaulted, so all other PPT's defaulted.
Game over PERIOD. 

No one has to go to the SEC.  However if this was an option to recover funds, which the PPT's said they too lost, why would they not go to the SEC is the Bigger question.

@PPT operators: what you going to do now?
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November 04, 2012, 12:38:48 AM
 #2319

We gave money to strangers promising fantastic returns and paid the price for being that stupid.

Nobody will ever see a single coin of his invested money again. Ever ! No matter how many mails or pm you people write. I wish an angry bastard mod would lock this thread so we can move on.

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November 04, 2012, 12:45:19 AM
 #2320

Turbor,

Moving on an hopefully learning from your mistakes is certainly good advice.  

However regardless if there is a recovery of funds, I do think there will be some satisfaction when this guy is caught and prosecuted.

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