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Author Topic: [Payout Updates] Bitcoinica site is taken offline for security investigation  (Read 145699 times)
BadBitcoin (James Sutton)
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June 06, 2012, 07:39:57 PM
 #261

Since nobody seems to be reading the verify@bitcoinica emails I agree with Kokjo and kindly remind you to send me my 101 BTC  to: 1ET2ps7BRrZnDeq7bVNc8bS9ZmgN8DxUXy   - consider the BTC pocket change you owe me and my 3 cents USD a going away gift.

I respectfully do not care who pays for it, and this is not a trivial amount to me. You're not the only one with tuition fees to pay.

Afterwards, I promise to stop asking you on this forum for what is rightfully mine. Thank you.
You speculated with tuition money (money you cannot afford to lose), and did so on a bucket shop built in 4 days by a 17yo that was hacked 2 times before this? D00d. Even though I am quite sure people will get back their funds, I don’t feel sorry for the prospect of anyone possibly losing money on this because noone should have left any non-expendable money there.

People need to do a bit more due diligence on the businesses they leave their BTC with.

I do not think that is quite fair. I'm on vacation right now and while I don't need my money instantly, I would very much like it as the amount I had goes a long way where I am. I had budgeted with the expectation that I would have access to that money and now my budget has changed.

Yes, I was speculating and yes I was prepared to lose some of it through speculation (through stops/limits), but the idea that I would have no access to my money with this kind of silence from everyone but Zhou (who is the only one talking to us, even though he has no control) is surprising, given that this is a registered corporation. This isn't bitscalper or that anonymous wallet service from a year or so ago. This is a corporation, with real people behind it that are operating in a regulated fashion. This is not how they should behave and to be surprised by this and to say the amount you had in there was not trivial is legitimate.

On the plus side, I still feel a degree of comfort that we'll get at least some of our money back, due to this being a legal and regulated entity. The question is when, and I don't know enough about corporate law in NZ to know that.

Your post pretty much proves you have no clue about, or were neglecting willfully, counter party risk.

Expecting your counter party to not go bust is speculation too, especially in this case after a history of previous theft. Also in this case a registered limited partnership is probably a better shield to the limited partner than you, but I have no clue about NZ law.

I hope you and we all get some of our money back in time.



My point wasn't that there was NO risk, but that Bitcoinica was, on paper, one of the safest and most legitimate bitcoin companies to store BTC or USD with. To be surprised by the lack of professional response now doesn't make you stupid or naive. Of course they could go bust or be subject to an attack; that part isn't surprising. The neglect they're displaying towards their customers, given that they had a brand that survived past attacks and have the funds to compensate us ready is what is surprising.

Having USD in a company like that isn't as safe as having it in a bank, but in terms of counter party risk, it was about as good as it got when it came to BTC. They do have a legal obligation to us; they are not anonymous. It is entirely legitimate to be more upset and surprised about this current behavior than with anonymous e-wallets or fly-by-night exchanges. That is all I'm getting at. People who are upset have a right to be and it is sad seeing keyboard warriors tell them they should have done more due diligence about where they put their BTC. Hindsight is 20/20, right?

When Zhou says he hates seeing his brand ruined, I have to agree. We will probably all get our money back, but this present behavior is unacceptable.

+1

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June 06, 2012, 07:57:12 PM
 #262

When Zhou says he hates seeing his brand ruined, I have to agree. We will probably all get our money back, but this present behavior is unacceptable.


He shouldn't have hosted his mission-critical web site with live money accounts in a cheapo VPS server AGAIN. Huh.

His reputation is toast for good reason. Not that many people will care in a few years time though.

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June 06, 2012, 08:16:43 PM
 #263

Bitcoinica Consultancy - Can you please explain why you filed for a 'Change of Company Name' on 30 May 2012 12:56?

Quote
CORE CREDIT LIMITED was incorporated under the
Companies Act 1993 on the 30th day of January 2012
and changed its name to BITCOINICA CONSULTANCY LIMITED on the 30th day of
May 2012.

http://www.business.govt.nz/companies/app/ui/pages/companies/3715077/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages%2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Dentities%26q%3DCore%2520Credit%2520Limited
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June 06, 2012, 09:05:34 PM
 #264

I don't even know myself. I only know that I'm still an employee.

hmmm... guys... why would you trust a company that resorts to child labor?

(inquiring again, on purpose)

https://mtgox.com/terms_of_service
Quote
they are at least 18 years of age and have the full capacity to accept these Terms and enter into a transaction resulting on the Platform

Is it safe to assume that Zhou Tong did not have an account at Mt Gox?

~Bruno~
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June 06, 2012, 09:09:29 PM
 #265

I don't even know myself. I only know that I'm still an employee.

hmmm... guys... why would you trust a company that resorts to child labor?

(inquiring again, on purpose)

https://mtgox.com/terms_of_service
Quote
they are at least 18 years of age and have the full capacity to accept these Terms and enter into a transaction resulting on the Platform

Is it safe to assume that Zhou Tong did not have an account at Mt Gox?

~Bruno~


Ehhhh, as far as I know Zhoutong ages as well. And as far as I know he's already 18 years old.

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June 06, 2012, 09:33:34 PM
 #266

Since nobody seems to be reading the verify@bitcoinica emails I agree with Kokjo and kindly remind you to send me my 101 BTC  to: 1ET2ps7BRrZnDeq7bVNc8bS9ZmgN8DxUXy   - consider the BTC pocket change you owe me and my 3 cents USD a going away gift.

I respectfully do not care who pays for it, and this is not a trivial amount to me. You're not the only one with tuition fees to pay.

Afterwards, I promise to stop asking you on this forum for what is rightfully mine. Thank you.
You speculated with tuition money (money you cannot afford to lose), and did so on a bucket shop built in 4 days by a 17yo that was hacked 2 times before this? D00d. Even though I am quite sure people will get back their funds, I don’t feel sorry for the prospect of anyone possibly losing money on this because noone should have left any non-expendable money there.

People need to do a bit more due diligence on the businesses they leave their BTC with.

I do not think that is quite fair. I'm on vacation right now and while I don't need my money instantly, I would very much like it as the amount I had goes a long way where I am. I had budgeted with the expectation that I would have access to that money and now my budget has changed.

Yes, I was speculating and yes I was prepared to lose some of it through speculation (through stops/limits), but the idea that I would have no access to my money with this kind of silence from everyone but Zhou (who is the only one talking to us, even though he has no control) is surprising, given that this is a registered corporation. This isn't bitscalper or that anonymous wallet service from a year or so ago. This is a corporation, with real people behind it that are operating in a regulated fashion. This is not how they should behave and to be surprised by this and to say the amount you had in there was not trivial is legitimate.

On the plus side, I still feel a degree of comfort that we'll get at least some of our money back, due to this being a legal and regulated entity. The question is when, and I don't know enough about corporate law in NZ to know that.

Your post pretty much proves you have no clue about, or were neglecting willfully, counter party risk.

Expecting your counter party to not go bust is speculation too, especially in this case after a history of previous theft. Also in this case a registered limited partnership is probably a better shield to the limited partner than you, but I have no clue about NZ law.

I hope you and we all get some of our money back in time.



My point wasn't that there was NO risk, but that Bitcoinica was, on paper, one of the safest and most legitimate bitcoin companies to store BTC or USD with. To be surprised by the lack of professional response now doesn't make you stupid or naive. Of course they could go bust or be subject to an attack; that part isn't surprising. The neglect they're displaying towards their customers, given that they had a brand that survived past attacks and have the funds to compensate us ready is what is surprising.

Having USD in a company like that isn't as safe as having it in a bank, but in terms of counter party risk, it was about as good as it got when it came to BTC. They do have a legal obligation to us; they are not anonymous. It is entirely legitimate to be more upset and surprised about this current behavior than with anonymous e-wallets or fly-by-night exchanges. That is all I'm getting at. People who are upset have a right to be and it is sad seeing keyboard warriors tell them they should have done more due diligence about where they put their BTC. Hindsight is 20/20, right?

When Zhou says he hates seeing his brand ruined, I have to agree. We will probably all get our money back, but this present behavior is unacceptable.

It's claimed the whole thing was cobbled together by a 17y old in 4 days. On launch someone advised him to back down, because he will lose a lot of foreigners money. It was hacked. It was hacked *again*.

Yet you claim it was not only safe and sound, but the safest and most legitimate BTC bussiness at all.

Now my advise to you: stay away and move away from investing any money in BTC at all. If you can't even see it in hindsight you should not trust yourself to make financial decisions with even a modicum of risk, and certainly not in anything you yourself deemed not as good as bitcoinica.

Greed is a bitch, it makes us gloss over the negative sides. I myself had more in bitcoinica than I am comfortable to lose, but I always thought a total loss possible. Let's hope it won't come to that, but try to learn from it.


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June 06, 2012, 09:56:35 PM
 #267

What an absolute cluster eff.  On the bright side, it's a testament to how far along bitcoin has come since last year that the price hasn't fallen off a cliff.

You aren't looking upside down enough...

Argumentum ad lunam: the fallacy that because Bitcoin's price is rising really fast the currency must be a speculative bubble and/or Ponzi scheme.
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June 06, 2012, 11:07:20 PM
 #268

What an absolute cluster eff.  On the bright side, it's a testament to how far along bitcoin has come since last year that the price hasn't fallen off a cliff.

You aren't looking upside down enough...

Huh?
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June 06, 2012, 11:48:17 PM
 #269

Any official words on long/short liquidation price? Or how to determine them? Should we discuss a fair way to determine them? I would suggest average price between start of this incident and the time of actual payout, thought?
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June 07, 2012, 12:08:15 AM
 #270

Any official words on long/short liquidation price? Or how to determine them? Should we discuss a fair way to determine them? I would suggest average price between start of this incident and the time of actual payout, thought?

That's something the general partners will decide.   It's unlikely that they're just going to come up a plan which they think is "fair" without having it reviewed by lawyers and accountants to ensure that it's compliant with their legal obligations (and it this point they haven't disclosed whether they intend to cease trading and liquidate the company entirely or whether they intend to resume trading once this clusterfuck is sorted out).  With several hundred thousand dollars involved, it's unlikely that they'll risk their legal protections by not doing things according to established practice.

Quote from: zhoutong
Before that, even though I didn't have any financial interest, I was still recognized as CEO and most of my actions were approved by Tihan.

Were you able to act without Tihan's approval during that period?  Were you solely responsible for making decisions about Bitcoinica's day to day operations between January and April?  If not, with whom were you required to consult?

Quote from: zhoutong
The problem is, Bitcoinica LP is a Limited Partnership, with a General Partner being a limited company (it could be either Core Credit Ltd or Bitcoinica Consultancy Ltd, depending on their status and agreement). Most likely the limited company has no or very little capital.

According to them, Bitcoinica Consultancy is the General Partner in Bitcoinica LP and the recent name change seems to support this.  What's not clear is who was actually in control of Bitcoinica prior to the "official" date of ownership change as opposed to who was nominally managing the company.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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June 07, 2012, 12:25:55 AM
 #271

Created a little doc that tries (to the best of my understanding) to combine the bits and pieces of info from Bitcoinica into a more coherent doc covering the who/what/when aspects. I created it mainly for myself to get a better picture of the situation, but I figured others might find it useful so sharing here:

http://dl.dropbox.com/u/1007482/BitcoinicaOverview.pdf

Note: If anything is incorrect please let me know and I will update Smiley
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June 07, 2012, 12:30:33 AM
 #272

don't put much expection on them Embarrassed Embarrassed
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June 07, 2012, 12:36:12 AM
 #273

Created a little doc that tries (to the best of my understanding) to combine the bits and pieces of info from Bitcoinica into a more coherent doc covering the who/what/when aspects. I created it mainly for myself to get a better picture of the situation, but I figured others might find it useful so sharing here:

http://dl.dropbox.com/u/1007482/BitcoinicaOverview.pdf

Note: If anything is incorrect please let me know and I will update Smiley

Excellent job.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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June 07, 2012, 12:40:03 AM
 #274

Created a little doc that tries (to the best of my understanding) to combine the bits and pieces of info from Bitcoinica into a more coherent doc covering the who/what/when aspects. I created it mainly for myself to get a better picture of the situation, but I figured others might find it useful so sharing here:

http://dl.dropbox.com/u/1007482/BitcoinicaOverview.pdf

Note: If anything is incorrect please let me know and I will update Smiley

Good job, thanks for your effort.
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June 07, 2012, 01:08:49 AM
 #275

Any official words on long/short liquidation price? Or how to determine them? Should we discuss a fair way to determine them? I would suggest average price between start of this incident and the time of actual payout, thought?

The only 100% fair determination is the lowest price and highest price in the duration, plus 6% p.a. interest (about 0.5% margin). Shorts will be liquidated at the lowest price and longs will be liquidated at the highest price. This way no one can manage to get a better deal and any "opportunity cost" claims will be invalid.

However, this will result in $200,000 additional loss for Bitcoinica, and I don't think they will do that.

Anyway, this could be prevented by announcing a settlement plan immediately beforehand. It's unfortunate that the losses are running so fast.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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June 07, 2012, 01:23:55 AM
 #276

His reputation is toast for good reason. Not that many people will care in a few years time though.
 

This is foolish.  I'm so impressed by what he accomplished with Bitcoinica, and I'd bet on him in a heartbeat.

He probably needs to stop talking here so much, though. Smiley
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June 07, 2012, 01:25:36 AM
 #277

Quote
Bitcoinica ToS.  [12] Limitation of Liability

In no event shall Bitcoinica, its officers, directors or employees be liable for lost profits or any special, incidental or consequential damages arising out of or in connection with our web site, our services or this agreement (however arising, including negligence) except as stated in this agreement. The liability of Bitcoinica, its officers, directors or employees, to you or any third parties in any proven circumstance is limited to the amount of money you transferred or deposited in your account at Bitcoinica in relation to the transaction giving rise to such liability.

Anything over and above returning user deposits is really a moot point unless there's a substantial excess of liquid assets remaining after those deposits have been returned (if that was the case, Bitcoinica wouldn't be reliant on Tihan injecting more funds in order to meet anticipated claims).

I wouldn't throw yet another $200,000 at Bitcoinica unless I was certain that it would rebuild the credibility of the brand and make the business profitable again - I'd invest it in another company which didn't have reputation damage and whose management wasn't distrusted by customers.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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June 07, 2012, 02:40:58 AM
 #278

Quote
However, this will result in $200,000 additional loss for Bitcoinica, and I don't think they will do that.

When push comes to shove(l) to Bitcoiners who "Mine for Dollars", you simply tap the big rigs like Tihan Seale, Tim Draper and Jack Jolley (treasurer at Microsoft). Otherwise, an old seasteading term comes to mind: Fix the rig, or see the brig. (Google that phrase using quotes. You'll be taken aback of what you'll find.)

~Bruno~

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June 07, 2012, 02:48:13 AM
 #279

Quote
However, this will result in $200,000 additional loss for Bitcoinica, and I don't think they will do that.

When push comes to shove(l) to Bitcoiners who "Mine for Dollars", you simply tap the big rigs like Tihan Seale, Tim Draper and Jack Jolley (treasurer at Microsoft). Otherwise, an old seasteading term comes to mind: Fix the rig, or see the brig. (Google that phrase using quotes. You'll be taken aback of what you'll find.)

~Bruno~



Information No results found for "Fix the rig, or see the brig".
Results for Fix the rig, or see the brig (without quotes):

Doesn't seem that shocking.
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June 07, 2012, 02:56:20 AM
 #280

Quote
However, this will result in $200,000 additional loss for Bitcoinica, and I don't think they will do that.

When push comes to shove(l) to Bitcoiners who "Mine for Dollars", you simply tap the big rigs like Tihan Seale, Tim Draper and Jack Jolley (treasurer at Microsoft). Otherwise, an old seasteading term comes to mind: Fix the rig, or see the brig. (Google that phrase using quotes. You'll be taken aback of what you'll find.)

~Bruno~


Information No results found for "Fix the rig, or see the brig".
Results for Fix the rig, or see the brig (without quotes):

Doesn't seem that shocking.

Therefore, you were taken aback when you discovered nothing. (See what I did there?)

~Bruno~
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