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Author Topic: [Payout Updates] Bitcoinica site is taken offline for security investigation  (Read 145614 times)
coin_toss
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June 12, 2012, 02:44:40 PM
 #601

I haven't done much research, but to my best knowledge, DRS only applies to NZ residents.

I can not find this restriction in the Financial Service Providers (Registration and Dispute Resolution) Act 2008:

http://www.legislation.govt.nz/act/public/2008/0097/latest/whole.html

Quote
7Application of Act
(1)This Act applies to persons who are in the business of providing a financial service.

Quote
8ATerritorial scope
This Act applies to a person who—
(a)is ordinarily resident in New Zealand (within the meaning of section 4 of the Crimes Act 1961) or has a place of business in New Zealand, regardless of where the financial service is provided; or
(b)is, or is required to be, a licensed provider under a licensing enactment.
Section 8A: inserted, on 1 July 2010, by section 10 of the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2010 (2010 No 41).

So this only applies to the director of BITCOINICA CONSULTANCY LIMITED (Christopher Heaslip from http://www.irstax.co.nz/ )

Even if what you said is true and DRS only applies to NZ residents, BITCOINICA LP would still be required by law to register with a DRS if at least 1 customer of Bitcoinica.com is a resident of NZ.

Zhou is right:

Quote

Section 48
    (1) Every financial service provider must be a member of either an approved dispute resolution scheme, or the reserve scheme, in respect of a financial service provided to a retail client.

Bitcoinica are thus required to have a DRS in respect of their 'retail clients'. Given that this is NZ legislation, 'retail clients' can be taken to mean NZ retail clients. So unless you're from NZ, this won't really help you. In any case, Bitcoinica seem to have begun the refunding process. Why not give them a chance to resolve the matter themselves?

Involving a DRS, just like suing Bitcoinica, will only result in further delay, difficult and expensive arbitration proceedings as lawyers argue over the difficult legal questions around whether Bitcoins constitute money or not, and ultimately, less money refunded to Bitcoinica users. In my opinion, the best approach would be to simply submit a claim and wait it out - as hard and unfair as that may seem. Let bitcoinica refund everyone as best they can, and then, if you're not still not happy, pursue it in the courts.
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June 12, 2012, 02:48:39 PM
 #602

Edit:  To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.

diagnosis: nonsense
treatment: contract law 101



Then I'm at a loss for why bitcoinica didn't go after Linode?  I'm sincerely asking here, I don't know much about contract law.  Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?
Raoul Duke
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June 12, 2012, 03:02:19 PM
 #603

Edit:  To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.

diagnosis: nonsense
treatment: contract law 101



Then I'm at a loss for why bitcoinica didn't go after Linode?  I'm sincerely asking here, I don't know much about contract law.  Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?

Bitcoinica got $350k stolen from them in 2 different hacks and they didn't report it to the police. What are you expecting? Miracles?
Add to it that those thefts, even without the theft of the bitcoins, would be a crime of computer intrusion and it's even more surprising that none of them were reported to any authority.

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June 12, 2012, 03:08:32 PM
 #604

Edit:  To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.

diagnosis: nonsense
treatment: contract law 101



Then I'm at a loss for why bitcoinica didn't go after Linode?  I'm sincerely asking here, I don't know much about contract law.  Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?

Bitcoinica got $350k stolen from them in 2 different hacks and they didn't report it to the police. What are you expecting? Miracles?
Add to it that those thefts, even without the theft of the bitcoins, would be a crime of computer intrusion and it's even more surprising that none of them were reported to any authority.

If they had been reported, do you think that Linode could have been held responsible for the value lost despite that their ToS states that they aren't?
Raoul Duke
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June 12, 2012, 03:18:15 PM
 #605

Edit:  To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.

diagnosis: nonsense
treatment: contract law 101



Then I'm at a loss for why bitcoinica didn't go after Linode?  I'm sincerely asking here, I don't know much about contract law.  Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?

Bitcoinica got $350k stolen from them in 2 different hacks and they didn't report it to the police. What are you expecting? Miracles?
Add to it that those thefts, even without the theft of the bitcoins, would be a crime of computer intrusion and it's even more surprising that none of them were reported to any authority.

If they had been reported, do you think that Linode could have been held responsible for the value lost despite that their ToS states that they aren't?

I bet the PR nightmare would make them reach a deal and pay long before it went to trial.

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June 12, 2012, 03:51:02 PM
 #606

Edit:  To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.

diagnosis: nonsense
treatment: contract law 101



Then I'm at a loss for why bitcoinica didn't go after Linode?  I'm sincerely asking here, I don't know much about contract law.  Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?

Bitcoinica got $350k stolen from them in 2 different hacks and they didn't report it to the police. What are you expecting? Miracles?
Add to it that those thefts, even without the theft of the bitcoins, would be a crime of computer intrusion and it's even more surprising that none of them were reported to any authority.

If they had been reported, do you think that Linode could have been held responsible for the value lost despite that their ToS states that they aren't?

I bet the PR nightmare would make them reach a deal and pay long before it went to trial.

There didn't seem to be too much of a PR problem for them and the story was accurately reported on a bunch of widely read websites (e.g. Arstechnica).  IIRC, Linode explicitly admitted it was their system that was compromised because of the way they had their customer service portal configured.
Raoul Duke
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June 12, 2012, 03:56:57 PM
 #607

Ofcourse it wasn't a PR problem. Did anyone asked them for money or sued them? As fast as it was reported it died.
I guess most of the persons who could give them a fight are too embarassed to admit they even use bitcoins, to begin with.

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June 12, 2012, 06:21:10 PM
 #608

So people that have open position on bitcoinia still don't know what is going on with that... and the price in bitcoins are going up, wouldn't you hire more staff to handle these claims before the price in bitcoins really goes higher...  The longer bitcoinica takes the more they lose, and im speculating that bitcoins will be alot higher before I get my bitcoins back.

Bitcoinica still has not given me 50% of my claim of 600 BTC
INTERSANGO can go down with bitcoinica for abandoning customers
Alberto Armandi is a SCAMMER
Mushoz
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June 12, 2012, 06:27:48 PM
 #609

So people that have open position on bitcoinia still don't know what is going on with that... and the price in bitcoins are going up, wouldn't you hire more staff to handle these claims before the price in bitcoins really goes higher...  The longer bitcoinica takes the more they lose, and im speculating that bitcoins will be alot higher before I get my bitcoins back.

If they just give people some information, people can hedge their positions. But alas, they aren't giving the information because they haven't decided yet. In my opinion, such a decision should be priority. But then again, who am I decide what's best for them?

www.bitbuy.nl - Koop eenvoudig, snel en goedkoop bitcoins bij Bitbuy!
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June 12, 2012, 06:47:31 PM
 #610

So people that have open position on bitcoinia still don't know what is going on with that... and the price in bitcoins are going up, wouldn't you hire more staff to handle these claims before the price in bitcoins really goes higher...  The longer bitcoinica takes the more they lose, and im speculating that bitcoins will be alot higher before I get my bitcoins back.

On the bright side, if you the price of bitcoins continues to go up, then maybe bitcoinica's grip will keep you from selling out too early.  See, there's always a silver lining.
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June 12, 2012, 07:30:14 PM
 #611

if anyone wonders how positions will be liquidated here is the best answer I could find, https://intersango.com/terms.php (whether relevant to bitcoinica or not)

Quote
ACCOUNT CLOSURE PROCEDURE
These procedures represent a typical account closure; we reserve the right to change, modify, or completely ignore these procedures.
Your bitcoin balance will be liquidated
A check will be mailed to you at your expense for all resulting funds.

The most hilarious part was emphasized by yours truly.

Clauses 13, 14, and 15 on that page also have significant comedy value.




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Phinnaeus Gage
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June 12, 2012, 10:31:28 PM
 #612

I believe that the company had plans to amend the Terms of Service to mention the illegibility of NZ non-accredited/non-institutional investors for Bitcoinica service.

You mean the Terms of Service available at: https://bitcoinica.com/pages/tos ?

Oh, that's right - Customers did not have access to terms of service for over a month, at a time where it matters the most.

Speaking of ToS:

Quote
[17] Force Majeure

You agree that Bitcoinica will not be liable in any way to you or to any other person in the event of force majeure, or for the act of any Government or legal authority, or for the failure of or damage or destruction to its computer systems, data or records or any part thereof, or for delays, losses, errors or omissions resulting from the failure or mismanagement of any telecommunications or computer equipment or software. The parties shall be released of all responsibilities for partial, full or non-fulfillment, as well as for improper fulfillment of the obligations under this Agreement, if such non-fulfillment or improper fulfillment was a result of extraordinary events, which occurred after this Agreement was concluded and which the party could not either foresee or prevent (natural calamities, wars, armed conflicts etc.).

I assume Bitcoinica is not treating this incident as Force Majeure? If not, how is Bitcoinica LP treating it?


Let's assume that those tos are geniune.

See bold text. Bitcoinica, who the hell came up with this drivel for you. Do you really think you can write this shit into Force Majeure and everything is hanky dory and you can just continue to be be as grossly negligent as you are? Yea nice lawmanship. Get proper lawyer to draft for you the terms. Bitcoinica, with such drivel in force majeure clause you are way better off without one.

tl;dr Bitcoinica thinks that having their computers hacked releases it from any liabilities to everyone.

I don't see what's so shocking about that.  Isn't that exactly what Linode thinks (as was written in their ToS), and, infact, what ended up being the case for the big hack a few months ago?  If I remember, all Bitcoinica ended up getting was an apology and an offer of free service for a year.

Edit:  To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.

I wonder if it's binding when it's only copied and pasted from some other website: https://www.google.com/search?sugexp=chrome,mod=14&sourceid=chrome&ie=UTF-8&q=%22or+records+or+any+part+thereof%2C+or+for+delays%2C+losses%22

~Bruno~
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June 12, 2012, 10:51:28 PM
 #613


Why on earth would that matter?  Most contracts are full of stock standard clauses and boilerplates - it would be more unusual if Bitcoinica's didn't include those.

Putting a force majeure clause into a contract doesn't mean it will hold up in court - especially if you're trying to include things over which you should reasonably have had control and mitigated risk. 

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
phantomcircuit
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June 12, 2012, 11:31:37 PM
 #614

There is now a password form on the claims page.

Please enter your password to verify you are indeed the rightful owner of the account.
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June 12, 2012, 11:33:37 PM
 #615

There is now a password form on the claims page.

Please enter your password to verify you are indeed the rightful owner of the account.
How are you verifying these passwords, without a database? Or is this the 1/5 that was reconstructed?
ninjarobot
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June 12, 2012, 11:51:18 PM
 #616

There is now a password form on the claims page.

Please enter your password to verify you are indeed the rightful owner of the account.

I'm not seeing a password form on https://claims.bitcoinica.com (yes I did a hard refresh of the page)

I also received the following email from Bitcoinica verify@bitcoinica.com via sendgrid.info:

Quote
Please verify your ownership of the claimed account by opening the claim and authenticating.

A link and some instructions would have been helpful here..

And to echo dree12's question: How are you verifying these passwords, without a database?
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June 12, 2012, 11:53:36 PM
 #617



What does this mean? 
Transisto
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June 12, 2012, 11:53:48 PM
 #618

Quote
Please verify your ownership of the claimed account by opening the claim and authenticating.

Sorry I don't understand.  ,,, I don't feel like trying either.

Please care to elaborate.
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June 12, 2012, 11:55:21 PM
 #619

Just follow the link you received when you first filled the claim. There you have the new password form.
ninjarobot
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June 12, 2012, 11:59:14 PM
 #620

Quote
No password hash found please contact verify@bitcoinica.com to request manual verification

bummer. Does this mean you only have a partial record of password hashes?
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