[Payout Updates] Bitcoinica site is taken offline for security investigation

[Matthew N. Wright]

Joel,

I wasn't referring to you AT ALL with my statement. We might disagree in a few things, but I know your opinions are yours and unbiased.

Hi Roberto,

Would you mind sharing with us who you were referring to?

Could you also take the time to answer the very important questions on the previous page here?

As it has been several pages of responses from you the first time these questions were asked and you still haven't responded to them since I -reposted- them, and these questions could definitely redeem your actions completely, it's not helping me to understanding your side of the issue much and frankly makes things look even more negative.

Thanks!

Looking forward to clearing up all the confusion through transparency.

[Vitalik Buterin]

Hello, I'm Vitalik Buterin, the one who wrote the article. The following are my personal opinions, and do not represent an official position of anyone.

I agree with Matthew's posts above. I concede that the information that Zhou Tong made a $40k LR transaction itself is not private since, as Roberto pointed out, Zhou himself earlier admitted this. However, the information that Aurum and MtGox released stretches a bit beyond this. It also includes that:

1. Zhou had not been a customer of Aurum before that transaction
2. The transaction went to Zhou's bank account in Singapore
3. Zhou had an account at MtGox since "sometime in 2011" with the address stevejobs807@gmail.com (the second part of this information may or may not have been previously obtained legitimately, so I'll let it go).
4. Your use of the phrase "closely matches" in your original statement implies that the two numbers (what the thief transferred and what Zhou did) match by more significant digits than just $40k.

Concerns about releasing info relating to money laundering investigations also exist, but are irrelevant at this moment because my accusation was about you violating a privacy agreement, not breaking money laundering laws.

Your defense was followed up with the following:

You gave us implicit consent to make a statement regarding this situation the moment you chose to make the information regarding your dealings with our company public.

There you have it, the AurumXChange privacy policy is that if you ever mention having dealings with them they consider it consent to publish any information they have about your account publicly online.

Account holders better be made aware of this, criticizing them could mean facing serious public backlash if you have admitted you have an account.

Zhou Tong didn't criticize us at any time previous to our statements. Your logic failed, so you resort to manufacturing things to libel.

This is not "our policy". It is the law of the Commonwealth of Dominica, and the law on most, if not all, common-law based countries.

I would like clarification on this law in the Commonwealth of Dominica that says that privacy agreements are null and void if you admit to being a customer of the organization. I have never heard of such a law anywhere and, as presently described, essentially implies that if a customer says "I have to go withdraw some money from XYZ bank today" on an internet forum XYZ bank somehow gains the right to start disclosing private details about its relationship with the customer. To my intuition, this sounds ridiculous. If I am wrong, I would be glad to be enlightened.

[lonelyminer (Peter Šurda)]

I would like to chime in a bit if I may,

I would like clarification on this law in the Commonwealth of Dominica that says that privacy agreements are null and void if you admit to being a customer of the organization. I have never heard of such a law anywhere and, as presently described, essentially implies that if a customer says "I have to go withdraw some money from XYZ bank today" on an internet forum XYZ bank somehow gains the right to start disclosing private details about its relationship with the customer. To my intuition, this sounds ridiculous. If I am wrong, I would be glad to be enlightened.

If I understand that correctly, Roberto argues that by publicly complaining about his account being frozen, Zhou gave consent to publishing the information, and since their privacy policy specifies that the information will not be given without consent, what they did is ok.

I think that's stretching it. I had a similar issue in the past when a customer complained about something not working correctly, I investigated it and then charged them for it. I argued that in my interpretation, the complaint was an order of my services. They weren't very happy about it but in the end paid.

[JoelKatz]

If I understand that correctly, Roberto argues that by publicly complaining about his account being frozen, Zhou gave consent to publishing the information, and since their privacy policy specifies that the information will not be given without consent, what they did is ok.

I don't see how any person could have honestly believed that Zhou had consented to having that information released. Either Zhou didn't know the information or he knew it. In the former case, he can't have consented to releasing it (except very explicitly, which we know never happened). In the latter case, you'd have to believe he was dumb enough to consent to the release of information he knew would make him look guilty in the manner most likely to make him look as guilty as possible.

[rdponticelli]

Please, everybody. Can you move the TOS and/or privacy matters to it's own thread?

You're doing nothing but cluttering with pointless noise a thread labeled [Payout Updates], wasting even more the time and energies of every bitcoinica user.

Thank you, very much.

[Rarity]

... including having our name dragged through the mud by clearly paid shills ...

I've been accused of being a paid shill many times. I've never been paid for shilling anything. I've even had cases where I tried to be as fair as possible to both sides and in exchange, I was accused of being a paid shill by *both* sides. (Which would have been a pretty sweet deal if I could have gotten it. If anyone would like to pay me to shill something, I'm absolutely open to reasonable offers. Now's a really good time -- my jet ski needs new RAVE valves.)

While I agree there are a few people here who look like they might be paid shills or sock puppets, I would strongly caution against saying anyone is "clearly" a paid shill. There is a lot of room for honest disagreement and it's all too easy to think that people who don't share our views must be unreasonable, biased, or worse.

http://www.volokh.com/posts/1169515991.shtml

And, by the way, I would hope that even the people being the most critical of you would agree that you were most likely trying to do what you thought was right, even if they disagree with your decision. I don't think anyone believes you were intentionally trying to trigger a witch hunt.

Joel,

I wasn't referring to you AT ALL with my statement. We might disagree in a few things, but I know your opinions are yours and unbiased.

You have leveled this false and baseless claim at me personally already, so I assume I am included. Don't you think your company looks like hypocritical douchebags when you harass journalists over factual reports while at the same time publishing false accusations you have absolutely zero evidence to support?

These chilling attempts to silence your critics just make it more and more clear the truth is not your primary concern here.  You are fighting a public war against Zhou Tong and anyone who dares to defend him from your witch hunt.

[dopamine]

Still No UPDATE.....

I want my 600 BTC before the price exceeds $30

 

[repentance]

I would like clarification on this law in the Commonwealth of Dominica that says that privacy agreements are null and void if you admit to being a customer of the organization. I have never heard of such a law anywhere and, as presently described, essentially implies that if a customer says "I have to go withdraw some money from XYZ bank today" on an internet forum XYZ bank somehow gains the right to start disclosing private details about its relationship with the customer. To my intuition, this sounds ridiculous. If I am wrong, I would be glad to be enlightened.

With due respect, it is rarely enough to know what the legislation states without also knowing the case law on how that legislation has been interpreted.

As a side note, several people have referred to AML law which was actually repealed by Dominica last year and replaced by several new pieces of legislation aimed at preventing and punishing money laundering.  it's estimated that money laundering accounts for about 2% of Dominica's GDP and there appear to have been very few prosecutions for money laundering in Dominica, despite the previous legislation.  The existence of legislation does not indicate the extent to which it's enforced.

Privacy policies and agreements are not the same as actual privacy laws.  Customers' financial information may still be protected by law even in the absence of a privacy policy or if the privacy policy is legally deficient.  The extent of that protection may well vary greatly by jurisdiction, though.

[Vladimir]

Privacy policies and agreements are not the same as actual privacy laws.  Customers' financial information may still be protected by law even in the absence of a privacy policy or if the privacy policy is legally deficient.  The extent of that protection may well vary greatly by jurisdiction, though.

Aurum Capital Holdings, Incorporated complies with the Data Protection Act 1998. This privacy policy meets the standards and guidelines contained in the Act.

from https://www.aurumxchange.com/content/privacy

I somehow failed to find any references to Dominica's "Data Protection Act 1998". Is there such a thing in existence at all? Google seems to be completely unaware of it, so are all Dominica's government websites that I could find quickly.

If they mean (or simply mindlessly lifted some UK's website policies) UK's Data Protection Act 1998, which I am familiar with. Then, protection afforded by the act to personal data is rather very significant and most of it simply cannot be contracted out.

Moreover, they have failed in their terms to even mention which jurisdiction their website is operating in (there is some mention of Dominica on AML page, but it is simply not enough). As such it is potentially can be argued, that they are subject to either jurisdiction of wherever their customers are located or that of UK due to most likely reference to UK legal acts in their Privacy policy.

Now this may raise a number of very interesting questions. Additionally I could have go over their legalese with a fine comb and likely find so many inconsistencies that it likely would be enough to bury them in most legal proceedings. Should have hired a real lawyer in proper jurisdiction to draft those terms.

[LoupGaroux]

Hello, I'm Vitalik Buterin, the one who wrote the article. The following are my personal opinions, and do not represent an official position of anyone.

snip

I would like clarification on this law in the Commonwealth of Dominica that says that privacy agreements are null and void if you admit to being a customer of the organization. I have never heard of such a law anywhere and, as presently described, essentially implies that if a customer says "I have to go withdraw some money from XYZ bank today" on an internet forum XYZ bank somehow gains the right to start disclosing private details about its relationship with the customer. To my intuition, this sounds ridiculous. If I am wrong, I would be glad to be enlightened.

I am stunned that a writer would not do adequate due diligence in an article passing judgement on the legality of certain issues and make the effort to research the actual laws at issue. But rather than turning to a somewhat contentious internet community for answers, perhaps your follow-up article would be well served by referencing some of the following:

Ministry of Employment, Trade, Industry and Diaspoa Affairs
Address:    4th Floor, Financial Centre, Kennedy Avenue, Roseau
Telephone:    (767) 266 3276
Fax:    (767) 448 5200
E-mail:    foreignaffairs@dominica.gov.dm
Hon. Dr. Collin McIntyre is the Minister.
The Ministry of Employment, Trade, Industry and Diaspora Affairs has responsibility for formulating and implementing Dominica's domestic and external trade policies. This includes export development and promotion, regional integration in CARICOM and the OECS, external trade negotiations, industry development, investment promotion, consumer protection, standards management and meteorology and Diaspora relations.


Ministry of Finance
Address:    5th Floor, Financial Centre, Kennedy Avenue, Roseau
Telephone:    (767) 266 3340
Fax:    (767) 448 0054
E-mail:    finance@dominica.gov.dm
Hon. Roosevelt Skerrit is the Minister.
The Ministry of Finance has responsibility for ensuring that the public finances are maintained in a satisfactory condition and for monitoring fiscal and economic performance. The work of the Ministry is pursued partly through its oversight responsibility for resource allocation in the capital and recurrent budget(s) as implemented in the line Ministries and Departments. In addition, the Ministry of Finance undertakes a variety of functions directly and these may be categorized into two (2) broad areas namely, strategic and administrative or statutory.

Audit Department
Address:    2nd Floor, Treasury Building, Hillsborough Street, Roseau
Telephone:    (767) 266 3304
Fax:    (767) 448 6834
E-mail:    audit@dominica.gov.dm
Mr. Clarence Christian is Director
The main objectives of the Office of the Director of Audit's functions are:
  

•     The detection of fraudulent activities or irregularities as early as possible and promptly report to the relevant authorities including the Ministry of Finance.
•    To determine the reliability of information produced within the various Government Ministries and Departments and the effectiveness of related internal policies and procedures.
•    To assist Permanent Secretaries and Heads of Departments in attaining the most efficient administration of their respective Ministries and Departments through recommendations.
•    To ascertain the extent of protection and safeguarding of the states resources against losses of any kind.

[repentance]

Now this may raise a number of very interesting questions. Additional I could have go over their legalese with a fine comb and likely find so many inconsistencies that it likely would be enough to bury them in most legal proceedings. Should have hired a real lawyer in proper jurisdiction to draft those terms.

Honestly, the published legalese of many Bitcoin services is woefully inadequate and would likely not withstand scrutiny by a court.  The reason why the published legal terms of services like PayPal and Technocash run to tens of pages is because one page, vaguely worded ToS and privacy policies have little real world meaning or enforceability.  People don't read the detailed legal shit before agreeing to it any more than they read and fully understand EULAs.  They're often especially unaware of domestic legislation which may have legal superiority over the civil law agreement to which they're a party.

One reason I'm so against businesses ripping their ToS or privacy policies off other websites is that they're often not competent to judge whether those terms/policies are legally valid or applicable in their own jurisdiction.  It's effectively just mumbo jumbo which lulls users into a false sense of security and may have absolutely no real world relevance.

Unfortunately, many Bitcoin start-ups are launched on a shoe-string budget and don't seem to regard spending money to get the legal stuff in order a priority.  My viewpoint is that if you fail to get the legal stuff in order when starting your business, you have only yourself to blame if it bites you in the ass down the track. 

[Coinoisseur]

Having a laugh at a few of you: "Hey guys Zhou is innocent until proven guilty in a court of law." "AURUMXCHANGE IS GUILTY OF VIOLATING ZHOU'S PRIVACY, GRRRR, GNASHING OF TEETH! EVERYONE LOOK OVER HERE, ZHOU'S PRIVACY IS BEING VIOLATED!"

roflmao over here

This is why I suggest any business include an out that says "in case of customer complaints, any and all factual information not restricted by law will be used to defend the character of this business." Also don't forget to include an anti-class action clause for US residents and a binding arbitration clause.

Haha, oh excuse me still thinking about how people who say "maybe Zhou is a victim of a multi-millionaire Chinese relic collector, we need to keep our minds open. Oh and also not question why he would associate with such an individual in the first place. Nor ask why he would re-use a password on this Relic Hunter's webstore knowing he was a shady character with intimate knowledge of credit card fraud. Nope, just place INNOCENT UNTIL PROVEN GUILTY in place of those questions and also respect his privacy."

[Rarity]

AurumXChange has falsely accused me of being a paid employee of Zhou Tong, so I'm kind of in a unique position where I know for a fact they are more than willing to make false, irresponsible accusations with no evidence, or inadequate evidence.  It's a stretch for me to accept their accusations against others such as Zhou Tong without some official legal backing.  You are free to disagree, of course, but just be happy well funded businesses aren't making up lies to publicly attack you over your opinion.

[Vod]

AurumXChange has falsely accused me of being a paid employee of Zhou Tong, so I'm kind of in a unique position where I know for a fact they are more than willing to make false, irresponsible accusations with no evidence, or inadequate evidence.

Rarity and Maged have falsely accused me of threatening to hurt Zhou Tong, and wanting to hire a hitman, so I'm kind of in a unique position where I know for a fact Rarity and Maged are more than willing to make false, irresponsible accusations with no evidence, or inadequate evidence.

[Rarity]

AurumXChange has falsely accused me of being a paid employee of Zhou Tong, so I'm kind of in a unique position where I know for a fact they are more than willing to make false, irresponsible accusations with no evidence, or inadequate evidence.

Rarity and Maged have falsely accused me of threatening to hurt Zhou Tong, and wanting to hire a hitman, so I'm kind of in a unique position where I know for a fact Rarity and Maged are more than willing to make false, irresponsible accusations with no evidence, or inadequate evidence.

No, I quoted you admitting to stalking Zhou Tong and incriminating yourself while referencing violence and murder towards the subject of your stalking.  And we have a thread for you to be butthurt about being quoted over here, as you know.

https://bitcointalk.org/index.php?topic=97365.40

[repentance]

For fuck's sake, there's already a thread for Rarity/ml derails - stop shitting up this one.

[Coinoisseur]

Derailing seems to be Rarity's main motivation, imo.

[Inedible]

"In retrospect I should have asked to give you a chance to make your case and I would have if I was involved with the publishing of that article."

So to digress, a very serious accusation has been made against our company by a very well known publishing company that admits the matter have not been well researched at the time the accusation has been made, and also admits our company was not given the opportunity to refute these very serious allegations before they went live on your website? How is this not libel, or at the very least gross negligence from your company?

Thank you
Roberto

Is this not the exact same issue we have with you releasing ZT's information?

I think everyone agrees with you that information already in the public domain shouldn't be covered as that had already been published though.

[Inedible]

Just browsed through this, as the last pages are a complete shitstorm discussing minutious details that are completely uninteresting.

It is interesting. It's at the very heart of the whole controversy.

If the information hadn't been released or if ZT hadn't been incriminated BEFORE he had a chance to at least reply to the accusations then we wouldn't be in this situation.

None of us would know whether ZT was the main suspect (well there would be theories on the matter but nothing conclusive as AX wouldn't have substantiated it) until a full investigation had been done.

At that point, ZT would have either been proved a liar or the investigation would have determined that the money really did come from a friend.

But the point is that there's no point arguing over minute details while millions worth of USD is missing.

There is nothing else to do whilst the investigation is ongoing. I'm sure the AML investigation is going as fast as it can because until it's resolved, we won't find out if ZT is telling the truth or not.

This is really the whole problem here. I don't know if ZT is telling the truth. You don't know if he's telling the truth. The investigation will though. Those that say they KNOW he's lying already - I can't see how they could possibly know that. I'm not saying he isn't but how could I conclusively decide that with the information I have?

All logic dictates that when Zhou Tong at the same time of the hack tries to withdraw an amount equal to that stolen, and an e-mail address associated to him is used along with the 'hack', then it's all reason to be suspicious.

How can logic determine if ZT is lying or not? Doesn't this also mean you believe he's guilty? How have you proved that his friend doesn't exist? Again, I'm not saying you're wrong but how did you come to that conclusion?

I would've acted exactly the same way as aurumexchange in such a case

I would have done everything AX did except I would withold all information until an investigation had been done. That's the way it's meant to be done.

, and if anyone thought I acted illegally or unethical, then bring the lawsuits on, I applaud aurumxchange for hos he acted in this case.

Lawsuits can still be brought because the information effectively painted ZT as guilty without giving him an opportunity to reply to the accusations. See how the news media goes about news items - they give both parties the opportunity to address the matter and they publish both sides if it's to be published at all.

How would you feel if someone stole a large amount of money from you ?

This implies he's already guilty. Or are you literally just wanting to know how he would feel in that scenario?

[Inedible]

The way the forum reacted was kind of predictable, but it's not something AurumXchange can do much about

Shouldn't ZT have been given an opportunity to respond to the accusations first? Without that opportunity to respond, don't you think AX ought to be held responsible for the result of publishing the information that was published?

Imagine how this might have turned out if ZT had been given an opportunity to respond to the accusations? Wouldn't AX have used AML laws to determine if he was telling the truth or not before publishing? And once that had been determined, I still think publishing would be a bad thing to do but at least the outcry would have been just.