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

[genjix]

Zhoutong please tell Genjix (Or perhaps Genjix is reading this himself) to post _at least_ daily:

I know as much as Zhoutong really. I try not to post unless I'm sure what I'm saying is correct or meaningful.

[1713919548]

1713919548

[1713919548]

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[disclaimer201]

Quick recap: Genjix can't do anything or say anything, Zhoutong is still employed and has access to our money but can't touch it. The investor said it's up to Bitcoinica consultancy to handle the refunds. Noone else has taken responsibilty or given any meaningful information. Zhou and Genjix - WHO THE FUCK IS RESPONSIBLE for the payouts??

Or are you all planning an extended trip to the Bahamas?!

[Mushoz]

Zhoutong please tell Genjix (Or perhaps Genjix is reading this himself) to post _at least_ daily:

I know as much as Zhoutong really. I try not to post unless I'm sure what I'm saying is correct or meaningful.

Then who does know more?
And why can't there be approximations being given to us?

We want to see _progress_

[repentance]

I know as much as Zhoutong really.

That's pretty disturbing.  While zhoutang not being privy to everything that is going on behind the scenes is understandable, it's hard to think of any positive reasons why you would be excluded from the loop.  

Who the hell does know what is happening and when are they going to announce how user funds will be returned?  This appalling lack of communication isn't just damaging the image of Bitcoinica - it's raising serious doubts about the competence of "The Intersango Guys" in general and tarnishing the reputations of their other business ventures.

[Mushoz]

I know as much as Zhoutong really.

That's pretty disturbing.  While zhoutang not being privy to everything that is going on behind the scenes is understandable, it's hard to think of any positive reasons why you would be excluded from the loop.  

Who the hell does know what is happening and when are they going to announce how user funds will be returned?  This appalling lack of communication isn't just damaging the image of Bitcoinica - it's raising serious doubts about the competence of "The Intersango Guys" in general and tarnishing the reputations of their other business ventures.

+1000

This situation is ridiculous. Genjix, can we get a name of someone who does know more? And can you let him post here, or let him inform you so you can post his information here?

[Matthew N. Wright]

I think it is time to bring some sort of accountability to the bitcoin world. It is not even about the money at this point, and those familiar with our company know we have the deep pockets and the infrastructure to make it happen.

Am I the only one who notices the irony here that it took 3 years for Bitcoin to crawl back to governments to handle their issues for them?

We have a large sum in Bitcoinica as well, and as such, I am entitled to an opinion here. I believe however ridiculous this situation looks, these guys are here to stay. Give them time and stop barking. Call in the big dogs when they run away, not when they're working on it. As for all the people claiming they can't get ahold of anyone, I have yet to see anyone saying they've called someone. It's always emails, and emails to a server that has been hacked. 

[Raoul Duke]

Am I the only one who notices the irony here that it took 3 years for Bitcoin to crawl back to governments to handle their issues for them?

What does Bitcoin have to do with the problems between a company and its customers?

[Matthew N. Wright]

Am I the only one who notices the irony here that it took 3 years for Bitcoin to crawl back to governments to handle their issues for them?

What does Bitcoin have to do with the problems between a company and its customers?

I'm playing Devi's advocate if you hadn't noticed. It doesn't matter what reality is, if lawsuits are made, this will be our new slogan to the unwashed masses:

"Bitcoin: When the going gets tough, the tough go back on their principles of decentralization."

[Raoul Duke]

Am I the only one who notices the irony here that it took 3 years for Bitcoin to crawl back to governments to handle their issues for them?

What does Bitcoin have to do with the problems between a company and its customers?

I'm playing Devi's advocate if you hadn't noticed. It doesn't matter what reality is, if lawsuits are made, this will be our new slogan to the unwashed masses:

"Bitcoin: When the going gets tough, the tough go back on every principle they believe in."

Sorry, I still don't grasp the Bitcoin involvement in it.

[Vladimir]

Matthew is just taunting all the uber libertarians here, I bet.

[disclaimer201]

Unless their legal advisor explicitly told them not to give any further information on the forum nothing would speak against giving daily updates. Everybody would have been much more relaxed and lawsuits might have been prevented.

[Mushoz]

Unless their legal advisor explicitly told them not to give any further information on the forum nothing would speak against giving daily updates. Everybody would have been much more relaxed and lawsuits might have been prevented.

Exactly! They are just making things worse for themselves.

[Raoul Duke]

Matthew is just taunting all the uber libertarians here, I bet.

Bitcoinica were the ones who signed up to play by the Govts rules... Since they are hiding behind legal BS and not being open about this Matthew is surly just trolling.

Couldn't have said it better myself.
Add to it that Bitcoinica's main currency was USD and not Bitcoin and it's uber trolling.

[Vladimir]

Dear Bitcoinica LP, please stop trying to bamboozle us with waffle and start paying out. Nobody here really wants to feed damn lawyers.

Some accounts like mine for example have not had any significant transactions for many weeks. What is the problem with verifying those? Do you have any backups at all, even if two month old?

[rjk]

I have 6,325 BTC and 53,244.35 USD in bitcoinica. I will join forces with AurumXchange. I want MTGOX CODES for each TODAY or I will prosecute to the full extent of the law.

Maria.

Just exchanged 3,000 BTC. Everything is working smooth now. Makes me wonder, Why MTGOX does not offer instant LR payouts? Great Job www.CoinExchanger.com

Maria.

Good luck.

PS. I can't seem to locate your claim. Where should they send the money to?

Looks like Zhoutong caught himself another Coinexchanger shill. Great work!

[realnowhereman]

"Know as much as Zhou"?

In that case, why hasn't there been a daily message from Genjix saying "number of accounts verified: 35%"?

What exactly is this secret information that isn't known by Genjix?  As the general partner shouldn't Bitcoin Consultancy know everything?  Even if there is stuff you don't know: announce that.  "We are currently trying to reconcile X with Y".  "We are working on a policy for liquidations".

Even posting what it is you don't know, or haven't decided would be some encouragement to us all that you are not packing your bags and buying new passports.  Communication of unknowns is still communication.

It's pretty easy, Genjix, what are you working on today?  Right now.  What is Patrick working on?  What is Donald working on?  You are all hard working guys, and can't be just sitting around drinking coffee.  What exactly is it that you've spent the last four weeks doing?  Even if the answer isn't "writing cheques to repay you", just tell us.  It's not like you can be "incorrect" or "inaccurate" about what you're doing.

[Raoul Duke]

I have 6,325 BTC and 53,244.35 USD in bitcoinica. I will join forces with AurumXchange. I want MTGOX CODES for each TODAY or I will prosecute to the full extent of the law.

Maria.

Just exchanged 3,000 BTC. Everything is working smooth now. Makes me wonder, Why MTGOX does not offer instant LR payouts? Great Job www.CoinExchanger.com

Maria.

Good luck.

PS. I can't seem to locate your claim. Where should they send the money to?

Looks like Zhoutong caught himself another Coinexchanger shill. Great work!

Incredible as it may seem I didn't saw even 1 person complaining that coinexchanger kept their money, shills or no shills.

Can you say the same about Bitcoinica?

[Maria]

I have 6,325 BTC and 53,244.35 USD in bitcoinica. I will join forces with AurumXchange. I want MTGOX CODES for each TODAY or I will prosecute to the full extent of the law.

Maria.

Just exchanged 3,000 BTC. Everything is working smooth now. Makes me wonder, Why MTGOX does not offer instant LR payouts? Great Job www.CoinExchanger.com

Maria.

Good luck.

PS. I can't seem to locate your claim. Where should they send the money to?

Zhou Thank you for looking into it personally and for responding so fast. You can send me the MTGOX CODES in a PM this way the admins can confirm the payment. Again thank you Zhou it makes me happy to hear that the big accounts will be paid out first!!

Thank you Zhou Tong!! I will keep the community posted.

Maria.

PS: This is the last email i received from bitcoinca.

Bitcoinica's Recent Data Errors
September 20
 
 
What happened?

We have been constantly upgrading our algorithm to provide better services and cheaper rates to our customers. However, despite the intensive testing that has done internally, sometimes the algorithm may break under certain market conditions (such as a spike or crash).

Therefore, we have also implemented a data integrity checker, which verifies the consistency and integrity of all important financial data of our customers.

Today, our data integrity checker has reported an abnormally high percentage of errors. And we have also received service requests from a few customers regarding this issue. Common problems are: duplicated orders, extra orders or positions and unupdated account balance after liquidation.
 
Why it happened?

Bitcoinica has a scaling issue about two days ago. Since our site is expanding so fast, certain types of processing jobs are slower and slower due to the huge increase in database size. We have added more processes ("dynos" in Heroku term) into the application stack, and the extra concurrency seems to solve the problem.

After that, we have found that it's possible to have two concurrent processes processing the same order or user at the same time. This has caused some conflicts, which result in duplication of some data entries. Some users' account balances haven't been updated correctly because of this.

We have quickly added database locking to every single transaction that involves money. Database locking ensures and strictly requires concurrent processes to process data entries exclusively.

However, some of our database locking was not correctly implemented. Concurrency problems still continued. Today, during the spike in BTCUSD, increased number of orders have added extra probability of processing the same order at the same time. And our system was kept busy with a long queue of tasks.
 
Is it corrected?

We have an automated system to correct these errors. In order to protect our customers, and fulfill our promise of "bear the cost of financial losses that were not caused by our customers", we have implemented this policy:

If you were made worse off (less profit or more loss than expected) because of the errors, all errors have been corrected for you.

If you were made better off (more profit or less loss than expected) because of the errors, we bear all the associated cost and your account remained unchanged.

In the extreme cases (such as $1,000 difference in adjustment), we have reviewed on case-by-case basis and taken manual actions respectively.

We hope our resolution for this recent issue is much more professional than simply reverse the trades.
 
What should I do next?

You should check your account, and make sure that all the data is correct.

If there are still some incorrect data entries, please send an email to support@bitcoinica.com, including the following information:

- Your username
- What is incorrect
- What should be the correct value

We will verify your information as soon as possible.

If you were made better off because of the errors, or you simply want to share part of your profit with us to help Bitcoinica grow, you can donate to Bitcoinica anonymously by sending any amount of Bitcoins to this address:

196D4C3f2MgFrjfRoAh4mkQKfALBvPEnB1

At this moment, our finances are healthy and we can absolutely afford to compensate for this issue. More importantly, we will keep Bitcoinica continued and more exciting features will be announced soon.
 
The Bug Bounty Program

We're introducing the Bug Bounty Program. If you have found any bugs, security loopholes or irregularities in our technical systems, you can report them to us and get the chance to win bounties. This is our offering:

Security-related or critical loopholes: 5 - 100 BTC each

Operational bugs: 1 - 25 BTC each

User experience issues: 1 - 25 BTC each

Please note that only the first person that reports a particular issue can win the bounty. Also, "potential improvements" are not considered as bugs as long as the features are fairly working.

We will determine the amount of the bounties based on the urgency and importance of the issue.

Please send any issues you have found to support@bitcoinica.com, including detailed instructions on how to reproduce the issue.
 
Thank you!

Thank you for your support! We hope that Bitcoinica can become your favorite trading platform for Bitcoins.

More features are coming up soon. We will continue using newsletters to communicate with you all.

Again, thank you!

[genjix]

It's pretty easy, Genjix, what are you working on today?  Right now.  What is Patrick working on?  What is Donald working on?  You are all hard working guys, and can't be just sitting around drinking coffee.  What exactly is it that you've spent the last four weeks doing?  Even if the answer isn't "writing cheques to repay you", just tell us.  It's not like you can be "incorrect" or "inaccurate" about what you're doing.

Until Saturday (or so), I was working on helping process the claims. Since then I've been working on libbitcoin and Electrum.

Now the thing is that for payments to be processed, we need legal authorisation from the person in charge. Tihan denies being in charge, which means his parent company (Core Credit) has to authorise the payments. However Tihan is saying we don't need that.

The problem is that Bitcoinica Consultancy only begun the process of being formed when the attack happened. The paper work was not completed and we weren't acting as GP. Tihan is asking us to finish completing the formation of Bitcoinica Consultancy first, while we are asking for legal authorisation to conduct payments on their behalf.

But I think the issue may be resolved now although I'm not sure of the specifics (I'm not a lawyer). Hopefully someone acting on proper legal representation can respond.

Anyway I'm going to avoid posting now, since the technical problems have been resolved, and the remaining things are legal. I've probably made a bunch of mistakes or inaccuracies above as I don't have a complete understanding of this and don't have a legal background.

[genjix]

Some accounts like mine for example have not had any significant transactions for many weeks. What is the problem with verifying those? Do you have any backups at all, even if two month old?

There were no backups.