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Author Topic: luke-jr is a scammer - he renegged on a bitcoin futures contract  (Read 8376 times)
NghtRppr
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May 18, 2011, 06:45:15 AM
 #21

Facts:
  • On April 13, the price fluxuated between 0.92 and 0.93 USD.
  • Significant portions of the log are omitted in the paste above
  • After fumbling around with technical details (escrow topics, etc), we decided to avoid the complexity and:
  • We agreed that I would purchase 25 BTC at the price of 1.15 USD from him on April 13th, with our word at stake
  • He never showed on April 13, up until today, May 17
  • I am still willing to buy 25 BTC at the price of 1.15 USD
  • I was never under any obligation to sell the 25 BTC back, at any time
  • Had he showed on April 13th, I would have completed the sale then, and held onto the 25 BTC until I could sell it at 8.90 USD, making a significant profit
  • (edit-added) blarzong last appeared on IRC on March 15th

It is in fact "ruhvix" who is the scammer at this point.

You are technically right that you are only obligated to buy what you said you would buy but that's not really keeping with the spirit of the wager. This doesn't seem to be a standard situation where exercising an option in the main concern.

If the price was $0.93 and you said you would buy 25 BTC at $1.15 then that would be a profit of $5.50 for him. This can still be settled by doing some other trade where you buy BTC at a loss so that he makes $5.50. There's no promise that BTC would have went up so offering to buy 25 BTC at $1.15 right now is a non sequitur, as well as the mention of the time that has elapsed. If anything, that's to your benefit since you had more time to come up with the money. It seems odd to complain about having to pay your debt later rather than sooner. I wish my creditors would treat me like that.
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ruhvix
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May 18, 2011, 07:38:21 AM
 #22

In the real world, nearly all contract are settled with cash based on the trading position at the expiration time. You can read about it here:

http://www.investopedia.com/terms/c/cashsettlement.asp


Cash settlement only applies when you are involved in two contracts, one to buy and one to sell. Luke-Jr was only involved on the buying side, thus no cash settlement applies.  Please quit whining, you broke the contract.

You obviously didn't read the link you're replying to. Anyone can check a major market like Nasdaq:

"Description: U.S. dollar-settled Australian dollar currency futures are quoted in terms of U.S. dollars per unit of the underlying currency (Australian dollar)."

"The cash settlement amount on the Final Settlement Date shall be the final mark to market amount against the final settlement price multiplied by 10,000."

"Final Settlement Price: The Final Settlement Price for the foreign currency futures contracts shall be the spot rate at 12:00:00 Eastern Time (noon) on the Last trading Day."


The last trading day in our trade was obviously before 4/13 (since the deal expired at 4/13 midnight). The settlement price is therefore $0.86.

http://www.nasdaqtrader.com/Micro.aspx?id=PBOTproducts

Luke Dashjr welched on a bet with clearly defined terms, and no amount of weaseling and wannabe-lawyering will get him out of paying up. Trying to re-write the contract by selectively quoting various fragments to make it seem as if he only had to pay if we managed to find each other on IRC is silly.

Obviously the contract like any other futures contract, and both parties agreed it was a bet on the future value of btc, not some bogus deal where luke dashjr decides if and when he will pay up.

His failure to pay obviously has clearly defined damages. There is no doubt that the terms were clear, he confirmed them in a 4-page public log, and he reneged when it became clear his bet was a losing one. His excuses here have ranged from trying to haggle over the settlement price, to claiming too much time has gone by (4 weeks omg!!) so his debt should be extinguished, and that I don't spend a lot of time on IRC. All of which are irrelevant.

In the end, the only fair thing is to settle the trade using the same standards every other market uses for forwards, which is exactly what we agreed to. Luke Dashjr wants special treatment because he lost.

02:23    luke-jr    if BTC goes to $1.80, you owe me 14.13043478 BTC; if BTC drops to $0.50, I owe you 14.13043478 BTC

That was his own definition of how the trade would be concluded with concrete examples (confirming that it's a standard futures contract) which is in the contract.

He admits he will "owe" me if btc is *below* his strike price. There's no wiggle room to rewrite the terms now, though trolls and scammers may be desperate to try.
kjhd456
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May 18, 2011, 10:25:37 AM
 #23

since the contract is so distorted, I doubt it could be called a futures contract. In fact, you'll probably never gain any fame for this miserable half-contract. The terms are so arbitrary on both sides that I could easily have used this to gain lots and lots of bitcoins.

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ruhvix
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May 18, 2011, 03:55:08 PM
 #24

since the contract is so distorted, I doubt it could be called a futures contract. In fact, you'll probably never gain any fame for this miserable half-contract. The terms are so arbitrary on both sides that I could easily have used this to gain lots and lots of bitcoins.

It's not distorted at all - his refusal to pay what he owes doesn't suddenly throw everything into disarray. There's in fact 4 pages of documentation proving in detail that the terms were clear to everyone. Contract law is clear - he owes and is a deadbeat.

I would have no problem letting him take as much time as he wanted to pay the ~1 btc, or using any payment method, or paying in alpaca socks. Doesn't matter to me.

I've saved (some of) the best quotes for last:

02:30    luke-jr    maybe we need a trusted 3rd party to hold the escrows and evaluate the market

Why on earth would we need a trusted party to "evaluate the market" unless the final market price determined the winner of the bet?

That would make no sense at all under his current claim that this whole thing was somehow independent of the market price. You only need to an independent party to evaluate the market when you're settling based on the actual market value at the end of the contract (there's no other reason) - which is how the vast majority of deals are done - something he now refuses to do.

Rather than contradicting the previous 4 pages, his last statement that he will buy 25 @ $1.15 on April 13, simply confirms the discussed terms - that he will take the buy/long position and settle based on the April 13 price. It is entirely consistent with the many previous statements. Rather than throw out the previous 4 pages to make it seem like the delivery method we discussed somehow disappeared, it merely confirms it.

(As an aside, the problem with escrow is that there's no way to escrow usd, so there's no way to determine the size of the escrow on the buyer's side, unless you put a limit on the gains).
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May 18, 2011, 04:08:41 PM
 #25

What if I just bought the BTC in his name? Would that help clear anything up? I do owe him a favor Grin

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ruhvix
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May 18, 2011, 04:19:38 PM
 #26

What if I just bought the BTC in his name? Would that help clear anything up? I do owe him a favor Grin

Fine with me I guess...
lulzplzkthx
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May 18, 2011, 04:30:03 PM
 #27

What if I just bought the BTC in his name? Would that help clear anything up? I do owe him a favor Grin
Wait, so would you be buying it for $1.15/BTC? Heh, I'll do it too.

ataranlen
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May 18, 2011, 04:31:03 PM
 #28

What if I just bought the BTC in his name? Would that help clear anything up? I do owe him a favor Grin
Wait, so would you be buying it for $1.15/BTC? Heh, I'll do it too.

Not sure, waiting on a response to a PM to work out the details. I think I just need to pay the ~$7 or so to clear Luke's name.

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Luke-Jr
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May 18, 2011, 05:38:12 PM
 #29

Not sure, waiting on a response to a PM to work out the details. I think I just need to pay the ~$7 or so to clear Luke's name.
Please don't feed the troll. It's pretty clear that nobody buys his nonsensical claims.

ruhvix
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May 18, 2011, 06:47:57 PM
 #30

Not sure, waiting on a response to a PM to work out the details. I think I just need to pay the ~$7 or so to clear Luke's name.
Please don't feed the troll. It's pretty clear that nobody buys his nonsensical claims.

That is not a defense. All the quotes are in the public record. You made the deal, and now you reneged.

I'm charging you 7% interest on your debt starting today. The longer you refuse to pay, the greater your debt will be.

I find it hilarious you are now attempting to run a mining pool called "Eligius" (https://en.bitcoin.it/wiki/Eligius). That looks like another crazy Luke Dashjr scam.

A pool depends entirely on trusting the admin to accurately report the amount of work produced by the pool and distribute payouts fairly. Why would anyone trust you to deal fairly when you won't live up to your obligations?

Given that your pool ignores transactions that most other miners accept and the complicated payout / fee structure you've created, it looks a way to scam miners into doing free work for your own benefit.

00:15    luke-jr    I certainly expect that it will go near $1.25
00:15    luke-jr    just not over
00:15    blarzong    luke-jr: i will take that bet
00:17    luke-jr    blarzong: make it $1.15 and I might bite
00:17    blarzong    ok $1.15


When you make a deal with luke dashjr, he won't pay what he owes. Plain and simple.
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May 18, 2011, 07:45:12 PM
 #31

Im just glad Luke never mentioned tonal once in that entire conversation.

 Lips sealed
LOL

lulzplzkthx
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May 18, 2011, 08:09:36 PM
 #32

Im just glad Luke never mentioned tonal once in that entire conversation.

 Lips sealed
LOL
Actually, now that you mention it... maybe he just wanted to buy 25 TONAL bitcoins, and that's why it got all confusing.

Silly luke-jr!

ribuck
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May 18, 2011, 08:59:26 PM
 #33

... I think I just need to pay the ~$7 or so to clear Luke's name.
Luke's name and reputation are clear already.
runcible2011
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May 18, 2011, 09:17:00 PM
 #34

ruhvix,

Thanks for this thread. It's quite an education in a few ways. Your reasoned and thoughtful responses tell the important part of the story. I'd trade with you anytime.
ruhvix
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May 18, 2011, 09:28:57 PM
 #35

... I think I just need to pay the ~$7 or so to clear Luke's name.
Luke's name and reputation are clear already.

clear as the mud on my boots...
ruhvix
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May 18, 2011, 09:30:23 PM
 #36

ruhvix,

Thanks for this thread. It's quite an education in a few ways. Your reasoned and thoughtful responses tell the important part of the story. I'd trade with you anytime.

Thanks! I hope to get more into the futures trading once a good exchange is setup...
cuddlefish
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May 18, 2011, 09:30:42 PM
 #37

... I think I just need to pay the ~$7 or so to clear Luke's name.
Luke's name and reputation are clear already.

clear as the mud on my boots...

how'd you get on your boots?

ruhvix
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May 18, 2011, 09:38:06 PM
 #38

that's not "clear" nate... that's opaque.


... I think I just need to pay the ~$7 or so to clear Luke's name.
Luke's name and reputation are clear already.

clear as the mud on my boots...


how'd you get
ruhvix
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May 18, 2011, 10:04:23 PM
 #39

!!!!! UPDATE !!!!!

Someone paid off luke-jr's debt. I'm not sure who it was, but whoever did it, thank you Smiley

Of course the rights to luke-jr's debt (including interest) are transferred to whoever settled the trade.

Feel free to PM me so I can give you a favorable rating and a mention in the Honest Traders thread.
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