Class action Litigation vs. Bitcoinica Consultancy LTD & Intersango LTD

[John (John K.)]

Duplicated to pastebin: http://pastebin.com/Ya6iN8RT
 Edit: included the documents.

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[BitcoinBug]

I appreciate the transparency, even if it was removed after (probably by request).

[Herodes]

I appreciate the transparency, even if it was removed after (probably by request).

I got a tip, and it's still available in full as posted previously on bitcointalk.org:
https://anonfiles.com/file/13fa1d766f3df9eb6485aa900ae6dd0e

[John (John K.)]

I appreciate the transparency, even if it was removed after (probably by request).

And thanks to Herodes, the complete version is available at http://pastebin.com/Ya6iN8RT (including the second post with emails)

[BadBear]

Glad to see they got saved, interesting reading. Glad to see some things clarified.

I thought the emails were published on this thread? I did a refresh and the emails were gone. 

Amir was almost certainly breaching the NDA by posting them.  It's possible that they were removed for legal reasons. Wish I'd scxreen-capped them now, not to post them but to digest them more fully - I only did a quick read through of the most important points.

The question is did genjix remove them or a mod ?

That leads to which mod would do so and why

Must have been Genjix, I certainly wouldn't and I can't imagine any of the others would, there's no justification for that.

[repentance]

Amir, you did a brave thing and I think many people feel better for having some clarity about what was going on behind the scenes from the time of the Linode hack onwards.  I hope your associates aren't being too harsh on you because I think many people just wanted to know what the hell had been going on rather than being left to speculate.  People had already guessed a lot of this stuff anyway, for the most part it was only specific details which were lacking.  Things make a lot more sense with some of those details filled in and some of the "but why can't they do X" questions have been answered.  People might not like those answers, but they now have them.

[Spekulatius]

If genjix posted those mails, can they be trusted?

[zhoutong]

If genjix posted those mails, can they be trusted?

I have roughly read the posts and they are consistent with my understanding of the events.

[repentance]

If genjix posted those mails, can they be trusted?

They fit with what was being posted in the threads here as stuff unfolded following the Rackspace intrusion.  They also confirm a lot of things which people had assumed which had never been explicitly verified.  For me, the documents confirm that they may not have realised the magnitude of what they were taking on - I said in another thread that a month wasn't sufficient time to perform adequate due diligence and I wonder if they did really, fully, understand what they were getting into.

Someone posted a little while back that Amir, Patrick and Donald had been fed a shit sandwich.  Having seen the dox, I'm not sure that I disagree with that statement.

[Ichthyo]

If genjix posted those mails, can they be trusted?

Obviously we can't tell for sure.

IMHO it would be verry challenging even to compile such a bunch of quoted emails without
making serious mistakes and obvious contradictions. Add to this the fact that those informations
fit perfectly with the partial knowledge we inferred together on those forum threads.
It fill in just some missing parts.

Thus I'm rather geared towards trusting those mails

[stochastic]

I have been using UserXXX for some time, and it seems that they are always
selling Bitcoins at above-market prices. For example:

The Mt. Gox price is about $5.12 now, and they are buying at A$5.07 (=
$5.22 USD).

I almost emptied my Bitcoinica balance dealing with them. I still have
about $20,000 remaining in Citibank Singapore (from previous wire
deposits), I think it will be great if I can send the money to Bitcoinica's
bank account, or whatever to reduce our Mt. Gox USD risk.

The scalability is actually not bad. I can sell between $2000 to $4000
worth of Bitcoins as frequently as twice a week.

I want to deposit $20,000 on Bitcoinica, LOL...


Best Regards,
Zhou Tong

Is Zhou saying he used insider and company information of their users to personally profit from them?

[repentance]

I have been using UserXXX for some time, and it seems that they are always
selling Bitcoins at above-market prices. For example:

The Mt. Gox price is about $5.12 now, and they are buying at A$5.07 (=
$5.22 USD).

I almost emptied my Bitcoinica balance dealing with them. I still have
about $20,000 remaining in Citibank Singapore (from previous wire
deposits), I think it will be great if I can send the money to Bitcoinica's
bank account, or whatever to reduce our Mt. Gox USD risk.

The scalability is actually not bad. I can sell between $2000 to $4000
worth of Bitcoins as frequently as twice a week.

I want to deposit $20,000 on Bitcoinica, LOL...


Best Regards,
Zhou Tong

Is Zhou saying he used insider and company information of their users to personally profit from them?

That's not the way I'm reading it.  I'm reading it as him putting his personal funds into Bitcoinica so the LP can use it to reduce its MtGox/USD risk.  I read the last line as a joke (the funny part being him depositing funds with the business he used to own).

[Vladimir]

Before wasting money on damn lawyers, it might be  a good idea to compile the claims and send a letter to Bitcoinica GP with a clear explanation of your position, what money are claimed and what it would take to prevent any legal action (repayment of claims presumably).

I, for example, would definitely first seek an amicable settlement of the matter and only then get serious about legal action.

[Coinoisseur]

With the new admitted loss of claim funds the odds of getting any non-lawyer driven satisfactory conclusion is slim to none. Continuing to spend money of an insolvent company is a very poor decision, really they should be voluntarily contacting the relevant NZ bodies to wind down the company.

[lonelyminer (Peter Šurda)]

Before wasting money on damn lawyers, it might be  a good idea to compile the claims and send a letter to Bitcoinica GP with a clear explanation of your position, what money are claimed and what it would take to prevent any legal action (repayment of claims presumably).

I, for example, would definitely first seek an amicable settlement of the matter and only then get serious about legal action.

Vladimir,

this is a reasonable advice, however it appears that someone screwed up the legal framework for Bitcoinica (in addition to the well publicised security problems). The information available is conflicting, and the records at the New Zealand company registry appear to have not been updated yet to reflect the takeover (which might end up being even more damaging to the people involved). Don't worry though, we are investigating everything.

[epetroel]

Before wasting money on damn lawyers, it might be  a good idea to compile the claims and send a letter to Bitcoinica GP with a clear explanation of your position, what money are claimed and what it would take to prevent any legal action (repayment of claims presumably).

I, for example, would definitely first seek an amicable settlement of the matter and only then get serious about legal action.

+1

From my cursory reading of the pastebin, it seems that everyone was acting in good faith to try to get money back to customers in a reasonable way.  Seems the biggest problem was that there was simply no leadership so the whole claims process turned into a "decision by committee" disaster.

[Vladimir]

Before wasting money on damn lawyers, it might be  a good idea to compile the claims and send a letter to Bitcoinica GP with a clear explanation of your position, what money are claimed and what it would take to prevent any legal action (repayment of claims presumably).

I, for example, would definitely first seek an amicable settlement of the matter and only then get serious about legal action.

Vladimir,

this is a reasonable advice, however it appears that someone screwed up the legal framework for Bitcoinica (in addition to the well publicised security problems). The information available is conflicting, and the records at the New Zealand company registry appear to have not been updated yet to reflect the takeover (which might end up being even more damaging to the people involved). Don't worry though, we are investigating everything.

All the more reasons they have to play nice.

[repentance]

From my cursory reading of the pastebin, it seems that everyone was acting in good faith to try to get money back to customers in a reasonable way.  Seems the biggest problem was that there was simply no leadership so the whole claims process turned into a "decision by committee" disaster.

Which was then compounded by the MtGox intrusion after which everyone pretty much didn't know what to do.  And that's about where things still stand today.

[guruvan]

Before wasting money on damn lawyers, it might be  a good idea to compile the claims and send a letter to Bitcoinica GP with a clear explanation of your position, what money are claimed and what it would take to prevent any legal action (repayment of claims presumably).

I, for example, would definitely first seek an amicable settlement of the matter and only then get serious about legal action.

+1

From my cursory reading of the pastebin, it seems that everyone was acting in good faith to try to get money back to customers in a reasonable way.  Seems the biggest problem was that there was simply no leadership so the whole claims process turned into a "decision by committee" disaster.

"good faith" might be a significant overstatement. There are comments to the effect that Tihan was preying on the BC crew - and there are comments to suggest that someone was purposefully delaying return of customer funds.

And then someone stole another big pile of funds.

And then more people walked away.

Just sayin'

[blakdawg]

With the new admitted loss of claim funds the odds of getting any non-lawyer driven satisfactory conclusion is slim to none. Continuing to spend money of an insolvent company is a very poor decision, really they should be voluntarily contacting the relevant NZ bodies to wind down the company.

+1

Where some person or entity may have obligations to tens or hundreds or thousands of people, it's unlikely that it's in their best interest to settle those obligations/disputes one at a time; and it's also probably not in the best interests of the creditors, except for the people who get paid first.

That's why we have the bankruptcy process - it provides an orderly resolution of all of the outstanding issues simultaneously, and creditors are repaid in a predictable fashion determined in advance, so it reduces the opportunity for pushy people to jump ahead in line and get more money, or get paid faster.