[ANN] Bitcoinica Consultancy abandons customers. Bitcoinica to enter Liquidation

[tseale]

It is August 2012 and 80 days have passed since Bitcoinica was taken offline following the Rackspace hack. Many of you have followed developments since that time with interest and frustration. The company's investors and I have also been extremely disappointed.

Donald Norman, Patrick Strateman and Amir Taaki accepted responsibility for Bitcoinica on April 24 as Bitcoinica Consultancy and have retained the -only- legal authority to act on behalf of the company. At this time it appears they have abandoned their legal duty.

They now refuse to reply to communication, refuse to acknowledge their responsibility, refuse to resign voluntarily, and refuse to act. In particular they have refused to do anything to recover stolen funds, even where the required action is as simple as providing a payment address. This is now hindering the efforts of others to minimize loss to Bitcoinica's customers.

Clearly, this must end.

Acting in its capacity as creditor to Bitcoinica LP, the Wendon Group investment fund will appoint a receiver under New Zealand law. This has been an option of last resort which is now unavoidable. Under receivership, a licensed and insured specialist will replace the Consultancy as the designated authority. Upon satisfaction of secured creditor interests, the company will proceed to liquidation in which remaining funds are distributed. Without Consultancy cooperation, this is the only ready way forward.

Wendon Group intends to donate any funds it obtains via receivership in favor of Bitcoinica customers. Complete liquidation will likely take place over a matter of months.

While this is not the outcome any hoped for, it is certainly an improvement over the deadlock resulting from Donald, Patrick and Amir's untimely abandonment.

Many have suffered because of the Bitcoinica disaster. Everyone is right to be upset. Since no one in charge has seen fit to offer an apology, let it be me instead. To all those affected, I'm very sorry.


Tihan Seale

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[Mike Jones]

What is your position/job/role in this affair, Mr. Seale?

[BitBuster]

Time to rigorously boycott Intersango and the "Bitcoin Conference" then?


BB.

[kiba]

So you didn't get fired?

I hope this incident taught you not to store customers fund in a hot wallet and use 2 factor authentication.

[dancingnancy]

So what does this mean exactly?  What about the funds transferred to the lawyer?

[Coinabul]

Will customers get a payout, or will the funds being donated in favor of the customers go to some other organization, such as the Bitcoin foundation?

[disclaimer201]

Time to rigorously boycott Intersango and the "Bitcoin Conference" then?


BB.

That's a no-brainer. Of course you abandon both. Community has already split because of this ordeal.

_______________________________________________________________________________ ___________________
I am owed 44.21 Bitcoins by Bitcoinica. Please compensate or donate here: 1ET2ps7BRrZnDeq7bVNc8bS9ZmgN8DxUXy

Thank you.

[tseale]

What is your position in this affair, Mr. Seale?

I am an investment scout for Wendon Group. Part of my role is to monitor past investments.

I facilitated Bitcoinica Consultancy's take-over of Bitcoinica and made my knowledge of the business available to them.

Bitcoinica Consultancy had exclusive responsibility for Bitcoinica's daily operations in all respects, including hot wallet management.

[apetersson]

It would be very sad if that happens. The Conference should not be about Bitcoinica, Intersango, or any other particular player. It is about bringing the community together, listening to great speakers and hear about new ideas. Just take a look at the confirmed speaker list. I am definitely coming and it will be a great event-no matter who organizes it.

Time to rigorously boycott Intersango and the "Bitcoin Conference" then?
BB.

That's a no-brainer. Of course you abandon both. Community has already split because of this ordeal.

[Mike Jones]

What is your position in this affair, Mr. Seale?

I am an investment scout for Wendon Group and other funds. Part of my role is to monitor past investments.

I facilitated Bitcoinica Consultancy's take-over of Bitcoinica and made my knowledge of the business available to them.

Bitcoinica Consultancy had exclusive responsibility for Bitcoinica's daily operations in all respects, including hot wallet management.

I'd like to thank your company for taking the initiative then. Give my compliments to the chief.

[sarpar]

@Tihan
Where I am from delayed filing of insolvency is a criminal act. Will you as creditor conduct a report to law enforcement for us?

@All
The consultancy team failed and harmed a large fraction of the Bitcoin community. I ask you all to boycott all their ongoing ventures e.g. Intersango, the London Bitcoin conference, personal trades, open source projects etc.

[Phinnaeus Gage]

Tihan Seale, would you be so kind as to give this community a detail online of what transpired at that hotel lobby between you and Zhou Tong, aka, Kevin Lim, when the handover of Bitcoinica occurred?

~Bruno~

[kiba]

Bitcoinica Consultancy had exclusive responsibility for Bitcoinica's daily operations in all respects, including hot wallet management.

Don't care.

Whoever hold the funds is responsible for it, period. I don't care if you didn't talk to or wasn't informed by the company. If you're messing around with a startup in a startup currency, you should at least understand what the fuck you're doing, including knowing how to reasonably secure this newfanged internet money.

At least you're willing to take responsiblity and do things that the bitcoinica consultancy refuse to do so that we can put this fiasco behind us.

[kiba]

@All
The consultancy team failed and harmed a large fraction of the Bitcoin community. I ask you all to boycott all their ongoing ventures e.g. Intersango, the London Bitcoin conference, personal trades, open source projects etc.

The bitcoin team isn't going to simply oppose their source code contribution to the project. Doing so is quite self-harming. Given that the conference is a big chance for the bitcoin community to get together and build business tie and relationship, so to deny going there is self harming.

Intersango is a bitcoin exchange among many, so boycotting it doesn't cause much self-harm. We just use mtgox instead.

[MemoryDealers]

The short version is that:

Amir, Patrick and Donald of Intersango have all made this problem MUCH MUCH WORSE by refusing to act or even reply to emails.
Because of those three, everyone who had money in Bitcoinca will receive back less money than they would have, had they been cooperative.

They should be ashamed.

[teek]

The short version is that:

Amir, Patrick and Donald of Intersango have all made this problem MUCH MUCH WORSE by refusing to act or even reply to emails.
Because of those three, everyone who had money in Bitcoinca will receive back less money than they would have, had they been cooperative.

They should be ashamed.

I don't understand why this has to be the case, I really don't.  It's like nevermind the mistakes they or zhou made.  They went and took this whole "moral high ground" stance, and now everyone is likely getting fucked.

Also - how the liquidator handles BTC assets is going to be interesting, likely in a way that doesn't benefit any of us.

[ninjarobot]

Wendon Group intends to donate any funds it obtains via receivership in favor of Bitcoinica customers.

Thank you for acting with integrity.

Please make sure the reimbursement database managed by the Bitcoin Consultancy guys is secured so the liquidator has records of verified customers and previous payouts. We really don't need another wipe at this point.

[tseale]

@Tihan
Where I am from delayed filing of insolvency is a criminal act. Will you as creditor conduct a report to law enforcement for us?

There will be legal action against Consultancy members for applicable acts of civil and criminal wrongdoing.

[Vod]

@Tihan
Where I am from delayed filing of insolvency is a criminal act. Will you as creditor conduct a report to law enforcement for us?

There will be legal action against Consultancy members for applicable acts of civil and criminal wrongdoing.

I doubt that.  People don't even want legal action against the thief that started all this. 

[terrytibbs]

Tihan Seales the deal, as always.

[rjk]

Tihan Seales the deal, as always.

Oh god, what a terrible pun.

[terrytibbs]

Tihan Seales the deal, as always.

Oh god, what a terrible pun.

Fuck, I knew it would turn out cheesy as hell.

[adamstgBit]

is their a estimate of the % of coins left over after all the hacking?
what have they done with the funds they still have, what do they plan to do with them?
at first it seemed like they were trying to find out who should get what, are they still trying to do that?

are these  the questions they refuse to answer?

[disclaimer201]

is their a estimate of the % of coins left over after all the hacking?
what have they done with the funds they still have, what do they plan to do with them?
at first it seemed like they were trying to find out who should get what, are they still trying to do that?

are these  the questions they refuse to answer?

Read OP post. Bitcoinica GP is doing shit for the past weeks now. They just packed their stuff and left. No word, no more refunds, nothing. One is organizing a conference in London for rich BTC holders that like to be close to banksters, and the others have "important" business trips to make to Las Vegas to play computer games with other geeks. Meanwhile in a secret room, even the work for their exchange has come to a halt.

[epetroel]

Tihan,

How does this effect the efforts by Mt Gox, AurumXChange, et al. to recover the funds from Zhou (or his mysterious friend as the case may be?)

Are you in communication with or actively working with those parties on the funds recovery?

[Vod]

Read OP post. Bitcoinica GP is doing shit for the past weeks now. They just packed their stuff and left. No word, no more refunds, nothing. One is organizing a conference in London for rich BTC holders that like to be close to banksters, and the others have "important" business trips to make to Las Vegas to play computer games with other geeks. Meanwhile in a secret room, even the work for their exchange has come to a halt.

But no doubt they took generous severance payments for themselves out of the Bitcoinica user deposits before they left.

[Transisto]

@All
The consultancy team failed and harmed a large fraction of the Bitcoin community. I ask you all to boycott all their ongoing ventures e.g. Intersango, the London Bitcoin conference, personal trades, open source projects etc.

+1

And the reason is simple, While they are doing this they aren't doing what they should be doing.

Honestly, every time I see someone asking for support about Intersango exchange I die a little inside, Being aware of the fiasco, having money stored there and then ask for support ??
(I can understand if it's a withdrawal issue)

Communicating to them about anything else than Bitcoinica resolution show a lack of support to Bitcoinica users.

Attending, speaking or benefiting in anyway from the conference organized by Amir show the same lack of respect.

[BTCurious]

I avoid Intersango and tell people to avoid it. But the conference… no, I want to go to the conference. Not for the hosts, but for the speakers, and for meeting the attendees. A large gettogether simply doesn't happen every day!

[bittenbob]

This thread is confirmation that Patrick, Donald and Amir all need to be branded as scammers. Their behavior through all of this shows that they should not be trusted with anyone's money or information from this point forward. I also think civil proceedings should begin against them with any legal investigations into their criminal responsibility taking place concurrently. They have abandoned their company with a big middle finger to all their creditors and I think it's time to take some action against them.

[mc_lovin]

Rackspace?  I thought it was Linode?

[sarpar]

I avoid Intersango and tell people to avoid it. But the conference… no, I want to go to the conference. Not for the hosts, but for the speakers, and for meeting the attendees. A large gettogether simply doesn't happen every day!

Then at least kick each of them in their little ball-sack when you see them.

[rjk]

Rackspace?  I thought it was Linode?

Linode was one hack, Rackspace was another.

[mc_lovin]

Rackspace?  I thought it was Linode?

Linode was one hack, Rackspace was another.

Wow.. They moved datacenters and everything.. Man, they should have fixed the site after the first hack, but too late now to give advice.

3 big hacks, in Canada we call that a hat-trick!  hack-trick?

[augustocroppo]

Donald Norman, Patrick Strateman and Amir Taaki accepted responsibility for Bitcoinica on April 24 as Bitcoinica Consultancy and have retained the -only- legal authority to act on behalf of the company. At this time it appears they have abandoned their legal duty.

This is the same Amir Taaki which gave a speech at 27th July 2012 in the FISL?

 

http://www.techtudo.com.br/noticias/noticia/2012/07/desenvolvedor-do-bitcoin-fala-sobre-moeda-digital-que-dispensa-taxas.html

I just read the above news few minutes ago and I am surprised.

http://softwarelivre.org/fisl13

So, while the shit hit the fan he was enjoying the beautiful south Brazilian girls and landscape?

Yeah!

[link removed]

[BTCurious]

NSFW on that last link, if your safesearch is off.

[repentance]

This thread is confirmation that Patrick, Donald and Amir all need to be branded as scammers. Their behavior through all of this shows that they should not be trusted with anyone's money or information from this point forward. I also think civil proceedings should begin against them with any legal investigations into their criminal responsibility taking place concurrently. They have abandoned their company with a big middle finger to all their creditors and I think it's time to take some action against them.

Just to add to what Tihan has said so far, a liquidator has the capacity and the obligation to report financial offences by the principals for further investigation.  Although privately appointed liquidators do tend to be less aggressive regarding things like claw back, they have exactly the same powers and responsibilities as the Official Assignee and must distribute the liquidated assets in the manner laid down by law.

[DarkEmi]

It is August 2012 and 80 days have passed since Bitcoinica was taken offline following the Rackspace hack. Many of you have followed developments since that time with interest and frustration. The company's investors and I have also been extremely disappointed.

Donald Norman, Patrick Strateman and Amir Taaki accepted responsibility for Bitcoinica on April 24 as Bitcoinica Consultancy and have retained the -only- legal authority to act on behalf of the company. At this time it appears they have abandoned their legal duty.

They now refuse to reply to communication, refuse to acknowledge their responsibility, refuse to resign voluntarily, and refuse to act. In particular they have refused to do anything to recover stolen funds, even where the required action is as simple as providing a payment address. This is now hindering the efforts of others to minimize loss to Bitcoinica's customers.

Clearly, this must end.

Acting in its capacity as creditor to Bitcoinica LP, the Wendon Group investment fund will appoint a receiver under New Zealand law. This has been an option of last resort which is now unavoidable. Under receivership, a licensed and insured specialist will replace the Consultancy as the designated authority. Upon satisfaction of secured creditor interests, the company will proceed to liquidation in which remaining funds are distributed. Without Consultancy cooperation, this is the only ready way forward.

Wendon Group intends to donate any funds it obtains via receivership in favor of Bitcoinica customers. Complete liquidation will likely take place over a matter of months.

While this is not the outcome any hoped for, it is certainly an improvement over the deadlock resulting from Donald, Patrick and Amir's untimely abandonment.

Many have suffered because of the Bitcoinica disaster. Everyone is right to be upset. Since no one in charge has seen fit to offer an apology, let it be me instead. To all those affected, I'm very sorry.


Tihan Seale

Thanks for the update !

I can not say I am happy about the bitcoinica consultancy as well.

[sarpar]

Wendon Group intends to donate any funds it obtains via receivership in favor of Bitcoinica customers.

Thank you for acting with integrity.

Please make sure the reimbursement database managed by the Bitcoin Consultancy guys is secured so the liquidator has records of verified customers and previous payouts. We really don't need another wipe at this point.

That is very gracious! - so in other words you voluntarily make your debt subordinate to the customers'? Or will you after reception of funds distribute them in your sole discretion?

Thank you again for acting so professional!

[DarkEmi]

@Tihan
Where I am from delayed filing of insolvency is a criminal act. Will you as creditor conduct a report to law enforcement for us?

There will be legal action against Consultancy members for applicable acts of civil and criminal wrongdoing.

Yeah I strongly support that.
I also think that you should attack the mysterious thief if there is any amount missing from the assets that were stolen (and he should be quite lucky that no charges are brought but at this point recovering the funds matter most to most people)

[repentance]

Or will you after reception of funds distribute them in your sole discretion?

Thank you again for acting so professional!

It sounds like Wendon is securing its interest as a secured creditor via receivership and will then donate the funds it receives to the liquidator of Bitcoinica LP for distribution according to the process laid down by law.  

Tihan, as shares in Intersango are part of Wendon's interest in Bitcoinica LP, will those be liquidated and the proceeds made available to the liquidator?

Also, are you able to shed any light on whether or not Wendon is Bitcoinica LP's only secured creditor?

[dopamine]

So creditor means customer funds being returned?

[repentance]

So creditor means customer funds being returned?

Creditors are the people who are owed money. Insolvency law divides creditors into various groups and assigns those groups a priority for repayment.  Sometimes unsecured creditors receive only a few cents on the dollar from liquidation or even nothing at all.  Based on the information we have at the moment (and we don't have any information about other creditors who may have claims), it's likely that Bitcoinica users will receive some distribution - it's not possible to predict the % they'll receive because that is determined towards the end of the liquidation process.

[sarpar]

So creditor means customer funds being returned?

- Depends how much assets can be recovered (Zhou plays a big role here)
- Depends how much other debt is outstanding (The Liquidation process is costly)
- Depends how the Liquidator can legally deal with BTC and recognizes it as debt (Payout in Fiat or BTC)
- Depends whether the claim requests are still available
- Depends how much of customer database reconstruction has been done so far (since the Consultancy is out of the game)
- Depends what other legal problems evolve (Money laundering f.i. see "Maria")

[MagicalTux]

Creditors are the people who are owed money. Insolvency law divides creditors into various groups and assigns those groups a priority for repayment.  Sometimes unsecured creditors receive only a few cents on the dollar from liquidation or even nothing at all.  Based on the information we have at the moment (and we don't have any information about other creditors who may have claims), it's likely that Bitcoinica users will receive some distribution - it's not possible to predict the % they'll receive because that is determined towards the end of the liquidation process.

Bitcoinica has hopefully little to none other liabilities, which would limit the process to returning funds to bitcoinica users.

[Raoul Duke]

Given that shit already hit the fan you guys might as well know that Donald will be enjoying the Portuguese sun for a month.
Given this whole mess he really should be needing some vacations

[BitBuster]

Given that shit already hit the fan you guys might as well know that Donald will be enjoying the Portuguese sun for a month.

Given this whole mess he really should be needing some vacations

Do you know this to be the case or just joking? Inference that he is jetting off on Bitcoinica customer's money?


BB.

[Raoul Duke]

Given that shit already hit the fan you guys might as well know that Donald will be enjoying the Portuguese sun for a month.

Given this whole mess he really should be needing some vacations

Do you know this to be the case or just joking? Inference that he is jetting off on Bitcoinica customer's money?


BB.

I'm serious.
He contacted me to hook him up with the Lisbon bitcoin scene.
No, I don't live in Lisbon.
Some interested parties were made aware of this fact, I just didn't relay it in the forums.
Given this statement by Tihan I don't see the point on keeping it a secret anymore.

BTW, I'm not infering that he's spending Bitcoinica's customers money. Just that he decided to take some time off when he should be working his ass off to make all of you whole after this mess.

[repentance]

Creditors are the people who are owed money. Insolvency law divides creditors into various groups and assigns those groups a priority for repayment.  Sometimes unsecured creditors receive only a few cents on the dollar from liquidation or even nothing at all.  Based on the information we have at the moment (and we don't have any information about other creditors who may have claims), it's likely that Bitcoinica users will receive some distribution - it's not possible to predict the % they'll receive because that is determined towards the end of the liquidation process.

Bitcoinica has hopefully little to none other liabilities, which would limit the process to returning funds to bitcoinica users.

Hopefully the liquidation is also relatively uncomplicated and doesn't require the liquidator to investigate many irregularities.  The more complicated the liquidation is, the longer it will take for users to be paid and the less they'll receive.

It's probably worth pointing out to users that a liquidator is bound to consider options which would maximise the return to creditors such as rescue packages.  Although the Bitcoinica brand seems irrevocably damaged right now, there may be someone willing to purchase Bitcoinica LP lock, stock and barrel for a firesale price.

The liquidator also determines whether the directors have any personal liability in respect of the insolvency.

[thezerg]

Someone who is signed up to the conf should start a poll and thread so the community acts together in attendance or boycott.  Im not going but personally i say why let these lusers stop a great conf?  And you all will lose even more $ in broken reservations, etc?  Start the boycott after the conf but somebody better make sure all reservations are real (and paid) etc...

[repentance]

Someone who is signed up to the conf should start a poll and thread so the community acts together in attendance or boycott.  Im not going but personally i say why let these lusers stop a great conf?  And you all will lose even more $ in broken reservations, etc?  Start the boycott after the conf but somebody better make sure all reservations are real (and paid) etc...

From what's been posted so far, less than 100 tickets out of 700 have been sold to date.

[virtuallylaw]

Quick update. The returned Bitcoins are being moved to an account where the receiver can consolidate funds. Transaction details here: http://blockchain.info/address/1LH6Q1ZXvdQepz8hfQd7kx6XHrggz1VkzD.

More updates to come.

Thanks,
Patrick

[labestiol]

Wendon Group intends to donate any funds it obtains via receivership in favor of Bitcoinica customers.

Thank you for acting with integrity.

Please make sure the reimbursement database managed by the Bitcoin Consultancy guys is secured so the liquidator has records of verified customers and previous payouts. We really don't need another wipe at this point.

+1

Tihan,

How does this effect the efforts by Mt Gox, AurumXChange, et al. to recover the funds from Zhou (or his mysterious friend as the case may be?)

Are you in communication with or actively working with those parties on the funds recovery?

Same question.

Also, do you have any idea how the liquidation process will handle BTC ?

Anyway, thanks for your actions (and everyone else involved). It's time to end this.
And about the London Conference, I understand those who will go there. It's more important that this. But I truly hope you'll put pressure on the Bicoinica Consultancy to act like grown up and help the liquidation process. It's just mind blowing how bad they handled the situation. This shouldn't be accepted by our community.

[repentance]

But I truly hope you'll put pressure on the Bicoinica Consultancy to act like grown up and help the liquidation process. It's just mind blowing how bad they handled the situation. This shouldn't be accepted by our community.

They are legally obliged to co-operate with the liquidator and failing to do so could end up in them being exposed to personal liability.

[NRF]

Acting in its capacity as creditor to Bitcoinica LP, the Wendon Group investment fund will appoint a receiver under New Zealand law.

I have been kind of waiting and hoping for this.  I am not a Claimant so I could take no direct action myself but I applaud your actions. (Even though I think you may get next to nothing back)

What I am really (and selfishly) hoping for is that it will give a legal test case and President of the status of Bitcoin in New Zealand Law .  It will probably have to go all the way to the High Court to do it, and New Zealand is probably the only country in the world you can do it in at the moment (I wont bore you with New Zealand Law and current event's   ) .

From there it is a simple step to Commonwealth Law because of the quirks of how New Zealand law works and from there to International Law will probably have to involve another president case (or possibly even the same one).

I humbly suggest everyone get behind this bandwagon.

[tseale]

How does this effect the efforts by Mt Gox, AurumXChange, et al. to recover the funds from Zhou (or his mysterious friend as the case may be?)

This should remove roadblocks to recovering additional funds.

When the hacker was ready to return 15,000 BTC, that transaction was delayed for days because the Consultancy would not provide a receiving address.

Thankfully, Mr. Murck stepped in as a licensed attorney to broker their receipt. He was subjected to a lot of hazing and invasion of privacy here for doing so. Without him, the coins might never have been recovered.

Those funds and any additional recovered funds will be placed under control of a receiver. This is a formal legal process that will allow Mt Gox et al to release funds to the receiver for distribution.

[repentance]

Acting in its capacity as creditor to Bitcoinica LP, the Wendon Group investment fund will appoint a receiver under New Zealand law.

I have been kind of waiting and hoping for this.  I am not a Claimant so I could take no direct action myself but I applaud your actions. (Even though I think you may get next to nothing back)

What I am really (and selfishly) hoping for is that it will give a legal test case and President of the status of Bitcoin in New Zealand Law .  It will probably have to go all the way to the High Court to do it, and New Zealand is probably the only country in the world you can do it in at the moment (I wont bore you with New Zealand Law and current event's   ) .

From there it is a simple step to Commonwealth Law because of the quirks of how New Zealand law works and from there to International Law will probably have to involve another president case (or possibly even the same one).

I humbly suggest everyone get behind this bandwagon.

Liquidation won't necessarily lead to the nature of Bitcoin being legally determined.  A liquidator is bound to realise any assets but they don't need to decide whether it's a currency, a commodity, or something else entirely.  That particular issue would most likely arise if creditors owed USD asserted that those who were owed Bitcoin only had no valid legal claim.  That seems extremely unlikely to happen.  The most likely scenario is that all of the Bitcoins over which the liquidator takes control will be sold and then the money from that sale will be combined with the currency on hand to meet the claims of creditors.  

Zhou maintained that Bitcoinica was a platform allowing users to trade contracts for difference rather than Bitcoins.  I'm not sure whether this will have any implications for the liquidation process but I doubt this is the first NZ liquidation in which CFD have been a feature.

If any creditors are unhappy with the liquidator's decisions or actions then the High Court is where any challenges must be made.

Soon after the liquidator is appointed and takes control of Bitcoinica's assets, creditors will receive a report which outlines the assets and liabilities of Bitcoinica, the proposed liquidation plan and an estimated date for completion of the liquidation process.  While it's likely that those appointing the liquidator will choose someone they believe will follow the original payout process for returning user funds which was already under way, liquidators don't have unlimited discretion and creditors can petition to have the appointed liquidator replaced by either another private liquidator or the Official Assignee.  New Zealand law allows for those who have assisted in securing/recovering assets for the benefit of creditors to have their costs reimbursed by the liquidator as a preferential claim in addition to their total unsecured debt being granted preferential status. 

[iamapi]

Chaos， when will it end?

[NRF]

True, most liquidation's in New Zealand are handled outside of the courts (apart from a rubber stamp) unless there is some sort of contention, what I am interested in is if it gets picked up or referred to the SFO (Serious Fraud Office).  The criteria is ;-

* There are multiple victims (usually investors) of the suspected fraud
* The sum of money lost exceeds $2,000,000
* The alleged criminal transactions have significant legal or financial complexity beyond the resources of most other law enforcement agencies.
[ source: http://www.sfo.govt.nz/what-is-serious-fraud ]

Like I said, I am being selfish, it would probably mean that it will be all gone by the end of the process.  It would be good if we got some sort of ruling as to the legal aspects of bitcoin's and digital currency's in general.

[repentance]

True, most liquidation's in New Zealand are handled outside of the courts (apart from a rubber stamp) unless there is some sort of contention, what I am interested in is if it gets picked up or referred to the SFO (Serious Fraud Office).  The criteria is ;-

* There are multiple victims (usually investors) of the suspected fraud
* The sum of money lost exceeds $2,000,000
* The alleged criminal transactions have significant legal or financial complexity beyond the resources of most other law enforcement agencies.
[ source: http://www.sfo.govt.nz/what-is-serious-fraud ]

Like I said, I am being selfish, it would probably mean that it will be all gone by the end of the process.  It would be good if we got some sort of ruling as to the legal aspects of bitcoin's and digital currency's in general.

As far as we know, users are owed a total of just over $1 million dollars.  It's also important to remember that it was the investors who brought the limited partner on board, too - their investment preceded the involvement of the general partners so they can't claim that the nature of their investment or the true financial state of Bitcoinica was hidden from them by the general partner.

I do think that there'll eventually be a Bitcoin-related fraud case.  I just think that if emerges from this liquidation then it will relate to events which occurred prior to Bitcoinica Consultancy assuming responsibility for Bitcoinica LP on 24 April.

[EnergyVampire]

Hmm.... I was under the impression that Intersango or Bitcoin Consultancy LLC was only a shareholder of Bitcoinica?

Honestly, it all sounds like Intersango got scammed along with the Bitcoinica customers!!!

[repentance]

Hmm.... I was under the impression that Intersango or Bitcoin Consultancy LLC was only a shareholder of Bitcoinica?

Honestly, it all sounds like Intersango got scammed!!!

According to the exchange of shares and interest agreement leaked which was leaked, Amir, Patrick and Donald obtained a combined interest of 25% in Bitcoinica LP in exchange for Wendon receiving 250 shares (out of 1000 uncalled shares which were issued as part of the deal) in Intersango.  We don't know whether they contributed any capital to the partnership, but general partners very often don't or contribute only a token amount.

[EnergyVampire]

Hmm.... I was under the impression that Intersango or Bitcoin Consultancy LLC was only a shareholder of Bitcoinica?

Honestly, it all sounds like Intersango got scammed!!!

According to the exchange of shares and interest agreement leaked which was leaked, Amir, Patrick and Donald obtained a combined interest of 25% in Bitcoinica LP in exchange for Wendon receiving 250 shares (out of 1000 uncalled shares which were issued as part of the deal) in Intersango.  We don't know whether they contributed any capital to the partnership, but general partners very often don't or contribute only a token amount.

LOL, so not only did Bitcoin Consultancy LLC get scammed they also lost 250 shares of Intersango Ltd? Did they at least get a reach around?  


This whole mess is even more interesting than the Tradehill-Dwolla fraud.

[MelMan2002]

Tihan-
So, will you be requesting funds back from those who got paid out 100% of their claims so that everyone will get an equal proportion back?  And is it true that you had a hand in paying out 100% to a select group?

[nrd525]

The bitcoinica domain name auction should be interesting.

[repentance]

Tihan-
So, will you be requesting funds back from those who got paid out 100% of their claims so that everyone will get an equal proportion back?  And is it true that you had a hand in paying out 100% to a select group?

Those kinds of decisions are up to the liquidator.  It's not clear from the leaked documents whether those who received 100% payments received the whole amount from Bitcoinica assets or whether Tihan paid part of their claim personally.  It's also not clear whether those who will become entitled to have their claims treated as preferential (which is a class separate from secured creditors but which ranks higher than unsecured creditors) are going to waive their right to receive 100% of their claim in addition to any costs they've incurred in recovering/protecting assets.  Those creditors might wish to make a statement in respect of that.

It's important to remember that a receiver and a liquidator have different obligations and that it's totally legal (and quite usual) for a receiver to recover only sufficient assets to pay secured creditors and then turn the remainder of the process and any surplus assets over to a liquidator.  Receivers are not legally obligated to deal with the interests of unsecured creditors.

The bitcoinica domain name auction should be interesting.

Bitcoinica LP might not own the domain.  They may have only had a conditional right to use it in the same way that Trade Hill had a conditional right to use the 3 domains for which it traded equity.

[Phinnaeus Gage]

Allow me to re-ask my previous question, but from a different tangent.

Tihan Seale--Will you go on record stating who was the guy you met in the Chimelong Hotel (Guangzhou) lobby this past February? Which one of the two images below did the guy you met resemble the most? Also, please let the community know that you conducted due diligence researching exactly who is "Zhou Tong" prior to the transferring of payola funds to said previous owner of Bitcoinica, or was it standard operating procedure to pay any Asian boy who simply claimed he built the Bitconica site, with the hope that you got rucky and tipped the right boy.

~Bruno~

[tseale]

Tihan-
So, will you be requesting funds back from those who got paid out 100% of their claims so that everyone will get an equal proportion back?  And is it true that you had a hand in paying out 100% to a select group?

Please understand that I have no authority over the payout process past, present or future.

I'm only updating the community on the actions initiated by the investment group to move that process out of the hands of the Consultancy and into the hands of a legally appointed receiver.

[augustocroppo]

Bitcoinica funds moving forward:

19XTyevts1R1UbJPTv6JiuTW69R6ULXuF7        6,778.37593457 BTC
1KTBQwKT1V2w1RZXtzycqJkRJqxtwZdZdX      8,227.62406543 BTC

http://blockchain.info/address/1N99P8Z5AQXWEYZiS6ddov9Fyc4kuGPpwJ

[Phinnaeus Gage]

Tihan-
So, will you be requesting funds back from those who got paid out 100% of their claims so that everyone will get an equal proportion back?  And is it true that you had a hand in paying out 100% to a select group?

Please understand that I have no authority over the payout process past, present or future.

I'm only updating the community on the actions initiated by the investment group to move that process out of the hands of the Consultancy and into the hands of a legally appointed receiver.

You missed answering a question, but take your time, for I'll keep asking after each time you side-step it.

~Bruno~

[augustocroppo]

More Bitcoinica funds moving forward:

1BpuTiQKCKrikmmsbr91D9MVVzdJZyYCf                         11000.677 BTC
1AchWGg13HJqny5j5YZTmWvKGsTWWzDxwj                   5795.52588052 BTC

http://blockchain.info/address/19XTyevts1R1UbJPTv6JiuTW69R6ULXuF7

[allten]

Tihan-
So, will you be requesting funds back from those who got paid out 100% of their claims so that everyone will get an equal proportion back?  And is it true that you had a hand in paying out 100% to a select group?

Please understand that I have no authority over the payout process past, present or future.

I'm only updating the community on the actions initiated by the investment group to move that process out of the hands of the Consultancy and into the hands of a legally appointed receiver.

Authority is one thing; strong influence is another.

[MagicalTux]

Bitcoinica funds moving forward:

19XTyevts1R1UbJPTv6JiuTW69R6ULXuF7        6,778.37593457 BTC
1KTBQwKT1V2w1RZXtzycqJkRJqxtwZdZdX      8,227.62406543 BTC

http://blockchain.info/address/1N99P8Z5AQXWEYZiS6ddov9Fyc4kuGPpwJ

Actually those funds were deposited on MtGox by Patrick Murck, cf:

Quick update. The returned Bitcoins are being moved to an account where the receiver can consolidate funds. Transaction details here: http://blockchain.info/address/1LH6Q1ZXvdQepz8hfQd7kx6XHrggz1VkzD.

More updates to come.

Thanks,
Patrick

MtGox officially confirms currently having on deposit those 15,006.00000000 BTC. As you may know, our system uses a pooled Bitcoin online reserve, which means that activity beyond that point is no longer from Bitcoinica, LP.

We also have disabled the ability to withdraw Bitcoins from the account where those Bitcoins are held to ensure the security of those coins until we receive validated information from an appointed receiver for Bitcoinica, LP.

[jimbobway]

How does this effect the efforts by Mt Gox, AurumXChange, et al. to recover the funds from Zhou (or his mysterious friend as the case may be?)

This should remove roadblocks to recovering additional funds.

When the hacker was ready to return 15,000 BTC, that transaction was delayed for days because the Consultancy would not provide a receiving address.

Thankfully, Mr. Murck stepped in as a licensed attorney to broker their receipt. He was subjected to a lot of hazing and invasion of privacy here for doing so. Without him, the coins might never have been recovered.

Those funds and any additional recovered funds will be placed under control of a receiver. This is a formal legal process that will allow Mt Gox et al to release funds to the receiver for distribution.

If what you say is true about the Consultancy, then shame on them.  They are avoiding any responsibility for this mess by doing nothing.

[augustocroppo]

MtGox officially confirms currently having on deposit those 15,006.00000000 BTC. As you may know, our system uses a pooled Bitcoin online reserve, which means that activity beyond that point is no longer from Bitcoinica, LP.

We also have disabled the ability to withdraw Bitcoins from the account where those Bitcoins are held to ensure the security of those coins until we receive validated information from an appointed receiver for Bitcoinica, LP.

So why the funds where split in four parts if there is only one account?

The funds were split in four different wallets, including one which have been used for previous transactions.

http://blockchain.info/address/1BpuTiQKCKrikmmsbr91D9MVVzdJZyYCf1

[MagicalTux]

So why the funds where split in four parts if there is only one account?

The funds were split in four different wallets, including one which have been used for previous transactions.

http://blockchain.info/address/1BpuTiQKCKrikmmsbr91D9MVVzdJZyYCf1

When you deposit funds on MtGox, those funds are then used for other accounts, it's the way most (if not all) online wallets are working.

[augustocroppo]

Bitcoinica funds splitting:

1M2U1HRCXCJhL8zhdXcHx6YFLPff6S1J9k             4714.65137532 BTC
15i6xbw32JQCf2JkF5hFZXWzCWYkiydReH             3512.97269011 BTC

http://blockchain.info/address/1KTBQwKT1V2w1RZXtzycqJkRJqxtwZdZdX

[augustocroppo]

When you deposit funds on MtGox, those funds are then used for other accounts, it's the way most (if not all) online wallets are working.

Used for what?

I thought this funds were in a single account, as you admitted.

[MagicalTux]

When you deposit funds on MtGox, those funds are then used for other accounts, it's the way most (if not all) online wallets are working.

Used for what?

I thought this funds were in a single account, as you admitted.

https://en.bitcoin.it/wiki/Browser-based_wallet#Things_to_be_aware_of

Basically, the blockchain is not a reliable way to track bitcoins deposited on online wallets.

[flower1024]

The short version is that:

Amir, Patrick and Donald of Intersango have all made this problem MUCH MUCH WORSE by refusing to act or even reply to emails.
Because of those three, everyone who had money in Bitcoinca will receive back less money than they would have, had they been cooperative.

They should be ashamed.

+1

[c_k]

Rackspace hack

Was Rackspace itself actually hacked?

I thought it was only the bitcoinica system within the vm that was compromised.

Symantics aside, I applaud your work in doing the right thing by bitcoinica's users 

[superfastkyle]

Why do we keep letting employees of bitcoinica give "Announcements" without any proof anything will actually happen. I see no reason to not believe they are going to run off with our money. Every update ever given every minuscule payout has always been it appears to delay and give false hope. They have played on our emotions by passing blame around and causing members of this forum to take sides. The drama regarding bitcoinica is not important to me. They are responsible to give back the remaining percentage of funds they may have and then we should be responsible to sue them for the rest due to their incompetance. If they do not give back the remaining funds they do have anyone associated with bitcoinica should be considered untrustworthy and not allowed to do or get any business from this forum. If they are allowed to stay I see no reason to keep an account here. I don't think this should be a haven for scammers. Bitcoin is not bitcointalk.org

[repentance]

Why do we keep letting employees of bitcoinica give "Announcements" without any proof anything will actually happen.

Tihan is not an employee of Bitcoinica.  A limited partner's status under NZ law is identical to that of a company shareholder.

Users could have forced the liquidation of Bitcoinica but chose not to do so because it would lessen percentage of funds returned to them and slow down the process of those funds being returned.  It's now pretty much impossible for the refund process to continue without the company being liquidated.

[disclaimer201]

Mr Seale, please identify Zhou Tong, would you? It spares us another 50 pages of ongoing speculation in 3 different threads. Thank you!

[Come-from-Beyond]

Allow me to re-ask my previous question, but from a different tangent.

Tihan Seale--Will you go on record stating who was the guy you met in the Chimelong Hotel (Guangzhou) lobby this past February? Which one of the two images below did the guy you met resemble the most? Also, please let the community know that you conducted due diligence researching exactly who is "Zhou Tong" prior to the transferring of payola funds to said previous owner of Bitcoinica, or was it standard operating procedure to pay any Asian boy who simply claimed he built the Bitconica site, with the hope that you got rucky and tipped the right boy.

~Bruno~

Looking to the picture with "Dear Bruno, I'm real" poster, I can't get one thing:

Why Zhou Tong trying to prove he is real? If we believe he doesn't really exist then his ass will be safer, coz noone will try to sue him for recent Bitcoinica hack...

[ydenys]

If you believe the leaked emails, Mr Tihan Seale is the one who suggests using customers’ deposits for company’s expenses in the first place.

We do not know the real shortfall and how much all the hacks (with or without the inverted commas) up to date account for. 5% - 15% of deposits, less?

What we can be sure, however, is that (if this saga is ever to be resolved this way) after paying ‘creditors’ off and all the associated expenses, there would be far less left that it is already there.

Giving poster the benefit of the doubt, i believe current ‘legal way’ plan is (since they had made enough money on the exchange rate already) after ‘sufficient’ time actually process and refund USD deposits to cover their butts, maybe even returning the coins in USD form ‘at the moment of …’ at x% of their current value if the remaining funds/current exchange rate allows.

If they really wanted, there is an easy way to ask customers to resubmit the claims and cross reference them with existing details from Consultancy and Zhou and then simply pay off what’s left of funds to all verified/able proportionally.

The legal way Mr Seale is intended upon would only benefit him and his creditors at customers’ expense, as all ‘legal ways’ do.

[greBit]

Allow me to re-ask my previous question, but from a different tangent.

Tihan Seale--Will you go on record stating who was the guy you met in the Chimelong Hotel (Guangzhou) lobby this past February? Which one of the two images below did the guy you met resemble the most? Also, please let the community know that you conducted due diligence researching exactly who is "Zhou Tong" prior to the transferring of payola funds to said previous owner of Bitcoinica, or was it standard operating procedure to pay any Asian boy who simply claimed he built the Bitconica site, with the hope that you got rucky and tipped the right boy.

Another call for Mr Seale to answer the question and identify Zhou Tong, it would certainly clear a lot of things up.

[repentance]

If they really wanted, there is an easy way to ask customers to resubmit the claims and cross reference them with existing details from Consultancy and Zhou and then simply pay off what’s left of funds to all verified/able proportionally.

The Consultancy has stopped communicating with anyone and there is no way for anyone else to assume control of the remaining funds and the refund process without establishing a legal basis for doing so.

We know that at the time the MtGox breach was announced genjix posted that it was likely to result in a forced 30% reduction in refunds.

We also know from genjix's posts that 38% of funds verified as owing had been paid out by July 20 (as those payments were for 50%, the users who received them represented 76% of all verified user claims).

Of course the value of BTC has shifted since recently and that will affect the total funds available for repaying users.

[aq]

Why Zhou Tong trying to prove he is real? If we believe he doesn't really exist then his ass will be safer, coz noone will try to sue him for recent Bitcoinica hack...

Since almost a year Bruno has some strange obsession about ZT being not ZT. So a long time ago, ZT posted this picture with the "Dear Bruno..." writing on it. As you can see, Bruno is still obsessed. And I am sure he would still doubt ZT being ZT after he had successfully dissected him.

[EnergyVampire]

If you believe the leaked emails, Mr Tihan Seale is the one who suggests using customers’ deposits for company’s expenses in the first place.

Mr Tihan Seale, do you collect Chinese relics?

[unclescrooge]

Time to rigorously boycott Intersango and the "Bitcoin Conference" then?


BB.

No. Bitcoin conference is a major event which should absolutely not be made about the bitcoinica fiasco.

[Nefario]

Time to rigorously boycott Intersango and the "Bitcoin Conference" then?


BB.

No. Bitcoin conference is a major event which should absolutely not be made about the bitcoinica fiasco.

Chiming in on the whole Bitcoin conference (www.bitcoin2012.com) boycot idea, just to let you know that the Intersango guys are not the only ones involved in organising it.

If it's boycotted, all the work, time, effort, reputation and money that I and others(who are not involved with Bitcoinica) have already put into organising this conference will be destroyed. The venue has been paid for, awesome speakers have been arranged, over 100 tickets have been sold(and continuing fast, it's going to be sold out), and we've already got loads of sponsors (small bitcoin businesses mostly).

This event is going to be monumentous, as well as being a fantastic opportunity for bitcoiners to meet up, watch the talks, take part in the workshops, it's going to be a boon for bitcoin related businesses and some major PR for bitcoin itself.

If you guys want to turn this into a Bitcoinica rage then you'll destroy all this(other peoples money) and get nothing in return as a result.

Don't mix the conference up with the Bitcoinica affair, it will bring no good for anyone. It's going to be a great, historical event for bitcoin, and soon enough the world in general.

Nefario.

[BTCurious]

Chiming in on the whole Bitcoin conference (www.bitcoin2012.com) boycot idea, just to let you know that the Intersango guys are not the only ones involved in organising it.

If it's boycotted, all the work, time, effort, reputation and money that I and others(who are not involved with Bitcoinica) have already put into organising this conference will be destroyed. The venue has been paid for, awesome speakers have been arranged, over 100 tickets have been sold(and continuing fast, it's going to be sold out), and we've already got loads of sponsors (small bitcoin businesses mostly).

This event is going to be monumentous, as well as being a fantastic opportunity for bitcoiners to meet up, watch the talks, take part in the workshops, it's going to be a boon for bitcoin related businesses and some major PR for bitcoin itself.

If you guys want to turn this into a Bitcoinica rage then you'll destroy all this(other peoples money) and get nothing in return as a result.

Don't mix the conference up with the Bitcoinica affair, it will bring no good for anyone. It's going to be a great, historical event for bitcoin, and soon enough the world in general.

Nefario.

+1
Please don't destroy the conference over this.

[Mushoz]

Chiming in on the whole Bitcoin conference (www.bitcoin2012.com) boycot idea, just to let you know that the Intersango guys are not the only ones involved in organising it.

If it's boycotted, all the work, time, effort, reputation and money that I and others(who are not involved with Bitcoinica) have already put into organising this conference will be destroyed. The venue has been paid for, awesome speakers have been arranged, over 100 tickets have been sold(and continuing fast, it's going to be sold out), and we've already got loads of sponsors (small bitcoin businesses mostly).

This event is going to be monumentous, as well as being a fantastic opportunity for bitcoiners to meet up, watch the talks, take part in the workshops, it's going to be a boon for bitcoin related businesses and some major PR for bitcoin itself.

If you guys want to turn this into a Bitcoinica rage then you'll destroy all this(other peoples money) and get nothing in return as a result.

Don't mix the conference up with the Bitcoinica affair, it will bring no good for anyone. It's going to be a great, historical event for bitcoin, and soon enough the world in general.

Nefario.

+1000

Please don't boycot and hurt the conference over this. You're just hurting Bitcoin as a whole.

[aq]

Time to rigorously boycott Intersango and the "Bitcoin Conference" then?

Please don't boycot and hurt the conference over this. You're just hurting Bitcoin as a whole.

You have missed, that it could be BitBusters (and quite a few others) agenda to actually hurt Bitcoin.
And that should be an even greater reason for all of us not to boycott it.

[repentance]

Time to rigorously boycott Intersango and the "Bitcoin Conference" then?

Please don't boycot and hurt the conference over this. You're just hurting Bitcoin as a whole.

You have missed, that it could be BitBusters (and quite a few others) agenda to actually hurt Bitcoin.
And that should be an even greater reason for all of us not to boycott it.

The Intersango guys should probably think about whether their attendance would be disruptive to the conference as a whole though.

[BitBuster]

Thankfully, Mr. Murck stepped in as a licensed attorney to broker their receipt. He was subjected to a lot of hazing and invasion of privacy here for doing so.

For the 5th time: Under what legal authority is Murck able to receive and transfer stolen goods?.

Without him, the coins might never have been recovered.

No coins are back in the hands of their rightful owners. Therefore NO coins have yet been recovered.

Tihan, I will join the chorus of people who implore you to answer Bruno's question.

Chiming in on the whole Bitcoin conference (www.bitcoin2012.com) boycot idea, just to let you know that the Intersango guys are not the only ones involved in organising it.

If it's boycotted, all the work, time, effort, reputation and money that I and others(who are not involved with Bitcoinica) have already put into organising this conference will be destroyed.

Nefario, I totally understand where you are coming from. This is why for your own and the sake of the conference, you must immediately jettison any and all involvement with Intersango/Bitcoinica and other actors. Remove them from the administration and sponsorship of the event, otherwise you will all be tarred with the same brush. There could be severe legal conclusions to all this, please save the conference from becoming compromised in this way.

You have missed, that it could be BitBusters (and quite a few others) agenda to actually hurt Bitcoin.
And that should be an even greater reason for all of us not to boycott it.

You are talking out of your backside. My only agenda is the perpetuation and enrichment of Bitcoin, which demands that its real detractors (theifs, hackers, shady operators) be hunted down and made an example of.


BB.

[MagicalTux]

Thankfully, Mr. Murck stepped in as a licensed attorney to broker their receipt. He was subjected to a lot of hazing and invasion of privacy here for doing so.

For the 5th time: Under what legal authority is Murck able to receive and transfer stolen goods?.

As far as I can see, Patrick Murck is acting in contact with Tihan Seale, who is the only known individual known to represent the owners of Bitcoinica LP.

That gives him enough authority to recover whatever possessions that used to be in Bitcoinica's care when whoever stole these says he wants to return [part of] it.

[aq]

Thankfully, Mr. Murck stepped in as a licensed attorney to broker their receipt. He was subjected to a lot of hazing and invasion of privacy here for doing so.

For the 5th time: Under what legal authority is Murck able to receive and transfer stolen goods?.

Why do you even care?

Without him, the coins might never have been recovered.

No coins are back in the hands of their rightful owners. Therefore NO coins have yet been recovered.

Thankfully they have ignored your for-the-5th-time question and the funds are now safe at mtgox.

You have missed, that it could be BitBusters (and quite a few others) agenda to actually hurt Bitcoin.
And that should be an even greater reason for all of us not to boycott it.

You are talking out of your backside. My only agenda is the perpetuation and enrichment of Bitcoin, which demands that its real detractors (theifs, hackers, shady operators) be hunted down and made an example of.

Sure, that is the main reason why you (and others) try to prevent ZT to return the funds. Very logically
You should really contact mlawrence, you are a perfect match to form some "Bitcoin crusade"

[disclaimer201]

Time to rigorously boycott Intersango and the "Bitcoin Conference" then?


BB.

No. Bitcoin conference is a major event which should absolutely not be made about the bitcoinica fiasco.

You are right. This is why I politely call all Intersango staff involved in organizing the conference to step back from their responsibility, just as they have from Bitcoinica. Since the conference will probably be co-sponsored by Intersango, this is not going to happen. And this why the conference will fall under a bad light because they cannot afford to lose sponsors I'm sure.

[BitBuster]

For the 5th time: Under what legal authority is Murck able to receive and transfer stolen goods?.

Why do you even care?

Because it is of absolute importance that any legal effort to return stolen funds is, in fact legal.

No coins are back in the hands of their rightful owners. Therefore NO coins have yet been recovered.

Thankfully they have ignored your for-the-5th-time question and the funds are now safe at mtgox.

"Safe"? Perhaps. Legally? Who knows. Returned to the victims? Certainly not.  Wow, what a righteous victory!

Sure, that is the main reason why you (and others) try to prevent ZT to return the funds. Very logically

If Zhou was not the theif, then the funds are not his to return. He is not legally entitled to handle or transfer stolen goods and nor it seems is Murck. Don't try to bait me on logic. It's clear that you cannot understand the logic that for something to be legally legitimate it must have legal authority.

You should really contact mlawrence, you are a perfect match to form some "Bitcoin crusade"

I have no interest with mlawrence and its clear that you have no interest in factual and sincere discussion of the matter.

Since the conference will be probably be co-sponsored by Intersango, this is not going to happen. And this why the conference will fall under a bad light because they cannot afford to lose sponsors I'm sure.

If as many expect, the Intersango trio are eventually proven to be liable/culpable, it could be argued that the whole conference was sponsored by theives with stolen money.


BB.

[MagicalTux]

Sure, that is the main reason why you (and others) try to prevent ZT to return the funds. Very logically

If Zhou was not the theif, then the funds are not his to return. He is not legally entitled to handle or transfer stolen goods and nor it seems is Murck. Don't try to bait me on logic. It's clear that you cannot understand the logic that for something to be legally legitimate it must have legal authority.

Logic and law do not mix well, but most of the time laws do make sense.

For example you do not need legal authority to be acting legally, you just need to act within the scope of the law.

For Patrick Murck, officially representing the owners of Bitcoinica LP, receiving goods that were stolen from Bitcoinica LP sounds actually fine, and is probably the best thing that could happen at that point.

The fact is returning funds to customers is not going to be made easy at all by the fact that part of the funds is missing, and the fact that active account data was apparently deleted by the hacker. The claim process is made so people can fill claims, but those claims then need to be reviewed, and processed. The process also usually includes selling any company property to attempt to reduce the missing part... this will take some time.

[Bigpiggy01]

Thankfully, Mr. Murck stepped in as a licensed attorney to broker their receipt. He was subjected to a lot of hazing and invasion of privacy here for doing so.

For the 5th time: Under what legal authority is Murck able to receive and transfer stolen goods?.

As far as I can see, Patrick Murck is acting in contact with Tihan Seale, who is the only known individual known to represent the owners of Bitcoinica LP.

That gives him enough authority to recover whatever possessions that used to be in Bitcoinica's care when whoever stole these says he wants to return [part of] it.

Umm wasn't Tihan fired at one point by the "Wendon Group" ? In the leaked emails he is very much claiming to be so. In light of that I don't really see how you guys can take anything he says at face value.

[aq]

legal

You are so obsessed with the law, that it would be in your best interest to just quit Bitcoin. No really, fiat is your world. They even fabricate laws as they need. Leave Bitcoin, enter fiat. Otherwise you may even discover that bitcoins are used at silk road, another thing that is most probably not legal.

[Nefario]

If as many expect, the Intersango trio are eventually proven to be liable/culpable, it could be argued that the whole conference was sponsored by theives with stolen money.

BB.

This is rubbish, I've been responsible for the whole sponsorship side of the conference since day one, to say that stolen money was used for the conference is wrong in every way, unless you're calling me a thief.

[disclaimer201]

If as many expect, the Intersango trio are eventually proven to be liable/culpable, it could be argued that the whole conference was sponsored by theives with stolen money.

BB.

This is rubbish, I've been responsible for the whole sponsorship side of the conference since day one, to say that stolen money was used for the conference is wrong in every way, unless you're calling me a thief.

This is what you will get if you continue to work together with them, accept it as it is. It isn't even spreading FUD if people tell you it is best to cut all ties with Intersango, you don't want to have angry people show up to wash their dirty laundry right in the workshops.

[Nefario]

If as many expect, the Intersango trio are eventually proven to be liable/culpable, it could be argued that the whole conference was sponsored by theives with stolen money.

BB.

This is rubbish, I've been responsible for the whole sponsorship side of the conference since day one, to say that stolen money was used for the conference is wrong in every way, unless you're calling me a thief.

This is what you will get if you continue to work together with them, accept it as it is. It isn't even spreading FUD if people tell you it is best to cut all ties with Intersango, you don't want to have angry people show up to wash their dirty laundry right in the workshops.

Cutting ties is one thing, accusing me of being a thief is another.

[disclaimer201]

If as many expect, the Intersango trio are eventually proven to be liable/culpable, it could be argued that the whole conference was sponsored by theives with stolen money.

BB.

This is rubbish, I've been responsible for the whole sponsorship side of the conference since day one, to say that stolen money was used for the conference is wrong in every way, unless you're calling me a thief.

This is what you will get if you continue to work together with them, accept it as it is. It isn't even spreading FUD if people tell you it is best to cut all ties with Intersango, you don't want to have angry people show up to wash their dirty laundry right in the workshops.

Cutting ties is one thing, accusing me of being a thief is another.

As I understood it nobody made such an accusation!

[BTCurious]

As I understood it nobody made such an accusation!

Then read the quote you quoted, srsly -_-

it could be argued that the whole conference was sponsored by theives with stolen money.

I've been responsible for the whole sponsorship side of the conference since day one

[tseale]

Mr Seale, please identify Zhou Tong, would you? It spares us another 50 pages of ongoing speculation in 3 different threads. Thank you!

Zhou Tong is exactly who he says he is.

[disclaimer201]

Mr Seale, please identify Zhou Tong, would you? It spares us another 50 pages of ongoing speculation in 3 different threads. Thank you!

Zhou Tong is exactly who he says he is.

Good. Thank you.

[BitBuster]

You are so obsessed with the law, that it would be in your best interest to just quit Bitcoin. No really, fiat is your world. They even fabricate laws as they need. Leave Bitcoin, enter fiat. Otherwise you may even discover that bitcoins are used at silk road, another thing that is most probably not legal.

Personally, I couldn't care less if what Murck is doing is legal or not. However, with multiple law-enforcement investigations said to take place, the investigators may take a more keen interest in the legality of Murck's actions.

This is rubbish, I've been responsible for the whole sponsorship side of the conference since day one, to say that stolen money was used for the conference is wrong in every way, unless you're calling me a thief.

http://www.bitcoin2012.com/sponsorship Intersango is listed at the very top of the page as a sponsor. It's personnel are heavily implicated in a massive bitcoin theft. Therefore it is concievable that if their guilt is proven, stolen funds may have been used to pay for the sponsorship.

Cutting ties is one thing, accusing me of being a thief is another.

Which I was careful not to do, as you appear to be careful not to distance yourself and the conference from individuals at the centre of this controversy.

Zhou Tong is exactly who he says he is.

For the avoidance of doubt, please state which photograph shows Zhou Tong?


BB.

[rjk]

Zhou Tong is exactly who he says he is.

For the avoidance of doubt, please state which photograph shows Zhou Tong?

If he is "exactly who he says he is", then why wouldn't the pictures posted by himself not be of him? If you don't know which ones are which, just look at his posting history to find the correct ones.

[aq]

Mr Seale, please identify Zhou Tong, would you? It spares us another 50 pages of ongoing speculation in 3 different threads. Thank you!

Zhou Tong is exactly who he says he is.

One can already sense now, that Bruno will still not believe it.

[sarpar]

If as many expect, the Intersango trio are eventually proven to be liable/culpable, it could be argued that the whole conference was sponsored by theives with stolen money.

BB.

This is rubbish, I've been responsible for the whole sponsorship side of the conference since day one, to say that stolen money was used for the conference is wrong in every way, unless you're calling me a thief.

This is what you will get if you continue to work together with them, accept it as it is. It isn't even spreading FUD if people tell you it is best to cut all ties with Intersango, you don't want to have angry people show up to wash their dirty laundry right in the workshops.

Cutting ties is one thing, accusing me of being a thief is another.

Then please do so! There is only one way to regain trust in this community: bitcoiners finally have to start making those who scam and act irresponsibly with others funds outkast.
The total lack of moral values let you greedy folk do business with whomever comes along as long as you are yourself not affected by their wrongdoing.

Money is power - be wise and challenge the source and destination of your funds. Everything has an effect - use your power for the good.  (I can i.e. not explain the motivation of all those funding the pirate other than by greed )

I am not talking about karma when I warn you that relying on funding by these despicable subjects wont turn out well for you all. Look out for other sources - there is still time!

[sarpar]

Thankfully, Mr. Murck stepped in as a licensed attorney to broker their receipt. He was subjected to a lot of hazing and invasion of privacy here for doing so.

For the 5th time: Under what legal authority is Murck able to receive and transfer stolen goods?.

As far as I can see, Patrick Murck is acting in contact with Tihan Seale, who is the only known individual known to represent the owners of Bitcoinica LP.

That gives him enough authority to recover whatever possessions that used to be in Bitcoinica's care when whoever stole these says he wants to return [part of] it.

Umm wasn't Tihan fired at one point by the "Wendon Group" ? In the leaked emails he is very much claiming to be so. In light of that I don't really see how you guys can take anything he says at face value.

@Tihan: indeed clarification needed. Are you still acting on behalf of the Wendon Group?

[BitBuster]

If he is "exactly who he says he is", then why wouldn't the pictures posted by himself not be of him? If you don't know which ones are which, just look at his posting history to find the correct ones.

For the avoidance of doubt.

Having met Zhou, Tihan should be able to say/repost which photo is of him.
Without having to first contact Zhou on this forum or otherwise.


BB.

[Nefario]

This is rubbish, I've been responsible for the whole sponsorship side of the conference since day one, to say that stolen money was used for the conference is wrong in every way, unless you're calling me a thief.

http://www.bitcoin2012.com/sponsorship Intersango is listed at the very top of the page as a sponsor. It's personnel are heavily implicated in a massive bitcoin theft. Therefore it is concievable that if their guilt is proven, stolen funds may have been used to pay for the sponsorship.

BB.

They were sponsors since February when the planning for the conference began, before there was any involvement with bitcoinica.

There is no chance of any stolen funds being involved with the event.

[BitBuster]

So Intersango do not owe any funds for sponsorship at all? Regardless, you should refund their sponsorship money and remove them from the view/organisation of the conference. This is not a personal vendetta, just pragmatic action so that, whatever the legal outcome, the conference is not brought into disrepute as it has been so far and will continue to be otherwise.


BB.

[sarpar]

So Intersango do not owe any funds for sponsorship at all? Regardless, you should refund their sponsorship money and remove them from the view/organisation of the conference. This is not a personal vendetta, just pragmatic action so that, whatever the legal outcome, the conference is not brought into disrepute as it has been so far and will continue to be otherwise.


BB.

+1 how much funding would you need to replace them?

[disclaimer201]

If he is "exactly who he says he is", then why wouldn't the pictures posted by himself not be of him? If you don't know which ones are which, just look at his posting history to find the correct ones.

For the avoidance of doubt.

Having met Zhou, Tihan should be able to say/repost which photo is of him.
Without having to first contact Zhou on this forum or otherwise.


BB.

This is a non-issue now. Tihan didn't know the newly posted pictures and Zhou's pictures of himself were posted long ago. Only if you followed the story just recently would this be an issue. Now that Tihan says Zhou is who he says he is, namely a freshman student with an I-toy and a 1k physical gold bitcoin, I'm certain that's how it is. Look for other clues, Sherlocks.

[disclaimer201]

This is rubbish, I've been responsible for the whole sponsorship side of the conference since day one, to say that stolen money was used for the conference is wrong in every way, unless you're calling me a thief.

http://www.bitcoin2012.com/sponsorship Intersango is listed at the very top of the page as a sponsor. It's personnel are heavily implicated in a massive bitcoin theft. Therefore it is concievable that if their guilt is proven, stolen funds may have been used to pay for the sponsorship.

BB.

They were sponsors since February when the planning for the conference began, before there was any involvement with bitcoinica.

There is no chance of any stolen funds being involved with the event.

Good. You only need to worry about the conference's reputation by mere association then. It would be advisable to remove everything Intersango-related from flyers, posters and websites.

[ninjarobot]

Umm wasn't Tihan fired at one point by the "Wendon Group" ? In the leaked emails he is very much claiming to be so. In light of that I don't really see how you guys can take anything he says at face value.

@Tihan: indeed clarification needed. Are you still acting on behalf of the Wendon Group?

I emailed with Tihan on July 29 and he addressed some of these questions, so I hope he does not mind me sharing his clarifications here:

The idea that I've been fired is one of many false rumors perpetuated by the Consultancy. This disaster will negatively impact my livelihood. However, I have not had a "boss" since 1999

Wendon Group is an investment fund -- an inanimate pile of dollars. It does not have the ability to 'care' about Bitcoinica customers. I can and do. The return of funds to customers has been my first priority since the theft.

Tihan really seems to be acting in the best interest of Bitcoinica customers here. Of course; time will tell, but at least I have some hope again.

[bittenbob]

So Intersango do not owe any funds for sponsorship at all? Regardless, you should refund their sponsorship money and remove them from the view/organisation of the conference. This is not a personal vendetta, just pragmatic action so that, whatever the legal outcome, the conference is not brought into disrepute as it has been so far and will continue to be otherwise.


BB.

+1 how much funding would you need to replace them?

I think we would be willing to raise funds to refund Intersango just so they won't be affiliated with the conference. Of course we would have to know how much to raise.

[cst]

sub

Are you joking? :P https://bitcointalk.org/index.php?topic=90136.0

[check_status]

What I am really (and selfishly) hoping for is that it will give a legal test case and President of the status of Bitcoin in New Zealand Law .  It will probably have to go all the way to the High Court to do it, and New Zealand is probably the only country in the world you can do it in at the moment (I wont bore you with New Zealand Law and current event's  Roll Eyes ) .

From there it is a simple step to Commonwealth Law because of the quirks of how New Zealand law works and from there to International Law will probably have to involve another president case (or possibly even the same one).

I humbly suggest everyone get behind this bandwagon.

I don't know why you want a bandwagon to become president? Can you vote for a vehicle in New Zealand? 'Fiat Bandwagon for President.'

Not to be confused with President, nor [the plural] with "precedence"

In common law legal systems, a precedent or authority is a principle or rule established in a previous legal case that is either binding on or persuasive for a court or other tribunal when deciding subsequent cases with similar issues or facts.

http://en.wikipedia.org/wiki/Precedent

Mr Tihan Seale, do you collect Chinese relics?

lol

Mr Seale, please identify Zhou Tong, would you? It spares us another 50 pages of ongoing speculation in 3 different threads. Thank you!

Zhou Tong is exactly who he says he is.

Good. Thank you.

Tihan didn't answer your question, but provided an answer that is supportive of Zhou Tong. Some people are easily satisfied by deflective answers. If Zhou Tong has another real world identity, Zhou Tong being a pseudonym, then Tihan's deflective answer is protecting that real worl identity.

The way this is going, it looks like Zhou Tong will become the hero. You couldn't write a story like this if you tried...or could you?

[NRF]

I don't know why you want a bandwagon to become president? Can you vote for a vehicle in New Zealand? 'Fiat Bandwagon for President.'

I wish I did not have a mouth full of hot coffee when I read that.......

I blame the spell check in chrome. 

[disclaimer201]

Mr Seale, please identify Zhou Tong, would you? It spares us another 50 pages of ongoing speculation in 3 different threads. Thank you!

Zhou Tong is exactly who he says he is.

Good. Thank you.

Tihan didn't answer your question, but provided an answer that is supportive of Zhou Tong. Some people are easily satisfied by deflective answers. If Zhou Tong has another real world identity, Zhou Tong being a pseudonym, then Tihan's deflective answer is protecting that real worl identity.

The way this is going, it looks like Zhou Tong will become the hero. You couldn't write a story like this if you tried...or could you?

Zhou has never claimed to be anyone else but the person in the photos he sent for the entire time before and after the hacks. Since this is the case, Seale's answer is not necessarily deflective. Of course you could still claim Zhou was an invention ever since, but what motives should Seale have to protect him? I think he would be better off telling everyone it was a made up identity if this was the case.

[Transisto]

Time to rigorously boycott Intersango and the "Bitcoin Conference" then?

BB.

...
Chiming in on the whole Bitcoin conference (www.bitcoin2012.com) boycot idea, just to let you know that the Intersango guys are not the only ones involved in organising it.

If it's boycotted, all the work, time, effort, reputation and money that I and others(who are not involved with Bitcoinica) have already put into organising this conference will be destroyed. The venue has been paid for, awesome speakers have been arranged, over 100 tickets have been sold(and continuing fast, it's going to be sold out), and we've already got loads of sponsors (small bitcoin businesses mostly).

This event is going to be monumentous, as well as being a fantastic opportunity for bitcoiners to meet up, watch the talks, take part in the workshops, it's going to be a boon for bitcoin related businesses and some major PR for bitcoin itself.

If you guys want to turn this into a Bitcoinica rage then you'll destroy all this(other peoples money) and get nothing in return as a result.

Don't mix the conference up with the Bitcoinica affair, it will bring no good for anyone. It's going to be a great, historical event for bitcoin, and soon enough the world in general.

Nefario.

Let make this clear,

A boycott does not directly mean destroying "all the work, time, effort, reputation and money"...

Again,
While they are doing this they aren't doing what they should be doing. (to the detriment of a Bitcoinica resolution.)

If it hasn't come to mind yet that Amir's works toward the conference or anything else was affecting the members of the community and that it would directly affect the conference you've been burring your head in the same sand as these guys.

If you want to argue that they should ignore all Bitcoinica creditors and keep the money then do so in another thread and don't forget to go through the 300+ pages related to this fiasco before saying a word.

Cutting all ties with them at this point would be minimal a step to improve public perception of the conference and bitcoin in general.
It doesn't remove the fact that you may, with knowledge of the fiasco, have been working with these guys for months, accepting their work without question, show a lack of support to the affected members (even if their work seemed benevolent).


To give you a hint of how I feel; When I was looking at this video, http://www.youtube.com/watch?v=EQ2rb4pHH1g&feature=player_detailpage#t=682s  I was thinking : " How can they be listening to this guy talking about something else ? and ...  They must know about it
There are priorities in life. Now you know.

"monumentous" is the time wasted by this community to this fiasco, monumentous is the cost of their inactions, monumentous ...ain't even a word.

Can you imagine the amount of stress they put onto the thousands of bitcoinica customers ?  I personally have canceled contracts to work on this, I have lost sleep, I have spent hundreds of hours following this and attempting to get into contact with them.  They're withholding some insane amount of my lifesavings and can't be bothered to give an update.

Anybody benefiting from their time/work in anyways without doing anything to solve this should be ashamed.

[LoupGaroux]

Okay, no boycott, but no public forum for the Intersango Gang, and their logo comes off the website today. If you want the conference to be about healing and community, you don't welcome sewer rats as prodigal sons. Keep their money, god knows they have taken enough off the community to support lavish vacations for themselves instead of working on solving the problem that they created.

[ninjarobot]

Okay, no boycott, but no public forum for the Intersango Gang, and their logo comes off the website today. If you want the conference to be about healing and community, you don't welcome sewer rats as prodigal sons. Keep their money, god knows they have taken enough off the community to support lavish vacations for themselves instead of working on solving the problem that they created.

Isn't that a bit harsh? After all, some of the Bitclown Consultancy members spent 3 days eating bad muesli and cheap milk.

[bitcoinBull]

@All
The consultancy team failed and harmed a large fraction of the Bitcoin community. I ask you all to boycott all their ongoing ventures e.g. Intersango, the London Bitcoin conference, personal trades, open source projects etc.

The bitcoin team isn't going to simply oppose their source code contribution to the project. Doing so is quite self-harming. Given that the conference is a big chance for the bitcoin community to get together and build business tie and relationship, so to deny going there is self harming.

Intersango is a bitcoin exchange among many, so boycotting it doesn't cause much self-harm. We just use mtgox instead.

Just a note that, last time I looked, I could only find about four lines of source code from any member of "bitcoin consultancy" in the official/core bitcoin project maintained by gavin. It was just some bash script from Amir to check the OS and run the correct client. Since then, Amir has been working on his own client and library, not submitting pull requests to the official repository, as far I know.

[blakdawg]

Thankfully they have ignored your for-the-5th-time question and the funds are now safe at mtgox.

I think they would be a lot safer if they were held in an offline wallet, or converted to a fiat currency and deposited with an institution with insured deposits.

Is there any reason to believe that Mt Gox isn't today exactly what/where Bitcoinica was 6 months ago?

[Serge]

Thankfully they have ignored your for-the-5th-time question and the funds are now safe at mtgox.

I think they would be a lot safer if they were held in an offline wallet, or converted to a fiat currency and deposited with an institution with insured deposits.

Is there any reason to believe that Mt Gox isn't today exactly what/where Bitcoinica was 6 months ago?

you got it wrong
Bitcoinica is nowhere near where Mtgox was a year ago and never has

[bitcoinBull]

Umm wasn't Tihan fired at one point by the "Wendon Group" ? In the leaked emails he is very much claiming to be so. In light of that I don't really see how you guys can take anything he says at face value.

@Tihan: indeed clarification needed. Are you still acting on behalf of the Wendon Group?

I emailed with Tihan on July 29 and he addressed some of these questions, so I hope he does not mind me sharing his clarifications here:

The idea that I've been fired is one of many false rumors perpetuated by the Consultancy. This disaster will negatively impact my livelihood. However, I have not had a "boss" since 1999

Wendon Group is an investment fund -- an inanimate pile of dollars. It does not have the ability to 'care' about Bitcoinica customers. I can and do. The return of funds to customers has been my first priority since the theft.

Tihan really seems to be acting in the best interest of Bitcoinica customers here. Of course; time will tell, but at least I have some hope again.

Thanks for this.

Now that 15k BTC is with MtGox (where is the rest? wasn't disclosed if there was still any in cold storage or if all of it was on mtgox), I'm curious about the further role of Patrick Murck. Hopefully zhoutong is still working with him on getting the rest of the funds from Chen Jianhai, BTC and USD.

Acting in its capacity as creditor to Bitcoinica LP, the Wendon Group investment fund will appoint a receiver under New Zealand law. This has been an option of last resort which is now unavoidable. Under receivership, a licensed and insured specialist will replace the Consultancy as the designated authority. Upon satisfaction of secured creditor interests, the company will proceed to liquidation in which remaining funds are distributed. Without Consultancy cooperation, this is the only ready way forward.

Is there any possibility for Patrick Murck to meet the requirements of New Zealand law, so that Wendon Group can appoint him as receiver? Maybe Mr. Murck is willing to handle the claims process, and Bitcoinica Consultancy could hand over all the filed claims and their work on separating the valid from the fraudulent.

Tihan, you also previously stated that the fund would be proceeding with legal action against the Bitcoinica Consultancy. Is the fund still planning to do that?

[blakdawg]

Thankfully they have ignored your for-the-5th-time question and the funds are now safe at mtgox.

I think they would be a lot safer if they were held in an offline wallet, or converted to a fiat currency and deposited with an institution with insured deposits.

Is there any reason to believe that Mt Gox isn't today exactly what/where Bitcoinica was 6 months ago?

you got it wrong
Bitcoinica is nowhere near where Mtgox was a year ago and never was

That's great news! Perhaps you could explain what facts lead you to that conclusion, so the rest of us could feel as confident.

[Transisto]

...
Now that 15k BTC is with MtGox (where is the rest? wasn't disclosed if there was still any in cold storage or if all of it was on mtgox), I'm curious about the further role of Patrick Murck. Hopefully zhoutong is still working with him on getting the rest of the funds from Chen Jianhai, BTC and USD.
...

I is apparently "well documented in various places (it's all in a frozen mtgox account)"

Code:

01[15:23] <Transist-> Phantom, unrelated to intersango, Some of creditors, myself included, would like to know what kind of security is protecting the remaining assets ?  You may understand we are worried given Genjix track record on security.
01[15:23] <Transist-> Thank you
[15:24] <@phantomcircuit> Transist-, that is well documented in various places (it's all in a frozen mtgox account), also im tired of telling you that this is an inappropriate method of communications
03[15:24] * phantomcircuit sets mode: +b *Transis*!*@*
03[15:25] * You were kicked by phantomcircuit (Transist-)
Session Close: Thu Aug 02 15:25:02 2012

[Transisto]

Thankfully they have ignored your for-the-5th-time question and the funds are now safe at mtgox.

I think they would be a lot safer if they were held in an offline wallet, or converted to a fiat currency and deposited with an institution with insured deposits.

Is there any reason to believe that Mt Gox isn't today exactly what/where Bitcoinica was 6 months ago?

you got it wrong
Bitcoinica is nowhere near where Mtgox was a year ago and never was

That's great news! Perhaps you could explain what facts lead you to that conclusion, so the rest of us could feel as confident.

Do you think we care to challenge MtGox security at this time ? as long as it's not in Genjix - PhantomC hands I'm fine with it.

[Serge]

Thankfully they have ignored your for-the-5th-time question and the funds are now safe at mtgox.

I think they would be a lot safer if they were held in an offline wallet, or converted to a fiat currency and deposited with an institution with insured deposits.

Is there any reason to believe that Mt Gox isn't today exactly what/where Bitcoinica was 6 months ago?

you got it wrong
Bitcoinica is nowhere near where Mtgox was a year ago and never was

That's great news! Perhaps you could explain what facts lead you to that conclusion, so the rest of us could feel as confident.

Mtgox survived one or two hacks last summer, they've upped their security probably withstanding more attempts since then than any other bitcoin online business. They're DDOS resistant to capacity that technology allows. They've had backups and were able to rollback their books after last summer's hack. And they were one of the first using cold storage for majority of bitcoins on their exchange. I'd say out of amateur company last year they've grew into one of most if not the most technologically solid bitcoin companies today. Other than deposit/withdraw issues mainly due to interfacing with fiat-ruled world they've upheld their reputation as an exchange on high level.

Bitcoinica on another hand?  I've lost count how many times it's been successfully hacked into and stolen from, there were so much fail, negligence, hindsight to security that it is not even comparable with Mtgox. Apples and oranges.

[kiba]

Mtgox survived one or two hacks last summer, they've upped their security probably withstanding more attempts since then than any other bitcoin online business. They're DDOS resistant to capacity that technology allows. They've had backups and were able to rollback their books after last summer's hack. And they were one of the first using cold storage for majority of bitcoins on their exchange. I'd say out of amateur company last year they've grew into one of most if not the most technologically solid bitcoin companies today. Other than deposit/withdraw issues mainly due to interfacing with fiat-ruled world they've upheld their reputation as an exchange on high level.

Bitcoinica on another hand?  I've lost count have many times it's been successfully hacked into and stolen from, there was some much fail, negligence, hindsight to security that it is not even comparable with Mtgox. Apples and oranges.

MtGox was also hated by a lot of bitcoiners and some forum thread about mtgox raged for 50+ pages, just like bitcoinica. They also have a meme invented against them. It was called being "goxed".

However, mtgox survives/resolve the crisis, and people move on with their life, and the hatred, if not mistrust, disappears.

Bitcoinica consultancy on the other hand, just utterly fall apart after zhoutong/friend_of_zhoutong stole the money.

Only in crisis do people discover the true strength/weakness of an organization and the characters of the people who run it. If an exchange never been through the baptism of crisis, you don't know their integrity.

(To be fair, mtgox never have their money stolen by a possible insider who seems all trustworthy)

[repentance]

Tihan, is there any indication yet when USD might start being recovered?  I know it was stated earlier that another 5000 BTC will be returned after the USD have been returned, but I also believe it's important for the community to see that the recovered funds are increasing and that the recovery process itself hasn't stalled.

[repentance]

I is apparently "well documented in various places (it's all in a frozen mtgox account)"

Code:

01[15:23] <Transist-> Phantom, unrelated to intersango, Some of creditors, myself included, would like to know what kind of security is protecting the remaining assets ?  You may understand we are worried given Genjix track record on security.
01[15:23] <Transist-> Thank you
[15:24] <@phantomcircuit> Transist-, that is well documented in various places (it's all in a frozen mtgox account), also im tired of telling you that this is an inappropriate method of communications
03[15:24] * phantomcircuit sets mode: +b *Transis*!*@*
03[15:25] * You were kicked by phantomcircuit (Transist-)
Session Close: Thu Aug 02 15:25:02 2012

Oh my.  Perhaps Patrick would care to enlighten users as to what he does regard as an appropriate method of communication.

[disclaimer201]

What an asshole that is. He makes me sick.

[LoupGaroux]

I is apparently "well documented in various places (it's all in a frozen mtgox account)"

Code:

01[15:23] <Transist-> Phantom, unrelated to intersango, Some of creditors, myself included, would like to know what kind of security is protecting the remaining assets ?  You may understand we are worried given Genjix track record on security.
01[15:23] <Transist-> Thank you
[15:24] <@phantomcircuit> Transist-, that is well documented in various places (it's all in a frozen mtgox account), also im tired of telling you that this is an inappropriate method of communications
03[15:24] * phantomcircuit sets mode: +b *Transis*!*@*
03[15:25] * You were kicked by phantomcircuit (Transist-)
Session Close: Thu Aug 02 15:25:02 2012

Oh my.  Perhaps Patrick would care to enlighten users as to what he does regard as an appropriate method of communication.

I guess until we show him respect, we are all expected to just remain silent so that he can enjoy his well-earned vacation on YOUR funds after he spent so much time dodging the issues about YOUR funds.

Or is that "fucking respect"? I forget, it was so many embarrassing moments ago for the Intersango Gango Clown Patrol.

[BitBuster]

I guess Patrick is so cocky and disrespectful because he believes that he will not be held to account or punished for his actions?

Surely such a "Security Expert" who boasts on the Intersango website about his supposed technical ability and "courteous" support would want to legally clear his name with dignity, rather than just lashing out at those who want answers?


BB.

[LoupGaroux]

One would think so, but then one would be confronted with the reality of what the Intersango Gango is really all about. Shame, shame shame.

[Vladimir]

I is apparently "well documented in various places (it's all in a frozen mtgox account)"

Code:

01[15:23] <Transist-> Phantom, unrelated to intersango, Some of creditors, myself included, would like to know what kind of security is protecting the remaining assets ?  You may understand we are worried given Genjix track record on security.
01[15:23] <Transist-> Thank you
[15:24] <@phantomcircuit> Transist-, that is well documented in various places (it's all in a frozen mtgox account), also im tired of telling you that this is an inappropriate method of communications
03[15:24] * phantomcircuit sets mode: +b *Transis*!*@*
03[15:25] * You were kicked by phantomcircuit (Transist-)
Session Close: Thu Aug 02 15:25:02 2012

Disgusting! And he wants some respect somehow! What a horrible human being.

[repentance]

I is apparently "well documented in various places (it's all in a frozen mtgox account)"

Code:

01[15:23] <Transist-> Phantom, unrelated to intersango, Some of creditors, myself included, would like to know what kind of security is protecting the remaining assets ?  You may understand we are worried given Genjix track record on security.
01[15:23] <Transist-> Thank you
[15:24] <@phantomcircuit> Transist-, that is well documented in various places (it's all in a frozen mtgox account), also im tired of telling you that this is an inappropriate method of communications
03[15:24] * phantomcircuit sets mode: +b *Transis*!*@*
03[15:25] * You were kicked by phantomcircuit (Transist-)
Session Close: Thu Aug 02 15:25:02 2012

Disgusting! And he wants some respect somehow! What a horrible human being.

It will certainly be interesting to see how he responds to the Bitcoinica LP liquidator's requests for information.

[bittenbob]

I is apparently "well documented in various places (it's all in a frozen mtgox account)"

Code:

01[15:23] <Transist-> Phantom, unrelated to intersango, Some of creditors, myself included, would like to know what kind of security is protecting the remaining assets ?  You may understand we are worried given Genjix track record on security.
01[15:23] <Transist-> Thank you
[15:24] <@phantomcircuit> Transist-, that is well documented in various places (it's all in a frozen mtgox account), also im tired of telling you that this is an inappropriate method of communications
03[15:24] * phantomcircuit sets mode: +b *Transis*!*@*
03[15:25] * You were kicked by phantomcircuit (Transist-)
Session Close: Thu Aug 02 15:25:02 2012

Disgusting! And he wants some respect somehow! What a horrible human being.

It will certainly be interesting to see how he responds to the Bitcoinica LP liquidator's requests for information.

He certainly seems to have no problem leaking someone else's password at Intersango. It should be interesting to see how he responds to legal requests indeed.

https://bitcointalk.org/index.php?topic=98622.0

[repentance]

Any update on how the recovery of further funds is progressing?

[Bitcoin Oz]

I is apparently "well documented in various places (it's all in a frozen mtgox account)"

Code:

01[15:23] <Transist-> Phantom, unrelated to intersango, Some of creditors, myself included, would like to know what kind of security is protecting the remaining assets ?  You may understand we are worried given Genjix track record on security.
01[15:23] <Transist-> Thank you
[15:24] <@phantomcircuit> Transist-, that is well documented in various places (it's all in a frozen mtgox account), also im tired of telling you that this is an inappropriate method of communications
03[15:24] * phantomcircuit sets mode: +b *Transis*!*@*
03[15:25] * You were kicked by phantomcircuit (Transist-)
Session Close: Thu Aug 02 15:25:02 2012

Disgusting! And he wants some respect somehow! What a horrible human being.

It will certainly be interesting to see how he responds to the Bitcoinica LP liquidator's requests for information.

He certainly seems to have no problem leaking someone else's password at Intersango. It should be interesting to see how he responds to legal requests indeed.

https://bitcointalk.org/index.php?topic=98622.0

He will tell the lawyer to respect him 

[ErebusBat]

He will tell the lawyer to fucking respect him 

FTFY

[Bitcoin Oz]

He will tell the lawyer to fucking respect him 

FTFY

indeed 

[Phinnaeus Gage]

Any update on how the recovery of further funds is progressing?

Kinda limbo, but for sure don't expect to see anything in the likes of...

[dancingnancy]

Is there any update on this stuff guys?  Seems like it has been a while since we have heard anything new. 

[Maged]

Is there any update on this stuff guys?  Seems like it has been a while since we have heard anything new. 

It's been less than a week... Of course, with all of the hackings/other drama, I can see how you've come to expect more (bad) news every few days/hours.

[lonelyminer (Peter Šurda)]

Waiting for the receiver being appointed. I asked Tihan and he said it will be soon and will be announced.

I am not involved in the process other than being one of the creditors, but my recommendation for the time being is to collect all evidence you have for supporting your claim and be ready to provide it in a form that the receiver requests.

[Phinnaeus Gage]

Waiting for the receiver being appointed. I asked Tihan and he said it will be soon and will be announced.

I am not involved in the process other than being one of the creditors, but my recommendation for the time being is to collect all evidence you have for supporting your claim and be ready to provide it in a form that the receiver requests.

I just realized that this is you (far left):

[labestiol]

Waiting for the receiver being appointed. I asked Tihan and he said it will be soon and will be announced.

I am not involved in the process other than being one of the creditors, but my recommendation for the time being is to collect all evidence you have for supporting your claim and be ready to provide it in a form that the receiver requests.

I was wondering about that, what info should we prepare for the receiver.
In my case, i only used BTC to move money in and out of bitcoinica.
Should I provide proof of ownership of incoming BTC addresses ? (If so how ? Is there tools for the receiver to check that ?)
Are the mails of any use ? (is there a way for gmail to prove that the mail was sent by bitcoinica and not tempered with ?)

[Transisto]

No news, just despair.

From : Life after Bitcoinica,,, as a creditor.

...What they certainly don't understand is that, right now, some people cannot live healthily after having invested hearth and money blindly into what they strongly believe being the grandest of projects.

I am not asking them to process the payouts, I am merely asking for a sign of hope.
We don't have confidence that the funds are safe.
We don't have confidence that the incomplete data that could help processing claim is safe.
We don't have confidence that the list of who has been paid is safe.

If safe, ... to what extent ... ?  If both of you die, would that still be safe ? (not secure)

No backup, no security, no communication and being arrogant on top of that. How else than worried should we be feeling ?
...

[Kupsi]

(is there a way for gmail to prove that the mail was sent by bitcoinica and not tempered with ?)

You can see the originating server/ip address here:

[lonelyminer (Peter Šurda)]

I just realized that this is you (far left):

Congratulations Phinn, outstanding detective work. You however missed that I'm visible and hearable on the video recordings as well: http://wiki.london.hackspace.org.uk/view/Project:Bitcoin/Bitcoin_Weekend_2011#Recordings.

[repentance]

Is there any update on this stuff guys?  Seems like it has been a while since we have heard anything new. 

It's been less than a week... Of course, with all of the hackings/other drama, I can see how you've come to expect more (bad) news every few days/hours.

It's not necessarily matter of expecting bad news, but wanting to know how long "Chen" will be given to return funds before a receiver is appointed. The possibility exists that "Chen" will not return the full amount promised, so there needs to be a plan to proceed to receivership and liquidation at a certain point in time regardless of whether or not "Chen" has returned the funds by then.  As it's somewhat difficult to believe that a multi-millionaire could not produce $200,000 ($140,000 + 5000 BTC) within a couple of weeks, that timeline should be weeks away at most.

[sarpar]

It might be that some of you missed this:

Crap. I deleted data I thought wasn't relevent and now I find how they were linked. ~mumblemumble~
*Microsoft Corp. acquired Oslo-based Fast Search & Transfer (FAST)*

Now, Microsoft.com and fda.hhs.gov connect.

And don't forget that AurumXchange and MagicalTux claimed that I worked for Microsoft Singapore at some point in time in 2011.

please contribute relevant information: how is the status of the fiat money return?

Doing that. Finishing by next week.

To my best knowledge the progress of fund recovery has nothing much to do with Bitcoinica fund returns. I spend most of my time waiting for Bitcoinica, bankers, lawyers and the hacker. So contributing irrelevant information doesn't slow down the fund returns to customers. Don't worry!

[repentance]

It might be that some of you missed this:

Crap. I deleted data I thought wasn't relevent and now I find how they were linked. ~mumblemumble~
*Microsoft Corp. acquired Oslo-based Fast Search & Transfer (FAST)*

Now, Microsoft.com and fda.hhs.gov connect.

And don't forget that AurumXchange and MagicalTux claimed that I worked for Microsoft Singapore at some point in time in 2011.

please contribute relevant information: how is the status of the fiat money return?

Doing that. Finishing by next week.

To my best knowledge the progress of fund recovery has nothing much to do with Bitcoinica fund returns. I spend most of my time waiting for Bitcoinica, bankers, lawyers and the hacker. So contributing irrelevant information doesn't slow down the fund returns to customers. Don't worry!

Hopefully we can look forward in the next couple of days to confirmation by Patrick Murck that the funds are now safely in his possession.

[aq]

I just realized that this is you (far left):

Congratulations Phinn, outstanding detective work. You however missed that I'm visible and hearable on the video recordings as well: http://wiki.london.hackspace.org.uk/view/Project:Bitcoin/Bitcoin_Weekend_2011#Recordings.

lonelyminer, I think you missed the point. Since when does Bruno believe that someone is who he actually is?

[Transisto]

...
lonelyminer, I think you missed the point. Since when does Bruno believe that someone is who he actually is?

Your point ?

[Phinnaeus Gage]

I just realized that this is you (far left):

Congratulations Phinn, outstanding detective work. You however missed that I'm visible and hearable on the video recordings as well: http://wiki.london.hackspace.org.uk/view/Project:Bitcoin/Bitcoin_Weekend_2011#Recordings.

lonelyminer, I think you missed the point. Since when does Bruno believe that someone is who he actually is?

I'm not sure what all the fuss is about, for all I did was make a comment on a recent find that is NOT part of any ongoing  investigations. Please accept my apology if you somehow took it the wrong way.

Later, bud.

~Bruno~

[dopamine]

Any updates?

[ninjarobot]

please contribute relevant information: how is the status of the fiat money return?

Doing that. Finishing by next week.

Zhou, the week is coming to an end. What is the status regarding the return of stolen funds?

[thest0ckman]

on and on this goes. what a waste of time. am i ever going to get my money back?

wendon (or whoever is supposed to refund my money now) my screen name here matches my bitcoinica id.

put me on the list for a refund please. i was marked as accurate.

[repentance]

on and on this goes. what a waste of time. am i ever going to get my money back?

wendon (or whoever is supposed to refund my money now) my screen name here matches my bitcoinica id.

put me on the list for a refund please. i was marked as accurate.

I'm sure that no matter what has already been posted Tihan is still trying to find a means of resolving this without putting Bitcoinica into liquidation, but if the partnership does end up being liquidated those wishing to make a claim will have to do so directly to the liquidator using the appropriate claim form.

[HorseRider]

Is there any updates?

[sarpar]

please contribute relevant information: how is the status of the fiat money return?

Doing that. Finishing by next week.

Zhou, the week is coming to an end. What is the status regarding the return of stolen funds?

Zhou: one week is over - where is the update?

[LoupGaroux]

Anybody want to make book on when the first restitution in this matter will be made?  My money would be on the 11th of Never.

Why bother Zhou about this? He and Notorious Relic Dealer Chen are happily sitting in a cave counting the coins they have fleeced you of, while the Gwailo Clown Patrol is stuck holding the bag and looking more and more pathetic by the day. Realize that with the big dogs throwing this into Court in California, no liquidator is going to be able to disburse a single satoshi, penny or euro-cent in recovery until that matter is finished, and that will be years and a whole lot more dollars that the Intersango Gango can come up with from now.

[repentance]

Anybody want to make book on when the first restitution in this matter will be made?  My money would be on the 11th of Never.

Why bother Zhou about this? He and Notorious Relic Dealer Chen are happily sitting in a cave counting the coins they have fleeced you of, while the Gwailo Clown Patrol is stuck holding the bag and looking more and more pathetic by the day. Realize that with the big dogs throwing this into Court in California, no liquidator is going to be able to disburse a single satoshi, penny or euro-cent in recovery until that matter is finished, and that will be years and a whole lot more dollars that the Intersango Gango can come up with from now.

A liquidator doesn't have to wait until foreign legal action is settled.  They'll distribute the estate in the manner laid down by NZ law and after that no-one can pursue for any deficiency in NZ (unless they can establish personal liability on the part of the directors, but the directors have no known NZ assets anyway), but creditors can still pursue deficiencies in other jurisdictions.  

It's worth noting that the creditors' petition doesn't seek to have a lien placed on Bitcoinica's MtGox or bank accounts.

On another note, I've just been on the phone with NZ's Insolvency and Trustee Service who confirmed that there are no barriers to unsecured overseas creditors lodging claims in a New Zealand company liquidation (including a limited partnership liquidation).

[virtuallylaw]

Hi all and sorry for the wait.

I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.

Best,
Patrick

[MemoryDealers]

It should also be made clear that a lot of funds are still missing.

Zhou,  I expect the hacker to come up with the missing funds,  or at the very least you to turn over all his contact details so the appropriate actions can be taken.

[repentance]

Hi all and sorry for the wait.

I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.

Best,
Patrick

I thought Zhou promised the return of USD 140,000.

It's good to hear that a substantial amount of funds have been recovered and that this mess can now proceed to receivership and liquidation. It's unfortunate, however, that the perpetrator of the theft is still being shielded from legal consequence.

[virtuallylaw]

Hi all and sorry for the wait.

I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.

Best,
Patrick

I thought Zhou promised the return of USD 140,000.

It's good to hear that a substantial amount of funds have been recovered and that this mess can now proceed to receivership and liquidation. It's unfortunate, however, that the perpetrator of the theft is still being shielded from legal consequence.

You are correct that Zhou stated $140,000. My understanding is that the additional $40,000 includes funds frozen (rightly so) at ArumXchange. I would hope that Zhou would cooperate with authorities in apprehending and prosecuting the hacker.

[proudhon]

Hi all and sorry for the wait.

I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.

Best,
Patrick

Ok, so 20kBTCs almost covers Roger Ver's bitcoins.  So that's one down, almost.

[MemoryDealers]

My point is that more funds were stolen by the hacker than what Zhou has promised to return.
The hacker needs to refund the total amount that was stolen ASAP.

[Bitcoin Oz]

Hi all and sorry for the wait.

I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.

Best,
Patrick

So he kept $40 000 for himself or am I mistaken ?

[repentance]

You are correct that Zhou stated $140,000. My understanding is that the additional $40,000 includes funds frozen (rightly so) at ArumXchange. I would hope that Zhou would cooperate with authorities in apprehending and prosecuting the hacker.

Zhou has misinformed you.  He has clearly stated here on multiple occasions that the $40,000 which AurumXchange has frozen is from a transaction he conducted on behalf of a friend and that those funds have nothing to do with the hacker.  AurumXchange has frozen an additional $5,000 in funds which are presumed to be related to the hack and which are in an account which Zhou claims was opened without his knowledge using an email account belonging to him.

I realise that your legal involvement does not extend beyond ensuring the recovered funds are secured until control of the assets is passed into receivership and liquidation, but I wanted to clarify for you why you may be asked questions about why the amount recovered is less than what was promised by Zhou.

[Bitcoin Oz]

You are correct that Zhou stated $140,000. My understanding is that the additional $40,000 includes funds frozen (rightly so) at ArumXchange. I would hope that Zhou would cooperate with authorities in apprehending and prosecuting the hacker.

Zhou has misinformed you.  He has clearly stated here on multiple occasions that the $40,000 which AurumXchange has frozen is from a transaction he conducted on behalf of a friend and that those funds have nothing to do with the hacker.  AurumXchange has frozen an additional $5,000 in funds which are presumed to be related to the hack and which are in an account which Zhou claims was opened without his knowledge using an email account belonging to him.

I realise that your legal involvement does not extend beyond ensuring the recovered funds are secured until control of the assets is passed into receivership and liquidation, but I wanted to clarify for you why you may be asked questions about why the amount recovered is less than what was promised by Zhou.

Once again bitcoinica customers are screwed if those funds never get released.

[repentance]

Once again bitcoinica customers are screwed if those funds never get released.

Which is why it's important that the true origin of those funds be determined.  It's not necessary for that to happen in order for receivership and liquidation to proceed, though.

[virtuallylaw]

You are correct that Zhou stated $140,000. My understanding is that the additional $40,000 includes funds frozen (rightly so) at ArumXchange. I would hope that Zhou would cooperate with authorities in apprehending and prosecuting the hacker.

Zhou has misinformed you.  He has clearly stated here on multiple occasions that the $40,000 which AurumXchange has frozen is from a transaction he conducted on behalf of a friend and that those funds have nothing to do with the hacker.  AurumXchange has frozen an additional $5,000 in funds which are presumed to be related to the hack and which are in an account which Zhou claims was opened without his knowledge using an email account belonging to him.

I realise that your legal involvement does not extend beyond ensuring the recovered funds are secured until control of the assets is passed into receivership and liquidation, but I wanted to clarify for you why you may be asked questions about why the amount recovered is less than what was promised by Zhou.

Thanks for the clarification, that is helpful.

[proudhon]

My point is that more funds were stolen by the hacker than what Zhou has promised to return.
The hacker needs to refund the total amount that was stolen ASAP.

But then his hacking will not have been profitable.  But seriously, I was trying to make a similar point, and I hope you end up getting as much back as possible whether voluntarily or from the lawsuit.  I wish you the best of luck.  You've done a tremendous amount of good for the project and it's really shitty to see you get screwed like this.

[Herodes]

You are correct that Zhou stated $140,000. My understanding is that the additional $40,000 includes funds frozen (rightly so) at ArumXchange. I would hope that Zhou would cooperate with authorities in apprehending and prosecuting the hacker.

Zhou has misinformed you.  He has clearly stated here on multiple occasions that the $40,000 which AurumXchange has frozen is from a transaction he conducted on behalf of a friend and that those funds have nothing to do with the hacker.  AurumXchange has frozen an additional $5,000 in funds which are presumed to be related to the hack and which are in an account which Zhou claims was opened without his knowledge using an email account belonging to him.

I realise that your legal involvement does not extend beyond ensuring the recovered funds are secured until control of the assets is passed into receivership and liquidation, but I wanted to clarify for you why you may be asked questions about why the amount recovered is less than what was promised by Zhou.

Yah, it's the friend story again. For being a bitcoiner, repetance, you seem to place an awful lot of fait in the current established system. Are you an accountant by any chance ?

[repentance]

Yah, it's the friend story again. For being a bitcoiner, repetance, you seem to place an awful lot of fait in the current established system. Are you an accountant by any chance ?

Business administration was my field for over thirty years.  I'm semi-retired now.  I don't necessarily put faith in the system, but I find it utterly absurd when people won't use the system to their advantage in instances where there are few other options.  

I'm sure Tihan would much rather have avoided receivership and liquidation, but the Bitcoinica drama needs to be brought to an end and pretty much the only remaining practical way do that is via some kind of formal insolvency.

I suspect Roger et al would prefer to avoid litigation and were hoping that filing a lawsuit would bring people to the negotiating table - but I'm sure they're willing to follow through with the lawsuit if that doesn't happen because it's ludicrous to just shrug your shoulders at the loss of over ~$400,000 and not try to recover it.

I also suspect that many of the people who've posted in these threads didn't believe Zhou's explanations for a minute but were willing to play along with the story as long as there was hope of the stolen funds being returned.

I don't believe that users are acting in their own best interests when time and time again they seek no redress against people/entities which have been responsible for substantial losses.  To date, there have been no meaningful consequences for those who've been responsible for losses of user funds - whether through criminal activity or incompetence.  As long as such losses are acceptable to the community and redress is not sought, Bitcoin services will become an increasingly attractive target for scammers and hackers alike, the losses will continue to mount, and that's going to have a very real impact on people's willingness to invest in and adopt Bitcoin.

[DarkEmi]

I don't believe that users are acting in their own best interests when time and time again they seek no redress against people/entities which have been responsible for substantial losses.  To date, there have been no meaningful consequences for those who've been responsible for losses of user funds - whether through criminal activity or incompetence.  As long as such losses are acceptable to the community and redress is not sought, Bitcoin services will become an increasingly attractive target for scammers and hackers alike and the losses will continue to mount and that's going to have a very real impact on people's willingness to invest in and adopt Bitcoin.

+1

[Vod]

I'm pleased that my threat of bringing him to justice forced Zhou Tong to refund.  We actually held off on engaging the PI once he made the announcement he was returning the majority of funds.  But the relationship is now in place and we WILL hold ZT accountable if he does not return the remaining funds soon.

According to ZT himself, the $40K being held is from personal funds, so he has no reason not to refund the rest of the stolen money.

[lonelyminer (Peter Šurda)]

I'm pleased that my threat of bringing him to justice forced Zhou Tong to refund.

You appear to be confusing correlation with causation.

[rjk]

I'm pleased that my threat of bringing him to justice forced Zhou Tong to refund.

You appear to be confusing correlation with causation.

Very much so.

Aside - I love the mouseover text on the page: "Correlation doesn't imply causation, but it does waggle its eyebrows suggestively and gesture furtively while mouthing 'look over there'."

[BitBuster]

Hi all and sorry for the wait.

I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.

Best,
Patrick

Hi Patrick, please could you answer the question myself and others have asked repeatedly: What/Who has given you the legal authority to take custody of these stolen goods? As I'm sure you can tell, I really would like a clear and full answer on this.

Zhou,  I expect the hacker to come up with the missing funds,  or at the very least you to turn over all his contact details so the appropriate actions can be taken.

As a matter of justice, decency and deterrent, Zhou should turn over any and all of "Chens" details regardless of wether the funds are returned. The theif needs to be hunted down and brought to justice, otherwise the community invites more thefts.


BB.

[rjk]

Hi all and sorry for the wait.

I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.

Best,
Patrick

Hi Patrick, please could you answer the question myself and others have asked repeatedly: What/Who has given you the legal authority to take custody of these stolen goods? As I'm sure you can tell, I really would like a clear and full answer on this.

Even if he doesn't have any such authority (and I'm not convinced that he doesn't), what are you going to do about it? Call the cops?

[aq]

As a matter of justice, decency and deterrent, Zhou should turn over any and all of "Chens" details regardless of wether the funds are returned. The theif needs to be hunted down and brought to justice, otherwise the community invites more thefts.

Actually it would be great if this behavior would invite other thiefs to also return the funds.

[BitBuster]

Its important to know, because before everyone celebrates that funds have been "recovered", they should be sure that this person who claims to be legally capable and permitted, is so. Additionally, is Patrick in any way involved in any of the ongoing legal investigations?

The implications of the answers are obvious and critical to whether any money actually gets back into the wallets of the victims.

aq - You are either insane or complicit. The whole point of punishing the individual(s) is so that they are very much deterred from doing the same again. A theif has lost nothing if all he does is give back what he stole, therefore inviting more theft.


BB.

[aq]

aq - You are either insane or complicit. The whole point of punishing the individual(s) is so that they are very much deterred from doing the same again. A theif has lost nothing if all he does is give back what he stole, therefore inviting more theft.

Because punishing works perfectly, as we can see all over the world. There is not a single crime happening in the real world, because of punishing... 
You must be living in some fantasy world, wake up and face reality.
Bitcoin is money, and there will always be someone who tries to steal it, regardless of punishment.

[BitBuster]

I'm not saying that things are perfect, so stop straw-manning to defend your ridiculous concept. Anyone who thinks that letting theives give back what they stole without actual punishment as a way of deterring and minimizing theft and losses, is clearly a fucking idiot.


BB.

[aq]

I'm not saying that things are perfect, so stop straw-manning to defend your ridiculous concept. Anyone who thinks that letting theives give back what they stole without actual punishment as a way of deterring and minimizing theft and losses, is clearly a fucking idiot.

If I have to choose between getting my funds back or get the thief into jail, I choose funds any day.
I am not that kind of human, that enjoys someone rotting in jail that much, that I would waste my funds on it. However, I see, that you are probably different than me.

[Vod]

I'm not saying that things are perfect, so stop straw-manning to defend your ridiculous concept. Anyone who thinks that letting theives give back what they stole without actual punishment as a way of deterring and minimizing theft and losses, is clearly a fucking idiot.

If I have to choose between getting my funds back or get the thief into jail, I choose funds any day.
I am not that kind of human, that enjoys someone rotting in jail that much, that I would waste my funds on it. However, I see, that you are probably different than me.

Irregardless, you take away punishment, and there are no consequences.  Everyone would be free to try and steal and hack because nothing at all would happen to them.  Whether you believe it or not, the threat of punishment stops people from stealing.  ZT needs to be charged for the theft of half a million dollars, we are just waiting until he stops returning funds before we do it.

[BitBuster]

If I have to choose between getting my funds back or get the thief into jail, I choose funds any day.

Forgetting for now that no one is asking you to choose, the fact that you would rather get back your own money than try to apprehend and deter the theif from stealing from others is at odds with the image you are trying to paint yourself with in your jibe against me (conscientious, fair, etc).

I am not that kind of human, that enjoys someone rotting in jail that much, that I would waste my funds on it. However, I see, that you are probably different than me.

Again you are straw-manning because you have no answer. I'm not a fan of prison at all, but you chose to assume otherwise.

Theif A - Takes everyone's money, is found out and returns it. Therefore both sides are back where they started.
Theif B - Takes everyone's money, is found out and returns it as well as receiving punishment (additional compensation, dispossession, rehab, restriction of freedom). Therefore the victims are where they started and the theif has at the very least been inconvenienced and at the most been reformed.

Which one do you think is more likely to steal again? Don't even think about straw-manning again or debating useless semantics, the fact is that there is no perfect solution to theft of BTC, but your proposed solution is more damaging if anything.


BB.

[Phinnaeus Gage]

Hi all and sorry for the wait.

I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.

Best,
Patrick

Hi Patrick, please could you answer the question myself and others have asked repeatedly: What/Who has given you the legal authority to take custody of these stolen goods? As I'm sure you can tell, I really would like a clear and full answer on this.

Zhou,  I expect the hacker to come up with the missing funds,  or at the very least you to turn over all his contact details so the appropriate actions can be taken.

As a matter of justice, decency and deterrent, Zhou should turn over any and all of "Chens" details regardless of wether the funds are returned. The theif needs to be hunted down and brought to justice, otherwise the community invites more thefts.


BB.

Patrick Murck has repeatedly been asked to provide proof that he's able to practice federal law in all 50 states as he has claimed. I, personally, asked to see his shingle stating such, but to no prevail.

Until such certificate is produced, I am on record for stating that we have a classic case of the fox watching the hen house. The only reason some funds are being returned is to hopefully take the heat off, coupled with the hope that nobody digs deeper into the background of all those involved. I'm sorry, but a Linkedin page doesn't cut it for me, for I can easily be a lawyer in five minutes, albeit under a different name and of somebody who's listed on The Bar and recently passed away. (to be clear, not saying that's the case, but that's how I would do it)

~Bruno~

[naima53]

Well .. I see that shit-storm has again begun. I have 2 questions:
1)  there is still a database claim ?(the one where the filling of fields) \ "database is intact?" \And who now owns base?
2) If the money "found" (magically returned), I think that they did not disappear at all, likewise, need to "return" the database of trade (which is "erased" "hacker") \This database also "hackers"magically returned)?\

[aq]

If I have to choose between getting my funds back or get the thief into jail, I choose funds any day.

Forgetting for now that no one is asking you to choose, the fact that you would rather get back your own money than try to apprehend and deter the theif from stealing from others is at odds with the image you are trying to paint yourself with in your jibe against me (conscientious, fair, etc).

I am not that kind of human, that enjoys someone rotting in jail that much, that I would waste my funds on it. However, I see, that you are probably different than me.

Again you are straw-manning because you have no answer. I'm not a fan of prison at all, but you chose to assume otherwise.

Theif A - Takes everyone's money, is found out and returns it. Therefore both sides are back where they started.
Theif B - Takes everyone's money, is found out and returns it as well as receiving punishment (additional compensation, dispossession, rehab, restriction of freedom). Therefore the victims are where they started and the theif has at the very least been inconvenienced and at the most been reformed.

Which one do you think is more likely to steal again? Don't even think about straw-manning again or debating useless semantics, the fact is that there is no perfect solution to theft of BTC, but your proposed solution is more damaging if anything.

BB.

You have to give the thief some incentive to return the funds.
Bitcoin is a global currency, but there are many countries out there, where a Bitcoin theft is not even illegal.
When the trustee for the payback (consultancy) holds the funds in some unsecured account, whom to you blame more?
When the trustee (consultancy) was also the cause for the hack before (unsecured email), do you still blame the thief?
Make no mistake, the thief is guilty, but it almost borders to keep something that been lost and found.

[virtuallylaw]

Hi all and sorry for the wait.

I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.

Best,
Patrick

Hi Patrick, please could you answer the question myself and others have asked repeatedly: What/Who has given you the legal authority to take custody of these stolen goods? As I'm sure you can tell, I really would like a clear and full answer on this.

BB.

I don't have custody of the funds, they are all held at MtGox. This is widely known so I'm not sure what answer I could give that would satisfy you?

If you are asking me to divulge confidential information and break privilege, that is not going to happen.

If you are concerned about who can exercise control over the funds, I can clearly state that I do not have any control over or access to the funds. They are frozen at MtGox pending formal procedures.

Best,
Patrick

[repentance]

Even if he doesn't have any such authority (and I'm not convinced that he doesn't), what are you going to do about it? Call the cops?

New Zealand insolvency law is quite clear on the issue of creditors acting to secure assets.  Not only can they do so, but a creditor who acts to secure assets for the benefit of all creditors becomes a preferential creditor and is entitled to have both their costs in securing the assets and the whole of their claim given preference over other creditors.  So Wendon as a creditor most certainly had the legal right to retain Patrick to help with the securing of assets.  Tihan has also stated that Wendon will be making its own entitlement under receivership available to other creditors in liquidation.

Quite separately, Wendon as the limited partner of Bitcoinica LP is legally allowed to participate in a limited range of "safe harbour" management activities - one of those activities relates to dissolving the partnership.  Given the circumstances under which the partnership broke down, not only is it unlikely that it would be found Wendon acted improperly in attempting to secure the assets of Bitcoinica LP, it's likely it would be found that they had a positive obligation to do so.

People are understandably cynical, but neither Tihan nor Patrick Murck is in a position where false statements regarding Bitcoinica assets will be without consequence.  It is absolutely in their best legal interests that this whole clusterfuck proceed to receivership and liquidation as soon as possible.  The moment a liquidator is appointed, they assume total control over all assets - that the assets remain frozen on MtGox until that happens is the best option for users and Bitcoinica principals alike.

If it helps, a liquidator is required to establish the cause of business failure and whether or not any of the principals have acted in a manner which gives rise to personal liability.  If the actions of the principals rise to the level of criminal behaviour, the liquidator is obligated to report that to the appropriate authority (usually the Serious Fraud Unit, who'll then decide on the most appropriate form of criminal investigation).  Any creditor claiming in liquidation can raise concerns with the liquidator and provide additional information to the liquidator.  An initial report is sent to all creditors by the liquidator early in the liquidation process, so there's definitely an opportunity for creditors to have input if they believe the liquidator has been misled or is ignoring important issues.  It's even possible to apply to a court to have the appointed liquidator replaced if creditors are unhappy with the liquidator's performance.  

There's a hell of a shit-storm developing in the Bitcoin conference thread at the moment.  

[Transisto]

As always thank Repentance for these insightful posts.

...
There's a hell of a shit-storm developing in the Bitcoin conference thread at the moment.  

And these are the posts that started it.

oh fuck off. Name me one instance where I lied, or conducted myself improperly. Point them to me. It was me who made public all the emails, released publically all the documents/agreements, released the sourcecode .......

https://bitcointalk.org/index.php?topic=67199.msg1099607#msg1099607
https://bitcointalk.org/index.php?topic=67199.msg1099851#msg1099851

[repentance]

As always thank Repentance for these insightful posts.

...
There's a hell of a shit-storm developing in the Bitcoin conference thread at the moment.  

And these are the posts that started it.

oh fuck off. Name me one instance where I lied, or conducted myself improperly. Point them to me. It was me who made public all the emails, released publically all the documents/agreements, released the sourcecode .......

https://bitcointalk.org/index.php?topic=67199.msg1099607#msg1099607
https://bitcointalk.org/index.php?topic=67199.msg1099851#msg1099851

Has Patrick withdrawn as a guest speaker?  If not, I cannot imagine any way that his presentation will not end badly. 

[dopamine]

if he does someone throw a shoe @ his face.....

[LoupGaroux]

Jesus, Mary and Joseph!! Are any of the Intersango Gango still thinking that there is some possible benefit to them standing up and presenting in London? Seriously, take a hint boys, you need to let the thermonuclear fires die down a bit, you are painted with the worst scandal and the greatest example of incompetence in the history of bitcoinage, and you really think you have something constructive to offer? No, you don't. Leave your donation to subsidize the event, show up and learn from listening to all the people who are NOT gigantic cluster fuck-ups and did not drop their pants to either A:) get fleeced by a 17 fraudster; or B) try to fleece selfsame 17 year old out of his business under the guise of being the white hat saviors. Either way you screwed up, and nothing, absolutely nothing you have to say in a public forum can help.

[Rarity]

I'm pleased that my threat of bringing him to justice forced Zhou Tong to refund.  We actually held off on engaging the PI once he made the announcement he was returning the majority of funds.  But the relationship is now in place and we WILL hold ZT accountable if he does not return the remaining funds soon.

According to ZT himself, the $40K being held is from personal funds, so he has no reason not to refund the rest of the stolen money.

Your stalking and threats of violence did nothing but complicate this matter.  As Zhou Tong valiantly fights to recover money from the thief for the benefit of the community he simultaneously is having to watch his back against that very ungrateful community as they attempt to bite the hand that feeds them.  

I, for one, am thankful that someone like Zhou Tong is there to stand up for justice and fight against the theft of funds.  As for those who think he is a criminal, I can only say one thing, "There are conditions worse than being unable to see, and that is imagining one sees."

[Bitcoin Oz]

I'm pleased that my threat of bringing him to justice forced Zhou Tong to refund.  We actually held off on engaging the PI once he made the announcement he was returning the majority of funds.  But the relationship is now in place and we WILL hold ZT accountable if he does not return the remaining funds soon.

According to ZT himself, the $40K being held is from personal funds, so he has no reason not to refund the rest of the stolen money.

Your stalking and threats of violence did nothing but complicate this matter.  As Zhou Tong valiantly fights to recover money from the thief for the benefit of the community he simultaneously is having to watch his back against that very ungrateful community as they attempt to bite the hand that feeds them.  

I, for one, am thankful that someone like Zhou Tong is there to stand up for justice and fight against the theft of funds.  As for those who think he is a criminal, I can only say one thing, "There are conditions worse than being unable to see, and that is imagining one sees."

I am batman

[Phinnaeus Gage]

I'm pleased that my threat of bringing him to justice forced Zhou Tong to refund.  We actually held off on engaging the PI once he made the announcement he was returning the majority of funds.  But the relationship is now in place and we WILL hold ZT accountable if he does not return the remaining funds soon.

According to ZT himself, the $40K being held is from personal funds, so he has no reason not to refund the rest of the stolen money.

Your stalking and threats of violence did nothing but complicate this matter.  As Zhou Tong valiantly fights to recover money from the thief for the benefit of the community he simultaneously is having to watch his back against that very ungrateful community as they attempt to bite the hand that feeds them.  

I, for one, am thankful that someone like Zhou Tong is there to stand up for justice and fight against the theft of funds.  As for those who think he is a criminal, I can only say one thing, "There are conditions worse than being unable to see, and that is imagining one sees."

To Zhou Tong (serious and just in case you do exist):

Don't take any treats serious, but do keep in the back of your mind that they exist, otherwise it will consume you. I've recently been threatened, but have paid it no mind, because if they were serious they would have kept their effin' trap shut. Therefore, just carry on as if you didn't have to look over your shoulder. BTW, where are you going to be at 2PM (local) tomorrow afternoon?   (only kidding)

Later.

~Bruno~

PS: I hope you enjoy my 'walks into a bar' humor, albeit the majority have been jabs at your expense which, unfortunately, may continue, but the gist of this post is to honestly give you peace of mind if you've received any treats from here or other channels.

Stay Rucky!  

Edit: I just realized that this is the Tihan thread and didn't mean to post off-topic, but I was reply to a previous post and felt it important to post what I did. Sorry, if I was off-base, all.

Peace.

[BitBuster]

I don't have custody of the funds, they are all held at MtGox. This is widely known so I'm not sure what answer I could give that would satisfy you?

...

If you are concerned about who can exercise control over the funds, I can clearly state that I do not have any control over or access to the funds. They are frozen at MtGox pending formal procedures.

Then what sets you aside from any other poster on here? I was under the impression that you are acting on behalf of certain parties in a legal capacity? What are you actually here to do?

If you are asking me to divulge confidential information and break privilege, that is not going to happen.

I never suggested anything of the sort and you know it, so it is confusing to see you jump to this defense?

Please could you answer Bruno's questions?


BB.

[defxor]

Bitcoin is a global currency, but there are many countries out there, where a Bitcoin theft is not even illegal.

Really? Feel free to name one. Anything that can be shown to "have value" (utility) is usually illegal to remove from another person's control against their will - there have been plenty of court decisions in various parts of the world to that effect over the years. Including "virtual Internet stuffz".

[repentance]

Bitcoin is a global currency, but there are many countries out there, where a Bitcoin theft is not even illegal.

Really? Feel free to name one. Anything that can be shown to "have value" (utility) is usually illegal to remove from another person's control against their will - there have been plenty of court decisions in various parts of the world to that effect over the years. Including "virtual Internet stuffz".

Technically, it's not even necessary for an item to have value in order for appropriating it without the owner's consent to be a criminal offence.  Where value comes into play is when compensation is sought through civil means.

[coinft]

Bitcoin is a global currency, but there are many countries out there, where a Bitcoin theft is not even illegal.

Really? Feel free to name one. Anything that can be shown to "have value" (utility) is usually illegal to remove from another person's control against their will - there have been plenty of court decisions in various parts of the world to that effect over the years. Including "virtual Internet stuffz".

Technically, it's not even necessary for an item to have value in order for appropriating it without the owner's consent to be a criminal offence.  Where value comes into play is when compensation is sought through civil means.

I agree. The often repeated BS that there's no law against bitcoin theft hurts common and legal sense.

But in practice there are difficulties, like having to prove possession first, and pursuing theft of bitcoins in court may be harder than more physical crimes.

[repentance]

I agree. The often repeated BS that there's no law against bitcoin theft hurts common and legal sense.

But in practice there are difficulties, like having to prove possession first, and pursuing theft of bitcoins in court may be harder than more physical crimes.

People have been prosecuted for the theft of virtual items on Habbo Hotel before and there's a pretty solid list of prosecutions for computer intrusions and data theft/destruction (even if you don't regard BTC as an "item", it can certainly be regarded as data).

I think where difficulty might arise is in jurisdictions which look to specific laws rather than over-arching principles of law.  Many nations have existing laws which can easily be interpreted to include e-related issues and so there's been no rush to enact legislation which specifically deals with e-issues.  There may be other jurisdictions in which such issues can't be dealt with in the absence of specific legislation related to e-property and e-commerce.

[Vladimir]

"bitcoin is just monopoly money" is such an old scammer motto, I've heard it from virtually every known scammer out there. How convenient.

[Coinoisseur]

Funny thing is, steal enough actual monopoly money and legal consequences might follow. The surprising thing to me is how many people seem to think virtual items are still completely nebulous to legal principles.

[Vod]

I agree. The often repeated BS that there's no law against bitcoin theft hurts common and legal sense.
But in practice there are difficulties, like having to prove possession first, and pursuing theft of bitcoins in court may be harder than more physical crimes.

I don't think proving the theft of bitcoins in court would be hard at all.  The thief admitted to the evidence against him, but blamed an associate.  If he can't produce the associate, wouldn't he be found guilty?  He also cannot claim the forum account is not his, because he posted specific pictures of himself using it.

[repentance]

Take this with a grain of salt, because it's unsubstantiated rumour at this point, but if it's true it would be enormously helpful to the liquidation process.

Wayne Lee-Archer 2:55 AM
MagicalTux will be travelling to NZ to talk to the recievers regarding
Bitcoinica/Intersango

https://privatepaste.com/5241fafb45

[Maged]

Take this with a grain of salt, because it's unsubstantiated rumour at this point, but if it's true it would be enormously helpful to the liquidation process.

Wayne Lee-Archer 2:55 AM
MagicalTux will be travelling to NZ to talk to the recievers regarding
Bitcoinica/Intersango

https://privatepaste.com/5241fafb45

KEEP THIS ABSOLUTELY CONFIDENTIAL

Huh.

[repentance]

Take this with a grain of salt, because it's unsubstantiated rumour at this point, but if it's true it would be enormously helpful to the liquidation process.

Wayne Lee-Archer 2:55 AM
MagicalTux will be travelling to NZ to talk to the recievers regarding
Bitcoinica/Intersango

https://privatepaste.com/5241fafb45

KEEP THIS ABSOLUTELY CONFIDENTIAL

Huh.

Wasn't sent to me.  The link has been posted in every BDT thread over on reddit.  Someone in the JRO loop obviously thought it needed to be made public.

[naima53]

Patrick (or whatever), you can answer simple questions - on what date appointed bankruptcy process? Which country will be the hearing? What is the probability of a refund? (not all, but how much is left) Was the interview with the judge? The judge has already been assigned ?(known?)

BDT also hacked, and I decided to sell my investment. I'm disappointed. This is a community of thieves. (no offense, but there's a lot of thieves). It simply can not get development. (public recognition) I will sell parts. It will be a long time, leaving only about 50k and does not invest more in any one company associated with Bitkoin. And discourage all my friends in their best interest. I'm sorry, but the year of participation disappointed me. More and more I think that it's intended for, that would steal money. I do not believe in hacking. This is how it was originally intended. Just my opinion.

P\S  Mavrodi, You do not waste time in prison.  Your doing? World pyramid ... Funny ..like that time  - after the collapse of the Russian beta test. Amerikans believe again. And you will destroy anyone who tries to use Bitkoin as a medium of exchange. (the money) is quite clear.

[Herodes]

Patrick (or whatever), you can answer simple questions - on what date appointed bankruptcy process? Which country will be the hearing? What is the probability of a refund? (not all, but how much is left) Was the interview with the judge? The judge has already been assigned ?(known?)

BDT also hacked, and I decided to sell my investment. I'm disappointed. This is a community of thieves. (no offense, but there's a lot of thieves). It simply can not get development. (public recognition) I will sell parts. It will be a long time, leaving only about 50k and does not invest more in any one company associated with Bitkoin. And discourage all the friends in their best interest. I'm sorry, but the year of participation disappointed me. More and more I think that it's intended for, that would steal money. I do not believe in hacking. This is how it was originally intended. Just my opinion.

Bitcoin is at this time a high risk investment, and so is any Bitcoin business.

Realizing this means that any investment anyone does could be lost. This everyone needs to keep in the back of their minds.

"If I lose the money currently invested, would I recover from this without severe problems?"

If the answer is no, then one should extract as much of one's investment till one feels comfortable with the investment you make.

Of course, with high risks comes also possible high profits, so it could go both ways.

Doing due dilligence never hurts either, and if there are warning signs, or your gut feeling says that an investment is too risky, then do not invest.

If you have 10K USD to invest in Bitcoin or Bitcoin related ventures, then spread the risk, and don't put it all in a single project. I understand
some people get emotional and discouraged when they lose a lot of money, and that's understandable, but don't advise others against investing in
bitcoin related ventures, let them make their own decisions.

As for new bitcoin services, it could be smart to wait a while to see if everything works fine, before putting any bitcoins in that project.

As a part of the dd, the operators of a service should also be able to respond detailed to any though questions you may have about their business,
and if they don't it might be raising warning signals.

So: "Don't risk more than you can afford to lose!"

Too many people are greedy and just see the promises for returns, and blindly invest and hope for the best.

[repentance]

Too many people are greedy and just see the promises for returns, and blindly invest and hope for the best.

Users are constantly pushing services to rush to market, too.  People demanded a Bitcoinica and then when that failed they demanded a replacement - and look what happened.  The lead time on so many of these projects has been far too short, not to mention that they're grossly under-capitalised to boot.

[markm]

Too many people are greedy and just see the promises for returns, and blindly invest and hope for the best.

Users are constantly pushing services to rush to market, too.  People demanded a Bitcoinica and then when that failed they demanded a replacement - and look what happened.  The lead time on so many of these projects has been far too short, not to mention that they're grossly under-capitalised to boot.

If you are actually interested in something that has been and still is taking its time to try to get it right, check out https://bitcointalk.org/index.php?topic=53329.0

-MarkM-

[Herodes]

Too many people are greedy and just see the promises for returns, and blindly invest and hope for the best.

Users are constantly pushing services to rush to market, too.  People demanded a Bitcoinica and then when that failed they demanded a replacement - and look what happened.  The lead time on so many of these projects has been far too short, not to mention that they're grossly under-capitalised to boot.

Agree with you. My personal opinion is that it's better to use more time to 'get it right' than to rush it. Users demand, yes, but there ain't users yelling at the back of developers to have services launched, this pressure the operator puts on themselves.

[naima53]

Patrick (or whatever), you can answer simple questions - on what date appointed bankruptcy process? Which country will be the hearing? What is the probability of a refund? (not all, but how much is left) Was the interview with the judge? The judge has already been assigned ?(known?)

BDT also hacked, and I decided to sell my investment. I'm disappointed. This is a community of thieves. (no offense, but there's a lot of thieves). It simply can not get development. (public recognition) I will sell parts. It will be a long time, leaving only about 50k and does not invest more in any one company associated with Bitkoin. And discourage all the friends in their best interest. I'm sorry, but the year of participation disappointed me. More and more I think that it's intended for, that would steal money. I do not believe in hacking. This is how it was originally intended. Just my opinion.

Bitcoin is at this time a high risk investment, and so is any Bitcoin business.

Realizing this means that any investment anyone does could be lost. This everyone needs to keep in the back of their minds.

"If I lose the money currently invested, would I recover from this without severe problems?"

If the answer is no, then one should extract as much of one's investment till one feels comfortable with the investment you make.

Of course, with high risks comes also possible high profits, so it could go both ways.

Doing due dilligence never hurts either, and if there are warning signs, or your gut feeling says that an investment is too risky, then do not invest.

If you have 10K USD to invest in Bitcoin or Bitcoin related ventures, then spread the risk, and don't put it all in a single project. I understand
some people get emotional and discouraged when they lose a lot of money, and that's understandable, but don't advise others against investing in
bitcoin related ventures, let them make their own decisions.

As for new bitcoin services, it could be smart to wait a while to see if everything works fine, before putting any bitcoins in that project.

As a part of the dd, the operators of a service should also be able to respond detailed to any though questions you may have about their business,
and if they don't it might be raising warning signals.

So: "Don't risk more than you can afford to lose!"

Too many people are greedy and just see the promises for returns, and blindly invest and hope for the best.

Thank you, it's obvious. I invested 2.5% of my portfolio. It was a good chance to use the money, which can not legally be invested by Russian law. But even that - too much. At first it was not so obvious that this is a scam. With the advent of "funds" (and the approval of their main developer) - all shit floats to the surface. Now I have to withdraw money before it is too late. Feeling my mistake.

[MelMan2002]

Take this with a grain of salt, because it's unsubstantiated rumour at this point, but if it's true it would be enormously helpful to the liquidation process.

Wayne Lee-Archer 2:55 AM
MagicalTux will be travelling to NZ to talk to the recievers regarding
Bitcoinica/Intersango

https://privatepaste.com/5241fafb45

KEEP THIS ABSOLUTELY CONFIDENTIAL

Huh.

So does anybody know more about this Cartmell guy and his case against Bitcoinica?  I wish he would have invited the rest of us in the suit...

[repentance]

So does anybody know more about this Cartmell guy and his case against Bitcoinica?  I wish he would have invited the rest of us in the suit...

He's a New  Zealand based venture capitalist who has set up a number of Bitcoin related companies.

http://www.business.govt.nz/companies/app/ui/pages/companies/3701996/directors

http://briancartmell.com/

http://about.me/briancartmell

You can find out more information about the lawsuit here.

https://docs.google.com/file/d/0B_ECG6JRZs-7dTZ5QS0xcUkxQjQ/edit#

[game137]

What's the progress now and when will we get our money back?

[repentance]

What's the progress now and when will we get our money back?

Patrick Murck posted a couple of days ago that USD 100,000 and 20,000 BTC retrieved from "Chen" have been placed in Bitcoinica's MtGox account awaiting transfer to a receiver.  When a liquidator takes over from the receiver, they'll make a preliminary report to creditors which outlines the assets available for distribution to creditors and when the liquidation should be complete.  

https://bitcointalk.org/index.php?topic=97272.msg1098303#msg1098303

[Bitcoin Oz]

What's the progress now and when will we get our money back?

Patrick Murck posted a couple of days ago that USD 100,000 and 20,000 BTC retrieved from "Chen" have been placed in Bitcoinica's MtGox account awaiting transfer to a receiver.  When a liquidator takes over from the receiver, they'll make a preliminary report to creditors which outlines the assets available for distribution to creditors and when the liquidation should be complete.  

https://bitcointalk.org/index.php?topic=97272.msg1098303#msg1098303

I hope they changed the password 

[disclaimer201]

Very important to know is how we have to claim our funds with the liquidator now. Does anyone know? Merci.

[repentance]

Very important to know is how we have to claim our funds with the liquidator now. Does anyone know? Merci.

When the name of the liquidator is announced (it's usually a chartered accountant), people will need to lodge a claim form with them. The claim forms are pretty basic.  The liquidator will set a cut-off date for lodging forms and after that date they'll give creditors a rough estimate of the percentage they can expect to receive.  How long the process takes depends on how complicated the liquidation is.  In this particular case there aren't lots of different assets to be sold but there are quite a few creditors. 

[Phinnaeus Gage]

Very important to know is how we have to claim our funds with the liquidator now. Does anyone know? Merci.

When the name of the liquidator is announced (it's usually a chartered accountant), people will need to lodge a claim form with them. The claim forms are pretty basic.  The liquidator will set a cut-off date for lodging forms and after that date they'll give creditors a rough estimate of the percentage they can expect to receive.  How long the process takes depends on how complicated the liquidation is.  In this particular case there aren't lots of different assets to be sold but there are quite a few creditors. 

September and Gavin come to mind.

~Bruno~

[realnowhereman]

I've lost track a bit of exactly what's been lost and recovered.  From memory (please correct me):

Linode theft; X BTC (losses covered by investors I believe)
Rackspace theft: 20% of BTC; 0% of USD
MtGox API theft: 40,000 BTC; 200,000 USD

Is this right?  Does anyone know where that puts all the creditors as a percentage of their deposit?

Are we working on 50% of balances returned?  70%?  80%?  100% seems unlikely.

[thest0ckman]

looks like i have to keep wasting my time reading this forum and keep an eye out for a new claim process?

[iamapi]

3 month passed after the incident...

What's the progress now and when will we get our money back?

Patrick Murck posted a couple of days ago that USD 100,000 and 20,000 BTC retrieved from "Chen" have been placed in Bitcoinica's MtGox account awaiting transfer to a receiver.  When a liquidator takes over from the receiver, they'll make a preliminary report to creditors which outlines the assets available for distribution to creditors and when the liquidation should be complete.  

https://bitcointalk.org/index.php?topic=97272.msg1098303#msg1098303

[sarpar]

"Zhou" took funds recovered from "Chen" hostage in order to circumvent AML-regulations for suspicious private transactions at AurumXChange. According to him these funds locked at AurumXchange belong now to us Bitcoinica-creditors (which also means Zhou still privately holds further stolen funds). Even though I despise him for tricking his private funds free the question remains:


@AurumXchange can you unlock these funds and send them into the MtGox trust account? please give a status update.

[Vod]

"Zhou" took funds recovered from "Chen" hostage in order to circumvent AML-regulations for suspicious private transactions at AurumXChange. According to him these funds locked at AurumXchange belong now to us Bitcoinica-creditors (which also means Zhou still privately holds further stolen funds). Even though I despise him for tricking his private funds free the question remains:


@AurumXchange can you unlock these funds and send them into the MtGox trust account? please give a status update.

So how much has Zhou Tong stolen and not yet returned?


@AurumXchange should keep the funds locked.  Zhou has stated they are his personal funds, so it is between him and AurumXchange.  He is keeping our bitcoins to fund his personal mistakes.  In other words, he's charging a fee for stealing from us. 

[repentance]

"Zhou" took funds recovered from "Chen" hostage in order to circumvent AML-regulations for suspicious private transactions at AurumXChange. According to him these funds locked at AurumXchange belong now to us Bitcoinica-creditors (which also means Zhou still privately holds further stolen funds). Even though I despise him for tricking his private funds free the question remains:


@AurumXchange can you unlock these funds and send them into the MtGox trust account? please give a status update.

So how much has Zhou Tong stolen and not yet returned?


@AurumXchange should keep the funds locked.  Zhou has stated they are his personal funds, so it is between him and AurumXchange.  He is keeping our bitcoins to fund his personal mistakes.  In other words, he's charging a fee for stealing from us. 

He actually stated that the funds belong to a "friend" of his for whom he was doing a favour selling LR.  That makes it difficult for AurumXchange to release the funds to anyone until both their source and the legitimacy of of their origin can be established.  If Zhou can't establish the funds as his, he can't give permission for them to be released to the Bitcoinica MtGox account (originally said he was going to do that and get the funds back of Chen - if Chen was able to reimburse him for that then Chen should be able to come up with another $40,000 to be sent through Patrick Murck).

[sarpar]

He actually stated that the funds belong to a "friend" of his for whom he was doing a favour selling LR.  That makes it difficult for AurumXchange to release the funds to anyone until both their source and the legitimacy of of their origin can be established.  If Zhou can't establish the funds as his, he can't give permission for them to be released to the Bitcoinica MtGox account (originally said he was going to do that and get the funds back of Chen - if Chen was able to reimburse him for that then Chen should be able to come up with another $40,000 to be sent through Patrick Murck).

I am aware of the obstacles here - that's why I addressed aurumXchange directly hoping for a clear statement. If aurumXchange states clearly that there is no way they can pass through these 40.000 to the Bitcoinica trust account without Zhou's help, Zhou Tong would be clearly without any doubt committing some kind of embezzlement. 

Zhou stated clearly he is able to secure 140.000 of which 100.000 are to be returned and 40.000 used to pay off his friend. The 40.000 for his friend are compensated by the aurumXchange account. Ergo:  if his collateral shows to be illiquid (NB by his own wrongdoing) he has to offer another option to compensate us. e.g. like repentance suggested. He can't take Bitcoincia customers hostage in his dispute with aurumXchange. His transaction on aurumXchange (according to his own words) is completely unrelated to Bitcoinica so I suggest him to leave it at that!

@Zhou How do you in all seriousness propose to return the remaining 40.000?

[repentance]

I've lost track a bit of exactly what's been lost and recovered.  From memory (please correct me):

Linode theft; X BTC (losses covered by investors I believe)
Rackspace theft: 20% of BTC; 0% of USD
MtGox API theft: 40,000 BTC; 200,000 USD

Is this right?  Does anyone know where that puts all the creditors as a percentage of their deposit?

Are we working on 50% of balances returned?  70%?  80%?  100% seems unlikely.

When the MtGox intrusion was originally announced, Amir posted that it would likely result in a forced reduction in refunds of 30%.  However that was based on refunding users at a price of ~USD 5 per BTC (the figure being used when Bitcoinica was taken offline after the MtGox hack).  The increase in BTC price plus the return of some of the funds from the MtGox breach should close that gap in theory, but liquidation costs now need to be factored into the equation and liquidators typically charge upwards of $200 per hour. 

A liquidator can only give preferential treatment to unsecured creditors in limited circumstances, so if some unsecured creditors have received a 50% payment and those creditors aren't entitled to be treated as preferential, the liquidator will need to ensure that either other unsecured creditors also receive a 50% payment or claw back the 50% payments which have already been made so that other creditors are not disadvantaged by those payments.  We know that there is currently at least 20,000 BTC and USD 100,000 in the Mt Gox account but we don't really know the dollar value of 50% initial payments yet to be made.

[ninjarobot]

@Zhou How do you in all seriousness propose to return the remaining 40.000?

I had a conversation via email with Zhou earlier this week and this is what he told me:

I'm willing to personally commit the liability after the liquidation is done for the shortfall of funds, paid back from the profits in my future businesses.

It is nice of Zhou to suggest this but I don't think it is very practical, nor would it be ethical for creditors to accept Zhou's money if he really is innocent. Is anyone going after Chen?

I've lost track a bit of exactly what's been lost and recovered.  From memory (please correct me):

Linode theft; X BTC (losses covered by investors I believe)
Rackspace theft: 20% of BTC; 0% of USD
MtGox API theft: 40,000 BTC; 200,000 USD

Here you go:

• 2012/03/02 - LINODE hack. 43,554 BTC stolen. LP (Tihan’s fund) covers loss.
• 2012/05/11 - RACKSPACE hack. 18,547 BTC Stolen, Full data loss. LP covers loss.
• 2012/07/13 - MtGox account compromise: 40,000 BTC and 40,000 USD stolen.
• 2012/08/14 - MtGox fund recovery from Chen: 20,000 BTC and 100,000 USD recovered.

liquidators typically charge upwards of $200 per hour.  

Ouch! Now I understand the meaning of the word 'liquidator'. At that rate there will be little left (Consider the time needed to reconstruct the DB and vet claims). I certainly hope Tihan can find a receiver and liquidator that does not eat baby panda hearts for breakfast. Personally I'm hoping to see at least 70% back. (That would still mean a ~12,000 USD haircut in my case..)

[Phinnaeus Gage]

@Zhou How do you in all seriousness propose to return the remaining 40.000?

I had a conversation via email with Zhou earlier this week and this is what he told me:

I'm willing to personally commit the liability after the liquidation is done for the shortfall of funds, paid back from the profits in my future businesses.

It is nice of Zhou to suggest this but I don't think it is very practical, nor would it be ethical for creditors to accept Zhou's money if he really is innocent. Is anyone going after Chen?

I've lost track a bit of exactly what's been lost and recovered.  From memory (please correct me):

Linode theft; X BTC (losses covered by investors I believe)
Rackspace theft: 20% of BTC; 0% of USD
MtGox API theft: 40,000 BTC; 200,000 USD

Here you go:

• 2012/03/02 - LINODE hack. 43,554 BTC stolen. LP (Tihan’s fund) covers loss.
• 2012/05/11 - RACKSPACE hack. 18,547 BTC Stolen, Full data loss. LP covers loss.
• 2012/07/13 - MtGox account compromise: 40,000 BTC and 40,000 USD stolen.
• 2012/08/14 - MtGox fund recovery from Chen: 20,000 BTC and 100,000 USD recovered.

liquidators typically charge upwards of $200 per hour.  

Ouch! Now I understand the meaning of the word 'liquidator'. At that rate there will be little left (Consider the time needed to reconstruct the DB and vet claims). I certainly hope Tihan can find a receiver and liquidator that does not eat baby panda heart for breakfast. Personally I'm still hoping to see at least 70% back. (That would still mean a ~12,000 USD haircut in my case..)

All I know is that I turned one guy onto Bitcoin who just inherited a chuck of money. I never mentioned Bitcoinica to him--just Bitcoin. The next thing I learn is that supposedly he (Jerry) had about $10,000 USD tied up in Bitcoinica. Although he never mentioned the exact amount, via conversations that's my best assessment. I'm pretty sure he bought in at $5/BTC, thus he could have made 200% profit recently. Instead, he would have been better off having it sitting in a conventional bank collecting 1% interest.

This past Sunday, I stopped over at the Sandwich Flea Market--two blocks from my home--to rap with a couple vendor friends of mine--Mike and Kenny. After talking shop awhile, I got ready to leave when Mike asked me about that internet money I'm involved in. I have never mentioned Bitcoin to either one of those guys, so I was taken aback when he bought it up. I asked him if he meant Bitcoin, whereupon he said yes, recalling that that's what he thought it was. Come to find out that Mike learned about Jerry's lost via a friend, via a friend, via a friend (think small town gossip, if you will). Fortunately, I had the opportunity to set the matter straight with him and Kenny, but did learn that a lot of people think elsewise about me here in Sandwich.

So, here I am on Bitcointalk trying my damnest to uncover the truth and, admittedly, fucking up along the way, and what do I get as a reward?



~Bruno~

[sarpar]

@Zhou How do you in all seriousness propose to return the remaining 40.000?

I had a conversation via email with Zhou earlier this week and this is what he told me:

I'm willing to personally commit the liability after the liquidation is done for the shortfall of funds, paid back from the profits in my future businesses.

It is nice of Zhou to suggest this but I don't think it is very practical, nor would it be ethical for creditors to accept Zhou's money if he really is innocent. Is anyone going after Chen?

Innocent or not doesn't matter here - he chose to pay off his friend with money returned from "Chen". These 40.000 belong to US and WE didn't agree to give Zhou Tong a loan!

Also consider:
1. The amount recovered is substantially less than stolen - we don't know in detail what happened here (there is enough room for a profit margin).
2. Chen A MILLIONAIRE didn't replace the cost of his laundering activity
3. Zhou protects Chens identity
4. Zhou strictly rejects to provide information about his 40.000 AurumXchange transaction to simply unlock these funds and repay the 40.000 Dollar loan he took from us without permission.

Especially 4. makes his promise to repay from future profits implausible. It's time to put the screws on.

[Bitcoin Oz]

Wont the liquidator sell the bitcoins and only deal in USD ?

[Raoul Duke]

So, here I am on Bitcointalk trying my damnest to uncover the truth and, admittedly, fucking up along the way, and what do I get as a reward?

It could have been worse. Imagine if it was a pineapple...

[Phinnaeus Gage]

LOL, psy! You're not a mod anymore?

~Bruno~

[ninjarobot]

Innocent or not doesn't matter here - he chose to pay off his friend with money returned from "Chen". These 40.000 belong to US and WE didn't agree to give Zhou Tong a loan!

Well, technically I guess the 40,000 USD belongs to Bitcoinica. And the operators of Bitcoinica apparently didn't really care about recovering those funds anyway.

Also consider:
1. The amount recovered is substantially less than stolen - we don't know in detail what happened here (there is enough room for a profit margin).
2. Chen A MILLIONAIRE didn't replace the cost of his laundering activity
3. Zhou protects Chens identity
4. Zhou strictly rejects to provide information about his 40.000 AurumXchange transaction to simply unlock these funds and repay the 40.000 Dollar loan he took from us without permission.

Especially 4. makes his promise to repay from future profits implausible. It's time to put the screws on.

Zhou addressed some of those concerns to me so I will quote them here.

on #1:

Bitcoinica announced the exchange rate to be $5.1 per BTC. At this rate, all funds have been recovered. I personally feel unfair too, that's why I suggest you to take actions against Bitcoinica.

on #3:

I'm not protecting his identity. I just deem it to be unnecessary at this point. He is not running away (AFAIK he doesn't even have a passport), and the fund return is pending Bitcoinica's liquidation.

on #4:

I didn't take possession of any part of the stolen funds myself. The $40,000 is still with Chen Jianhai because I was allowed to not facilitate the return of this portion until the AurumXchange issue sorted out. I have asked the creditors to push AurumXchange to transfer all the locked funds to Bitcoinica as well. You can do the same if you like.

[repentance]

@Zhou How do you in all seriousness propose to return the remaining 40.000?

I had a conversation via email with Zhou earlier this week and this is what he told me:

I'm willing to personally commit the liability after the liquidation is done for the shortfall of funds, paid back from the profits in my future businesses.

It is nice of Zhou to suggest this but I don't think it is very practical, nor would it be ethical for creditors to accept Zhou's money if he really is innocent. Is anyone going after Chen?

Honestly, this sounds like an attempt to avoid being named in any lawsuits related to the collapse of Bitcoinica and/or being pursued by a liquidator for the recovery of funds.  In theory, creditors whose combined claims total 75% of the total owed can accept payment arrangements but it's really, really unlikely that a liquidator is going to ignore the criminal aspect of Bitcoinica's failure.  

Liquidators have some discretion, but it's not absolute and any liquidator who did not seek Zhou's active co-operation in providing information about Chen would be taking a substantial risk - liquidators have legal liability for the manner in which they administer insolvent estates.  In this particular case, I think there's zero chance that a liquidator is going to be able to avoid investigating the issues of personal liability of those connected with Bitcoinica and their connections to any criminal activity - there'd be a flurry of complaints to the Registrar of the Insolvency and Trustee Service if that happened and a very real possibility that the private liquidator would be replaced by the Official Assignee.

No-one can "go after Chen" unless Zhou is willing to provide all the information he has about Chen in order for that line of enquiry to be pursued.

#4 is a bullshit answer.  There is no reason whatsoever why Zhou's "friend's" funds on AurumXchange should be released to Bitcoinica.  Zhou's just using that argument to get people to pressure AurumXchange to release the funds without them verifying the true source and legitimacy of the funds.  According to Zhou, it's the $5,000 AurumXchange transaction which is Chen's, not the $40,000 one.

There is zero reason for Chen not to pay the remaining $40,000 to Patrick Murck other than Zhou's desire to use that money as leverage for getting the AurumXchange account unlocked.  That he's doing so strongly suggests that he's unable to prove the source and origin of the AurumXchange funds - otherwise he'd have done so by now and the funds would have either been paid to Bitcoinica or returned to Zhou's "friend".

Zhou always wants to come out of every shit-storm looking like a hero.  It's probably not going to happen this time because it's not just this community who'll be judging his role in the fall of Bitcoinica.

[sarpar]

Zhou addressed some of those concerns to me so I will quote them here.

on #1:

Bitcoinica announced the exchange rate to be $5.1 per BTC. At this rate, all funds have been recovered. I personally feel unfair too, that's why I suggest you to take actions against Bitcoinica.

on #3:

I'm not protecting his identity. I just deem it to be unnecessary at this point. He is not running away (AFAIK he doesn't even have a passport), and the fund return is pending Bitcoinica's liquidation.

on #4:

I didn't take possession of any part of the stolen funds myself. The $40,000 is still with Chen Jianhai because I was allowed to not facilitate the return of this portion until the AurumXchange issue sorted out. I have asked the creditors to push AurumXchange to transfer all the locked funds to Bitcoinica as well. You can do the same if you like.

Ninjarobot - thank you very much for the intelligence. This kind of information should be public.

#1 is this a fact that the numbers add up at 5.1USD/BTC? who can confirm?

#2 haha - I thought that's part of the deal with Chen (according to #4 he holds still 40.000). Besides that he could only benefit making this information public.

#4 He was allowed by WHOM? So he admits taking Bitcoinica's funds hostage for something unrelated?

[ninjarobot]

Honestly, this sounds like an attempt to avoid being named in any lawsuits related to the collapse of Bitcoinica and/or being pursued by a liquidator for the recovery of funds.

Possibly. He certainly did his best to avoid being named in lawsuits (who can blame him?):

I contributed 5,000 BTC and talked to the creditors regularly exactly because I wanted to avoid any lawsuits against me.

Anyway, I will now stop selectively quoting Zhou from the conversation I had with him this week. If Zhou agrees, I would be happy to make the entire conversation public.

[repentance]

#4 He was allowed by WHOM? So he admits taking Bitcoinica's funds hostage for something unrelated?

Zhou may have misled Patrick Murck about the funds on AurumXchange. Patrick seemed unaware of Zhou claiming those funds belong to a "friend" (not Chen) of Zhou's on whose behalf he conducted a transaction.

https://bitcointalk.org/index.php?topic=97272.msg1098392#msg1098392

[repentance]

Wont the liquidator sell the bitcoins and only deal in USD ?

Possibly NZD, but yes - they'll liquidate the assets and pay people in dollars, whether the assets are BTC, diamonds, bananas, or shares in Berkshire Hathaway.

[MelMan2002]

Zhou addressed some of those concerns to me so I will quote them here.

on #1:

Bitcoinica announced the exchange rate to be $5.1 per BTC. At this rate, all funds have been recovered. I personally feel unfair too, that's why I suggest you to take actions against Bitcoinica.

#1 is this a fact that the numbers add up at 5.1USD/BTC? who can confirm?

To be clear - there is no magical number that the numbers add up to.  It is arbitrary.  Move that rate up and some people lose more while others gain more.  Now, technically if you moved it too high then it would be past the point of liquidation for those that shorted and you would be short on funds to payout those that went long.

But Bitcoinica had a good month of stability in btc price to payout and they failed to do so - so they should have to pay the difference.  And if they don't have the funds then the loss is spread between those in long positions.

But the bottom line is that the exchange rate should be the rate at the time that the money is paid out.  Either that or they take the highest rate between then and when paid out for long positions and the lowest rate between then and when paid out for short positions and close at those rates and then spread the loss between all those that held positions (as a percentage of the gains made from their positions).

Zhou had mentioned possibly picking a number in that range before (if he were running the show) because he figured that the payouts would happen as quickly as possible so any price change would be insignificant.

Bitcoinica seems to have chosen that number because presumably it was more favorable for those that were buddy-buddy with Tihan.  I can't think of any other reason to do so.

[ninjarobot]

I think that what Zhou was saying is that the 20K BTC + 140K USD that he is able to recover from Chen would cover the 40K BTC + 40K USD stolen from MtGox if you apply the ~$5 conversion rate that Bitcoinica used to close open positions.

I would argue that property should be returned in the same form it was originally stolen.

[repentance]

I think that what Zhou was saying is that the 20K BTC + 140K USD that he is able to recover from Chen would cover the 40K BTC + 40K USD stolen from MtGox if you apply the ~$5 conversion rate that Bitcoinica used to close open positions.

I would argue that property should be returned in the same form it was originally stolen.

BTC weren't worth $5 when the MtGox theft occurred though.  Had those 40k BTC never left MtGox, they'd be worth around $400,000 now.  Because only 20k Bitcoin were returned, the value of the returned BTC is around $200,000.  Even though the total recovered is about the same as the total amount stolen in July (~$280,000 in Bitcoins plus USD 40,000), about $100,000 in value has been lost as the current value of 40,000 BTC is about $400,000. 

Zhou is effectively saying that because the value of Bitcoins has increased, the amount recovered from Chen already covers the value of the theft at the time it occurred.  Frankly, I'm not sure why Bitcoinica users should give a shit about this, though and why Chen shouldn't pay a premium for the additional losses caused by the theft - Chen should not be the one to profit from the increase in the value of BTC since the theft.

[MemoryDealers]

I had Bitcoins on deposit and I expect Bitcoins to be returned.
I don't care if Bitcoins are worth $1 or $1,000

I suspect the other creditors feel the same way.

[Bitcoin Oz]

I had Bitcoins on deposit and I expect Bitcoins to be returned.
I don't care if Bitcoins are worth $1 or $1,000

I suspect the other creditors feel the same way.

Im sorry to say it probably wont work that way and they will simply liquidate all the coins and pay out proportionally the value at the time the hack happened. Thats the way administration works and unfortunately only fiat is accepted "as payment for debts". It doesnt matter what the underlying asset is as everything will be converted to government fiat. Thats the problem with going to the existing legal system not private arbitration.

Edit: What I mean is that I doubt the administrator will buy bitcoins but sell them for fiat and then divide the fiat between creditors.

[repentance]

I had Bitcoins on deposit and I expect Bitcoins to be returned.
I don't care if Bitcoins are worth $1 or $1,000

I suspect the other creditors feel the same way.

Perhaps you could petition the court for your Bitcoinica deposits to be returned as Bitcoins in your lawsuit.  The court certainly has more flexibility in respect of remedies than a liquidator, who is required by law to liquidate assets for the benefit of all creditors.

Even if a liquidator could return deposits as Bitcoins, they still couldn't return them in a greater proportion than what was being returned to those owed USD - someone who was owed Bitcoins to the value of $50 immediately after the Rackspace hack (~10 BTC then) would still only be able to claim BTC to that value now (~5 BTC now) and not an absolute number of BTC.

[markm]

Even if a liquidator could return deposits as Bitcoins, they still couldn't return them in a greater proportion than what was being returned to those owed USD - someone who was owed Bitcoins to the value of $50 immediately after the Rackspace hack (~10 BTC then) would still only be able to claim BTC to that value now (~5 BTC now) and not an absolute number of BTC.

Whoa, you cannot sell off items held in trust on behalf of one client in order to settle a debt you owe to another client, surely???

If 100 collectors each had a painting on deposit at a gallery, and the paintings were stolen, and some of them were burned, destroyed, by the time the stolen property was captured back from the thieves by lawful authorities, and the gallery is bankrupt, does the liquidator have to sell the paintings belonging to other collectors in order to obtain funds with which to recompense the collectors whose paintings were lost??? And maybe also to recompense buyers who had fiat money stored at the gallery ready to buy paintings, which fiat also had been stolen along with the paintings but not recovered or only partially recovered?

-MarkM-

[Bitcoin Oz]

Even if a liquidator could return deposits as Bitcoins, they still couldn't return them in a greater proportion than what was being returned to those owed USD - someone who was owed Bitcoins to the value of $50 immediately after the Rackspace hack (~10 BTC then) would still only be able to claim BTC to that value now (~5 BTC now) and not an absolute number of BTC.

Whoa, you cannot sell off items held in trust on behalf of one client in order to settle a debt you owe to another client, surely???

If 100 collectors each had a painting on deposit at a gallery, and the paintings were stolen, and some of them were burned, destroyed, by the time the stolen property was captured back from the thieves by lawful authorities, and the gallery is bankrupt, does the liquidator have to sell the paintings belonging to other collectors in order to obtain funds with which to recompense the collectors whose paintings were lost??? And maybe also to recompense buyers who had fiat money stored at the gallery ready to buy paintings, which fiat also had been stolen along with the paintings but not recovered or only partially recovered?

-MarkM-

You cant tell the difference from one bitcoin to the other but you can with art.

[markm]

You cant tell the difference from one bitcoin to the other but you can with art.

Sure, but you can also tell the difference between fiat and bitcoin.

Also, for art you can assume non-numbered limited edition prints instead of non-identical paintings if you like it still should apply, though as it could not be determined whose prints were burned versus whose prints survived, I could see doing some kind of auction among print owners to determine who gets to keep a print and who instead gets compensated in currency by the other print owners for accepting fiat instead of a print.

(e.g. if 70% of the prints survived, each print owner is owed 70% of a print, aka has a 70% chance of getting his or an indistinguishable print back, somehow among themselves they need to resolve which of them will settle for some kind of compensation versus which will actually get a print.)

-MarkM-

[Bitcoin Oz]

You cant tell the difference from one bitcoin to the other but you can with art.

Sure, but you can also tell the difference between fiat and bitcoin.

Also, for art you can assume non-numbered limited edition prints instead of non-identical paintings if you like it still should apply, though as it could not be determined whose prints were burned versus whose prints survived, I could see doing some kind of auction among print owners to determine who gets to keep a print and who instead gets compensated in currency by the other print owners for accepting fiat instead of a print.

(e.g. if 70% of the prints survived, each print owner is owed 70% of a print, aka has a 70% chance of getting his or an indistinguishable print back, somehow among themselves they need to resolve which of them will settle for some kind of compensation versus which will actually get a print.)

-MarkM-

Sure. But the difference is fiat is legal tender accepted for all debts whereas bitcoin is not. An administrator can only distribute fiat because he cant tell who the owner of a particular coin is.

[markm]

Sure. But the difference is fiat is legal tender accepted for all debts whereas bitcoin is not. Therefore  an administrator can only distribute fiat.

Not true. I am not a lawyer but I seriously doubt that just because you CAN pay a debt in fiat you MUST convert items held in trust into fiat in preference to returning the actual items to their rightful owners. An item held in trust is not a debt. The items stolen might be debts, but the items not stolen remain property of their owners, presumably?

Also, even though you cannot tell the difference between one "print" and another, you CAN tell the difference between the values / prices of some of the prints, since some owners had put different price tickets on their prints than other owners had. I admit though that at this point you have turned my argument around from looking like people might get actual bitcoins or current fiat value of bitcoins into them getting the price they had labelled their particular bitcoins to be sold for when the theft occurred... So well done.

-MarkM-

[Bitcoin Oz]

Sure. But the difference is fiat is legal tender accepted for all debts whereas bitcoin is not. Therefore  an administrator can only distribute fiat.

Not true. I am not a lawyer but I seriously doubt that just because you CAN pay a debt in fiat you MUST convert items held in trust into fiat in preference to returning the actual items to their rightful owners. An item held in trust is not a debt. The items stolen might be debts, but the items not stolen remain property of their owners, presumably?

Also, even though you cannot tell the difference between one "print" and another, you CAN tell the difference between the values / prices of some of the prints, since some owners had put different price tickets on their prints than other owners had. I admit though that at this point you have turned my argument around from looking like people might get actual bitcoins or currenct fiat value of bitcoins into them getting the price they had labelled their particular bitcoins to be sold for when the theft occurred... So well done.

-MarkM-

When a company is wound down all of its assets are consolidated and creditors get paid out evenly on a percentage basis.

[markm]

When a company is wound down all of its assets are consolidated and creditors get paid out evenly on a percentage basis.

[ Items/assets held in trust] / [ trust accounts ] are not assets. If anything, they are liabilities. The company does not own them.

Isn't that in fact the entire point of labelling certain accounts as trust accounts? To distinguish them as NOT belonging to the entity holding them in trust and thus for them NOT to be used to pay that entity's bills/liabilities?

Stuff stolen from trust accounts is surely totally separate and distinct from a company's own assets, and none of the company's creditors should be able to touch it, only the people who actually have assets in a particular trust account should get anything from that particular trust account, surely? Isn't that also why lawyers often hold many separate trust accounts, with different people's assets in each, so those people's assets cannot be confused with each other or used to pay off each other's debts etc?

-MarkM-

EDIT: Maybe this could even be an argument in favour of the satoshi client style wallet accounts, since if bitcoins are stolen it is possible to determine precisely which accounts were stolen, so the theft of one such trust account need not have any effect on any other such trust account?

[Bitcoin Oz]

When a company is wound down all of its assets are consolidated and creditors get paid out evenly on a percentage basis.

[ Items/assets held in trust] / [ trust accounts ] are not assets. If anything, they are liabilities. The company does not own them.

Isn't that in fact the entire point of labelling certain accounts as trust accounts? To distinguish them as NOT belonging to the entity holding them in trust and thus for them NOT to be used to pay that entity's bills/liabilities?

Stuff stolen from trust accounts is surely totally separate and distinct from a company's own assets, and none of the company's creditors should be able to touch it, only the people who actually have assets in a particular trust account should get anything from that particular trust account, surely? Isn't that also why lawyers often hold many separate trust accounts, with different people's assets in each, so those people's assets cannot be confused with each other or used to pay off each other's debts etc?

-MarkM-

Everything went into a single wallet. For that not to be the case they would need to give each customer their own separate wallet.

[markm]

Everything went into a single wallet. For that not to be the case they would need to give each customer their own separate wallet.

Wallets vs accounts are like banks into accounts.

If everything went into a single bank, into distinct trust accounts within that bank, and thieves stole certain trust accounts, the whole point, again, of trust accounts is that they are distinct. You know which ones the robbers took.

Even if they took the entire bank.

-MarkM-

EDIT: Nearly tricked me there! Fiat was in a separate wallet, presumably?

[Bitcoin Oz]

When a company is wound down all of its assets are consolidated and creditors get paid out evenly on a percentage basis.

[ Items/assets held in trust] / [ trust accounts ] are not assets. If anything, they are liabilities. The company does not own them.

Isn't that in fact the entire point of labelling certain accounts as trust accounts? To distinguish them as NOT belonging to the entity holding them in trust and thus for them NOT to be used to pay that entity's bills/liabilities?

Stuff stolen from trust accounts is surely totally separate and distinct from a company's own assets, and none of the company's creditors should be able to touch it, only the people who actually have assets in a particular trust account should get anything from that particular trust account, surely? Isn't that also why lawyers often hold many separate trust accounts, with different people's assets in each, so those people's assets cannot be confused with each other or used to pay off each other's debts etc?

-MarkM-

EDIT: Maybe this could even be an argument in favour of the satoshi client style wallet accounts, since if bitcoins are stolen it is possible to determine precisely which accounts were stolen, so the theft of one such trust account need not have any effect on any other such trust account?

 You would have to have segregated wallets so if one customer gets theirs stolen it doesnt compromise someone elses balance. I dont know any site that does this.

[markm]

Oops I was a moment late with my

EDIT: Nearly tricked me there! Fiat was in a separate wallet, presumably?

-MarkM-

[Bitcoin Oz]

Oops I was a moment late with my

EDIT: Nearly tricked me there! Fiat was in a separate wallet, presumably?

-MarkM-

Of course you would need to label each wallet.dat differently and im not sure if thats supported by bitcoin  ?

Then you could tell the difference between ROGERWALLET.DAT and ZHOUWALLET.DAT

[markm]

Of course you would need to label each wallet.dat differently and im not sure if thats supported by bitcoin  ?

Then you could tell the difference between ROGERWALLET.DAT and ZHOUWALLET.DAT

You don't understand what I mean by satoshi client style accounts within wallets, it seems.

Read up on the accounts commands provided by the satoshi bitcoind.

The GUI might even also mention them.

In brief, accounts are distinct collections of addresses within a wallet, their balances being thus the sum of the balances of the addresses associated with that specific account.

So you could label each account with a username for example... within a single wallet.

BUT, AGAIN: fiat is totally separate. Even if all customer-owned fiat is in one fiat trust account and all customer-owned bitcoins in one bitcoin trust account, those are two totally distinct trust accounts.

-MarkM-

[repentance]

Whoa, you cannot sell off items held in trust on behalf of one client in order to settle a debt you owe to another client, surely???

Nothing was held "in trust" in any meaningful sense of the word.  A ledger of balances was maintained and when the available funds are not enough to cover those balances you can't say that 100% of one person's balance is still available but only 50% of another's if both people are unsecured creditors and neither has a preferential claim.  It wouldn't matter whether the item was gold ingots, diamonds or BTC, if it's not secured then it's likely going to be sold and consolidated for the benefit of all creditors.  In fact, as the majority of Bitcoinica losses have been in BTC, it may be the people whose deposits were in USD who are ultimately worse off as the available USD won't be quarantined (and even more USD are available now because Chen paid back primarily in USD).

People really, really need to understand that they're not dealing with regulated deposit-taking institutions or actual trust accounts.   Your Bitcoinica account isn't like a safe deposit box which was robbed individually.  The thefts are more like money being taken from the vault - it didn't belong to anyone in particular but creates a universal short-fall.

The art gallery example isn't comparable because the paintings would be on loan to the gallery and not regarded as an asset or a liability of the gallery.

This would not be an issue if Bitcoinica wasn't insolvent and if the majority of creditors agreed to alternative payments arrangements - they could agree to repayment in kiwifruit if they wanted.  The problem arises because of the legal requirement to treat all creditors of the same class - in this case, all unsecured creditors - equally.  Everyone could be paid back in Bitcoins as long as the proportion of their total claim which each person received was the same (it's not going to happen because it's not practical), but the value of the claim would still need to be determined in dollars even if the refunds were made in Bitcoins.

[markm]

Thank you, repentence.

Part of my interest in this is forward-looking.

It already occurred to me that if I would like accounts to be considered as being held in trust I should make sure my heirs and assigns, or whoever steps in to run things if I get run over by a bus, knows exactly which accounts are considered held in trust and which are considered to be part of the operation's own operating capital/assets...

-MarkM-

[Bitcoin Oz]

Whoa, you cannot sell off items held in trust on behalf of one client in order to settle a debt you owe to another client, surely???

Nothing was held "in trust" in any meaningful sense of the word.  A ledger of balances was maintained and when the available funds are not enough to cover those balances you can't say that 100% of one person's balance is still available but only 50% of another's if both people are unsecured creditors and neither has a preferential claim.  It wouldn't matter whether the item was gold ingots, diamonds or BTC, if it's not secured then it's likely going to be sold and consolidated for the benefit of all creditors.  In fact, as the majority of Bitcoinica losses have been in BTC, it may be the people whose deposits were in USD who are ultimately worse off as the available USD won't be quarantined (and even more USD are available now because Chen paid back primarily in USD).

People really, really need to understand that they're not dealing with regulated deposit-taking institutions or actual trust accounts.   Your Bitcoinica account isn't like a safe deposit box which was robbed individually.  The thefts are more like money being taken from the vault - it didn't belong to anyone in particular but creates a universal short-fall.

The art gallery example isn't comparable because the paintings would be on loan to the gallery and not regarded as an asset or a liability of the gallery.

This would not be an issue if Bitcoinica wasn't insolvent and if the majority of creditors agreed to alternative payments arrangements - they could agree to repayment in kiwifruit if they wanted.  The problem arises because of the legal requirement to treat all creditors of the same class - in this case, all unsecured creditors - equally.  Everyone could be paid back in Bitcoins as long as the proportion of their total claim which each person received was the same (it's not going to happen because it's not practical), but the value of the claim would still need to be determined in dollars even if the refunds were made in Bitcoins.

Thanks for explaining it 

[DeathAndTaxes]

Of course you would need to label each wallet.dat differently and im not sure if thats supported by bitcoin  ?

Then you could tell the difference between ROGERWALLET.DAT and ZHOUWALLET.DAT

You don't understand what I mean by satoshi client style accounts within wallets, it seems.

Read up on the accounts commands provided by the satoshi bitcoind.

The GUI might even also mention them.

In brief, accounts are distinct collections of addresses within a wallet, their balances being thus the sum of the balances of the addresses associated with that specific account.

So you could label each account with a username for example... within a single wallet.

BUT, AGAIN: fiat is totally separate. Even if all customer-owned fiat is in one fiat trust account and all customer-owned bitcoins in one bitcoin trust account, those are two totally distinct trust accounts.

-MarkM-

Accounts in the Satoshi wallet don't work that way.  They are meaning an accounting mechanism.  When you deposit $100 at your local bank and the teller increases the balance on your account they don't hand carry your $100 bill and place it in your personal vault so when you withdraw $100 the next day you get the same bill back.  They just give you any depositors bill and deduct $100 from your account balance.  The satoshi wallet account system works exactly the same way.  If a wallet had 500K BTC and 250K BTC were stolen there would be no way to determine "who's" 250K was stolen. 

Ironically I have never ever seen someone use an example involving accounts which wasn't completely inaccurate.

[markm]

Accounts in the Satoshi wallet don't work that way.

Ironically I have never ever seen someone use an example involving accounts which wasn't completely inaccurate.

Oh wonderful. So basically they don't actually work the way the rpc commands make them seem to work / imply they work?

-MarkM-

[DeathAndTaxes]

Accounts in the Satoshi wallet don't work that way.

Ironically I have never ever seen someone use an example involving accounts which wasn't completely inaccurate.

Oh wonderful. So basically they don't actually work the way the rpc commands make them seem to work / imply they work?
-MarkM-

Nope.  It comes up at least 2-3 times per month.  Sometimes involves heated debates but they work exactly the same as any "mixed funds" banking system works.  Honestly I don't know of any enterprise which uses them.  Most people who think it would be useful for their needs end up thinking that based on a mistaken understanding of how they work.

[markm]

Hmm, I did know that fees get suspiciously "stolen", not necessarily coming from the "account" whose transaction the fee is "for", but all the stuff about associating addresses with "accounts" is bogus too???

Re "secured" assets:

I am a bit fuzzy on what "secured" might be intended to mean, too. For example my Open Transactions server provides tokens "secured" by coins in wallets, but it is far from clear that this means they are "secured" assets or even that the actual coins in the wallets are "secured"...

-MarkM-

[DeathAndTaxes]

Hmm, I did know that fees get suspiciously "stolen", not necessarily coming from the "account" whose transaction the fee is "for", but all the stuff about associating addresses with "accounts" is bogus too???

It works exactly like a bank ledger does.

If you have address 1234 which is account A and address 198765 which is account B then

if you receive 10 BTC @ address 1234 the BALANCE (nothing more just the balance in the ledger) for account A is increased.
if you receive 5 BTC @ address 198765 the BALANCE (nothing more just the balance in the ledger) for account B is increased.

If you then spend 5 BTC from account A the BALANCE is reduced from 10 BTC to 5 BTC but the actual coins can come from any valid output in the wallet (i.e. the 10 BTC to 1234 may not be used).  If you then spend 10 BTC from account A again the balance will reduced from 5 BTC to -5 BTC and the actual coins can come from any valid output in the wallet.

Once again exactly how a bank ledger works.

[markm]

Ahhh, I see. I did not know that. I guess I was imagining a certain amount of "coin control" was implied that isn't actually in there. Thanks.

-MarkM-

[Bitcoin Oz]

Hmm, I did know that fees get suspiciously "stolen", not necessarily coming from the "account" whose transaction the fee is "for", but all the stuff about associating addresses with "accounts" is bogus too???

It works exactly like a bank ledger does.

If you have address 1234 which is account A and address 198765 which is account B then

if you receive 10 BTC @ address 1234 the BALANCE (nothing more just the balance in the ledger) for account A is increased.
if you receive 5 BTC @ address 198765 the BALANCE (nothing more just the balance in the ledger) for account B is increased.

If you then spend 5 BTC from account A the BALANCE is reduced from 10 BTC to 5 BTC but the actual coins can come from any valid output in the wallet (i.e. the 10 BTC to 1234 may not be used).  If you then spend 10 BTC from account A again the balance will reduced from 5 BTC to -5 BTC and the actual coins can come from any valid output in the wallet.

Once again exactly how a bank ledger works.

The only way to keep separate "accounts" is to segregate each wallet.dat

[markm]

But, fiat banks nonetheless do have things referred to as "trust accounts", and so do lawyers etc who actually put the fiat of those accounts into banks.

So if banks actually mixing up which coin or bill belongs to who does not render their so called "trust accounts" a null concept / invalid concept why should the details of how wallets work in bitcoin invalidate the same concept when it it merely exhibits the same gaping holes/loopholes?

-MarkM-

[Bitcoin Oz]

But, fiat banks nonetheless do have things referred to as "trust accounts", and so do lawyers etc who actually put the fiat of those accounts into banks.

So if banks actually mixing up which coin or bill belongs to who does not render their so called "trust accounts" a null concept / invalid concept why should the details of how wallets work in bitcoin invalidate the same concept when it it merely exhibits the same gaping holes/loopholes?

-MarkM-

Theres a lot about the banking system that doesnt make sense 

[Bitcoin Oz]

But, fiat banks nonetheless do have things referred to as "trust accounts", and so do lawyers etc who actually put the fiat of those accounts into banks.

So if banks actually mixing up which coin or bill belongs to who does not render their so called "trust accounts" a null concept / invalid concept why should the details of how wallets work in bitcoin invalidate the same concept when it it merely exhibits the same gaping holes/loopholes?

-MarkM-

Theres a thing  called the FDIC which insures all deposits.

[DeathAndTaxes]

But, fiat banks nonetheless do have things referred to as "trust accounts", and so do lawyers etc who actually put the fiat of those accounts into banks.

So if banks actually mixing up which coin or bill belongs to who does not render their so called "trust accounts" a null concept / invalid concept why should the details of how wallets work in bitcoin invalidate the same concept when it it merely exhibits the same gaping holes/loopholes?

-MarkM-

Even there funds aren't kept physically separate.  When a trust account gets a deposit it gets recorded on the ledger and the cash put in the banks vault with all other deposits.  There is no account in any bank where your funds are held seperate.  Banks work on the principal of fractional reserves.  Funds which can't be borrowed against to create new money out of thin air aren't very useful to banks.


A trust/escrow account simply means there are certain increased accounting and reporting requirements (as well as legal penalties) at the physical level they work exactly the same as any other account.

The only concept in a bank which would be completely separated funds would be a safety deposit box.  However that really isn't banking honestly you are just renting some private space in a vault.  It doesn't even require a bank there are private safety deposit box companies too.

[repentance]

Thank you, repentence.

Part of my interest in this is forward-looking.

It already occurred to me that if I would like accounts to be considered as being held in trust I should make sure my heirs and assigns, or whoever steps in to run things if I get run over by a bus, knows exactly which accounts are considered held in trust and which are considered to be part of the operation's own operating capital/assets...

-MarkM-

All services should segregate their own money from user's money.  They don't need trust accounts to do this, but they do need sufficient reserves of their own to cover expected daily/weekly transactions and other operating costs.  And yes, it would be helpful if users knew what the policies regarding deceased accounts are for each service they deal with.  For those services which require a significant amount of verification, it should be easy for the executor of a deceased estate to establish the legitimacy of a claim to the account (or for users to make specific bequests of accounts in their will).  It's likely going to be a much more problematic issue with services which don't require any significant user verification, though.

Failure to segregate user funds when you accept money on deposit from people is a big deal.  It brought down one of the online poker providers that the US DoJ went after - it's not an issue which is only relevant to Bitcoin services.

A "secured" creditor is someone who has a secured claim - usually against a specific asset.  A personal loan from your bank is generally unsecured but a motor vehicle or home loan is generally secured - the lender can take control of the asset and sell it if you default and if you owe 7,000 other people money as well, that asset is not available to satisfy their claims until the secured creditor's claim has been satisfied first.  Sometimes security takes the form of a lien over something other than physical property.

Receivers deal only with the interests of secured creditors so the fact that Bitcoinica is going through as receiver before it goes into liquidation means there's at least one secured creditor.  We're presuming it's Wendon because Tihan said that funds they obtain via receivership will be made available to the liquidator for distribution to unsecured creditors.  We don't know what the secured asset is (the domain and IP are the first things which spring to mind), but there'd be little point in pursuing receivership if it had no value.

[markm]

Bottom line is, if I have a shitload of client fiat funds in the Royal Bank of Canada that I am holding in trust for those clients, and a shitload of bitcoins in bitcoin wallets I am holding in trust for possibly completely distinct separate clients, and a bunch of devcoins similarly, and a bunch of namecoins similarly, etcetera etcetera etcetera, how should I set things up if I want to ensure that if/when the FDIC and Royal Bank and government of Canada screw us out of the (value of the?) fiat it is only those clients who were foolish enough to have fiat in trust instead of cryptocoins in trust that suffer the loss?

-MarkM-

[DeathAndTaxes]

Bottom line is, if I have a shitload of client fiat funds in the Royal Bank of Canada that I am holding in trust for those clients, and a shitload of bitcoins in bitcoin wallets I am holding in trust for possibly completely distinct separate clients, and a bunch of devcoins similarly, and a bunch of namecoins similarly, etcetera etcetera etcetera, how should I set things up if I want to ensure that the FDIC and Royal Bank and government of Canada screw us out of the fiat it is only those clients who were foolish enough to have fiat in trust instead of cryptocoins in trust that suffer the loss?

-MarkM-

Get a lawyer.  It is possible you could word the contract in such a way that you aren't accepting coin deposits merely offering secure storage of the user's coins.  That combined with using physically isolated wallets should be sufficient however if you likely would want a lawyer to be sure.  The fun thing is this is all new area for the law.   Likely a lawyer who is familiar with bullion storage may have some insight into how to word the contracts. 

[Bitcoin Oz]

Bottom line is, if I have a shitload of client fiat funds in the Royal Bank of Canada that I am holding in trust for those clients, and a shitload of bitcoins in bitcoin wallets I am holding in trust for possibly completely distinct separate clients, and a bunch of devcoins similarly, and a bunch of namecoins similarly, etcetera etcetera etcetera, how should I set things up if I want to ensure that if/when the FDIC and Royal Bank and government of Canada screw us out of the (value of the?) fiat it is only those clients who were foolish enough to have fiat in trust instead of cryptocoins in trust that suffer the loss?

-MarkM-

If a bank closes down I dont know how they treat safety deposit boxes.

[markm]

Wow. I am leaning back toward thinking the safest way to handle cryptocoins might be to have a deadman switch that sends them all out to their actual owners automatically if only I can merely delay the vultures from decrypting the key-storage long enough for that deadman switch to kick in...

-MarkM-

[Bitcoin Oz]

Wow. I am leaning back toward thinking the safest way to handle cryptocoins might be to have a deadman switch that sends them all out to their actual owners automatically if only I can merely delay the vultures from decrypting the key-storage long enough for that deadman switch to kick in...

-MarkM-

Thats where multi sig comes in I guess 

[repentance]

But, fiat banks nonetheless do have things referred to as "trust accounts", and so do lawyers etc who actually put the fiat of those accounts into banks.

So if banks actually mixing up which coin or bill belongs to who does not render their so called "trust accounts" a null concept / invalid concept why should the details of how wallets work in bitcoin invalidate the same concept when it it merely exhibits the same gaping holes/loopholes?

-MarkM-

A trust account is a specific type of account where someone has at least temporary control of funds on behalf of another.  By definition, someone must act as trustee of the account which renders them legally liable for the way the funds are used while under their control (which is why lawyers, accountants, real estate agents etc have fidelity funds/insurance in respect of funds held in trust).  Trust accounts generally accept funds on behalf of someone else.  You might pay your rent to your real estate agent, who deposits that money into their trust account and then forwards the rent to the owner after deducting management fees.  If you win a lawsuit, the settlement will be paid into your lawyer's trust account and you'll be paid from that account after any relevant disbursements have been made.  Accounts opened for deceased estates are essentially trust accounts.  

A normal transaction account at your bank or an account on a Bitcoin exchange is not a trust account.

[markm]

It occurs to me that with the way Open Transactions works, what is happening when actual fiat or coins used to "back" a token ("asset") in the server vanish is simply that that specific asset type has become a "fractional reserve" asset. So if bitcoins get stolen, oh dear the bitcoin tokens are now fractional reserve bitcoin tokens no longer fully backed bitcoin tokens. If the devcoins, however, are still secure, then the devcoin tokens are still fully backed...

-MarkM-

[Bitcoin Oz]

It still doesnt explain why all of their coins and fiat was sitting at mt gox because at least the bitcoins can be payed out from a cold wallet....there is 0 reason for them to be deposited with a third party

[repentance]

It still doesnt explain why all of their coins and fiat was sitting at mt gox because at least the bitcoins can be payed out from a cold wallet....there is 0 reason for them to be deposited with a third party

After the Linode hack people were screaming at them for not having their Bitcoins on MtGox because MtGox was perceived to be safer.  I suspect that during the claims process a lot of people used their MtGox history to verify their claim and it was simply easier to make refunds of both USD and BTC from the MtGox account (and have an independent record of those refunds).  There's no reason to believe that other important credentials weren't stored on LastPass, including the keys to hot and cold wallets.  Too many people had access to LastPass and - by extension - the accounts for which it held credentials.

[lonelyminer (Peter Šurda)]

The problem arises because of the legal requirement to treat all creditors of the same class - in this case, all unsecured creditors - equally.  Everyone could be paid back in Bitcoins as long as the proportion of their total claim which each person received was the same (it's not going to happen because it's not practical), but the value of the claim would still need to be determined in dollars even if the refunds were made in Bitcoins.

Purely logically, ensuring equal payouts this does not require that all the funds are converted to NZD. If more BTC than USD are missing, there is no technical obstacle in using a proportion of the USD to buy BTC at spot price, which would also determine the settlement ratios and with respect to that, everyone would be treated equally. The problem of fluctuating rates causing temporal inequalities occurs irrespective of how the payouts are organised, since the exchange rates of all the involved currencies fluctuate, so a particular spot exchange rate would need to be chosen anyway.

Since Bitcoinica only accepted USD and BTC, I suppose many of the creditors would object to being returned NZD. And once the liquidator abandons the idea of NZD-denominated refunds, I don't see him being legally obligated to use USD in preference to BTC. None of these are legal tender in New Zealand.

[coinft]

You cant tell the difference from one bitcoin to the other but you can with art.

Not true. Bitcoins have a unique generation and spending history stored in the block chain.

Although I can't imagine someone refusing refunded bitcoins because they are not "his".

[Bitcoin Oz]

You cant tell the difference from one bitcoin to the other but you can with art.

Not true. Bitcoins have a unique generation and spending history stored in the block chain.

Although I can't imagine someone refusing refunded bitcoins because they are not "his".

I meant you cant tell who the owner of any bitcoin is unless you encoded a dna string into the coinbase somehow 

[coinft]

You cant tell the difference from one bitcoin to the other but you can with art.

Not true. Bitcoins have a unique generation and spending history stored in the block chain.

Although I can't imagine someone refusing refunded bitcoins because they are not "his".

I meant you cant tell who the owner of any bitcoin is unless you encoded a dna string into the coinbase somehow 

I don't want to know how you "encode" your DNA on your "picture collection".

[Bitcoin Oz]

You cant tell the difference from one bitcoin to the other but you can with art.

Not true. Bitcoins have a unique generation and spending history stored in the block chain.

Although I can't imagine someone refusing refunded bitcoins because they are not "his".

I meant you cant tell who the owner of any bitcoin is unless you encoded a dna string into the coinbase somehow 

I don't want to know how you "encode" your DNA on your "picture collection".

They see me mining...

[proudhon]

With all the pirate stuff going on it's easy to forget that the Bitcoinica/Bitcoinica Consultancy/Bitcoin Consultancy/Intersango crew are also responsible for tens of thousands of bitcoin and USD losses to people around here.  I'm sure they're loving the break pirate is giving them.

[repentance]

It's really time for an update on this.  It shouldn't have taken this long to progress to receivership.

Patrick/Tihan, what's the current anticipated timeline for receivership and liquidation?

[tseale]

I too hoped things would be further along by now. The lawyers are looking at skipping receivership and proceeding directly to liquidation. This is intended to save time but nothing in the legal world is fast by bitcoin standards. With luck, the Court will approve a liquidator in September.

[repentance]

I too hoped things would be further along by now. The lawyers are looking at skipping receivership and proceeding directly to liquidation. This is intended to save time but nothing in the legal world is fast by bitcoin standards. With luck, the Court will approve a liquidator in September.

This is good news.  From what you've said, there's nothing to be gained by going through receivership if Wendon is intending to make its recovered entitlements available to all creditors.  It's ridiculous that you've been forced into the situation of requiring court approval for liquidation, though.  Agreement by the general partners to wind up the partnership in voluntary liquidation would have made this process a lot faster and less costly.

[proudhon]

I too hoped things would be further along by now. The lawyers are looking at skipping receivership and proceeding directly to liquidation. This is intended to save time but nothing in the legal world is fast by bitcoin standards. With luck, the Court will approve a liquidator in September.

This is good news.  From what you've said, there's nothing to be gained by going through receivership if Wendon is intending to make its recovered entitlements available to all creditors.  It's ridiculous that you've been forced into the situation of requiring court approval for liquidation, though.  Agreement by the general partners to wind up the partnership in voluntary liquidation would have made this process a lot faster and less costly.

I don't understand why they're being so obstructive.  I mean, they're almost being maliciously obstructive.  I just don't get it.  I will never trust any of those guys ever again and intend to stay as far away as possible from anything they're involved in.

[repentance]

I don't understand why they're being so obstructive.  I mean, they're almost being maliciously obstructive.  I just don't get it.  I will never trust any of those guys ever again and intend to stay as far away as possible from anything they're involved in.

It will be interesting to see whether they ignore the liquidator's requests for co-operation.  Technically, they're required by law to co-operate with the liquidator.  At a practical level, the consequences for failing to do so could be limited given that none of them reside in NZ.  I doubt any of them would be overly concerned about being banned from being directors of NZ entities in the future.  And while a liquidator could find that they have personal liability for the debts of Bitcoinica LP, there's no reason to believe that any of them have sufficient assets for such a finding to be meaningful.

It will be interesting, however, to see whether the liquidator finds any reasons to refer issues related to Bitcoinica to the Serious Fraud Office.

[proudhon]

I don't understand why they're being so obstructive.  I mean, they're almost being maliciously obstructive.  I just don't get it.  I will never trust any of those guys ever again and intend to stay as far away as possible from anything they're involved in.

It will be interesting to see whether they ignore the liquidator's requests for co-operation.  Technically, they're required by law to co-operate with the liquidator.  At a practical level, the consequences for failing to do so could be limited given that none of them reside in NZ.  I doubt any of them would be overly concerned about being banned from being directors of NZ entities in the future.  And while a liquidator could find that they have personal liability for the debts of Bitcoinica LP, there's no reason to believe that any of them have sufficient assets for such a finding to be meaningful.

It will be interesting, however, to see whether the liquidator finds any reasons to refer issues related to Bitcoinica to the Serious Fraud Office.

It will be interesting.  But, hey, in the meantime, let's all go party with them in London!

[davout]

It will be interesting.  But, hey, in the meantime, let's all go party with them in London!

word

[MemoryDealers]

Amir is too busy doing youtube interviews to be bothered with doing the right thing for all the Bitcoinica customers.
http://www.youtube.com/watch?v=2dPAAM_5Dkg

Patrick is too busy threatening me over the lawsuit to be bothered to do the right thing and actually avoid the lawsuit in the process.

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

[MelMan2002]

Amir is too busy doing youtube interviews to be bothered with doing the right thing for all the Bitcoinica customers.
http://www.youtube.com/watch?v=2dPAAM_5Dkg

Patrick is too busy threatening me over the lawsuit to be bothered to do the right thing and actually avoid the lawsuit in the process.

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

Lol @ Patrick's threat.  Doesn't he know that that could land him in even more trouble?

[flower1024]

Amir is too busy doing youtube interviews to be bothered with doing the right thing for all the Bitcoinica customers.
http://www.youtube.com/watch?v=2dPAAM_5Dkg

Patrick is too busy threatening me over the lawsuit to be bothered to do the right thing and actually avoid the lawsuit in the process.

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

Lol @ Patrick's threat.  Doesn't he know that that could land him in even more trouble?

he still thinks he is an unbeatable genius who deserves respect

[deeplink]

Amir is too busy doing youtube interviews to be bothered with doing the right thing for all the Bitcoinica customers.
http://www.youtube.com/watch?v=2dPAAM_5Dkg

Patrick is too busy threatening me over the lawsuit to be bothered to do the right thing and actually avoid the lawsuit in the process.

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

Lol @ Patrick's threat.  Doesn't he know that that could land him in even more trouble?

he still thinks he is an unbeatable genius who deserves fucking respect

FTFY

[muyuu]

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

[mc_lovin]

Amir is too busy doing youtube interviews to be bothered with doing the right thing for all the Bitcoinica customers.
http://www.youtube.com/watch?v=2dPAAM_5Dkg

Patrick is too busy threatening me over the lawsuit to be bothered to do the right thing and actually avoid the lawsuit in the process.

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

Never a dull moment.

[proudhon]

What's the reason they don't have scammer tags?  If "scammer" doesn't suit this situation well, then I propose a tag something like "Don't trust with money", which doesn't necessarily entail scamming, just that at the very least this person has been negligent in some way. 

In any event, because things move so quickly around here and after a few months are apt to get forgotten, I think for the protection of newcommers they ought to be tagged in some way, or we should have a sticky in the main discussion area that lists people who've contributed to significant losses of other people's wealth.

[defxor]

then I propose a tag something like "Don't trust with money", which doesn't necessarily entail scamming, just that at the very least this person has been negligent in some way.

"Incompetent"

[rdponticelli]

then I propose a tag something like "Don't trust with money", which doesn't necessarily entail scamming, just that at the very least this person has been negligent in some way.

"Incompetent"

Irresponsible.

[repentance]

Amir is too busy doing youtube interviews to be bothered with doing the right thing for all the Bitcoinica customers.
http://www.youtube.com/watch?v=2dPAAM_5Dkg

Patrick is too busy threatening me over the lawsuit to be bothered to do the right thing and actually avoid the lawsuit in the process.

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

Is there any end to Patrick's sheer arrogance?  He's not well placed to be threatening anyone.

God I hope that someone at the 2012 conference streams his presentation live.  I suspect that his audience won't be entirely "respectful" during his presentation.

Supreme, irredeemable asshole would be the most appropriate tag for Patrick.

[Vod]

Zhou must have made another donation to the forum - this thread has been "mothballed" and there is now no active thread on general discussion about his $500,000 theft.   

[repentance]

Zhou must have made another donation to the forum - this thread has been "mothballed" and there is now no active thread on general discussion about his $500,000 theft.   

It was inactive because people stopped posting to it - once people stop posting to a thread in the Discussion forum, it falls off the front page fast.

[Matthew N. Wright]

Amir is too busy doing youtube interviews to be bothered with doing the right thing for all the Bitcoinica customers.
http://www.youtube.com/watch?v=2dPAAM_5Dkg

Patrick is too busy threatening me over the lawsuit to be bothered to do the right thing and actually avoid the lawsuit in the process.

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

Is there any end to Patrick's sheer arrogance?  He's not well placed to be threatening anyone.

God I hope that someone at the 2012 conference streams his presentation live.  I suspect that his audience won't be entirely "respectful" during his presentation.

Supreme, irredeemable asshole would be the most appropriate tag for Patrick.

We're streaming it live ^_^

[BadBear]

Zhou must have made another donation to the forum - this thread has been "mothballed" and there is now no active thread on general discussion about his $500,000 theft.   

There wasn't active thread in general before I moved it either  . I'm sure people will be more than happy to make a bunch of new threads when something moves forward.

I wish somebody would pay me for moving all the service related discussions, I'm gonna get carpal tunnel.

[Herodes]

Amir is too busy doing youtube interviews to be bothered with doing the right thing for all the Bitcoinica customers.
http://www.youtube.com/watch?v=2dPAAM_5Dkg

Patrick is too busy threatening me over the lawsuit to be bothered to do the right thing and actually avoid the lawsuit in the process.

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

Never a dull moment.

In my experience, when people agressively try not to cooperate, they have something to hide. PC may be an ass, but he ain't dumb.

[naima53]

What's the reason they don't have scammer tags?  If "scammer" doesn't suit this situation well, then I propose a tag something like "Don't trust with money", which doesn't necessarily entail scamming, just that at the very least this person has been negligent in some way. 

In any event, because things move so quickly around here and after a few months are apt to get forgotten, I think for the protection of newcommers they ought to be tagged in some way, or we should have a sticky in the main discussion area that lists people who've contributed to significant losses of other people's wealth.

Because this is a team of thieves. If before they hid it, now operating openly. In my experience (observation) scammers over time are easier (not hiding) act. [not mask after time]

[Phinnaeus Gage]

Zhou must have made another donation to the forum - this thread has been "mothballed" and there is now no active thread on general discussion about his $500,000 theft.   

There wasn't active thread in general before I moved it either  . I'm sure people will be more than happy to make a bunch of new threads when something moves forward.

I wish somebody would pay me for moving all the service related discussions, I'm gonna get carpal tunnel.

Carpal Tunnelica & Trust LLC
Owner: Brad Bear

I had a feeling about you! 

~Cackling Bear~

[guruvan]

Amir is too busy doing youtube interviews to be bothered with doing the right thing for all the Bitcoinica customers.
http://www.youtube.com/watch?v=2dPAAM_5Dkg

Patrick is too busy threatening me over the lawsuit to be bothered to do the right thing and actually avoid the lawsuit in the process.

[18:31:12] <phantomcircuit> ......, suggest to him strongly to drop the suit
[18:31:23] <phantomcircuit> he's going to regret it more than anything he's ever done in his entire life
[18:32:11] <phantomcircuit> that's a promise

Never a dull moment.

In my experience, when people agressively try not to cooperate, they have something to hide. PC may be an ass, but he ain't dumb.

Yeah, like his complicity in Zhou Tong's thefts?

I lol that fools still use Intersango - that's just a matter of time before it goes belly up and sucks up a bunch of customer funds. Patrick will steal your money if you give him half a chance.

And then threaten you when you try to recover it.

Why no scammer tags, indeed. Who's invested in Intersango besides the three execs?

[repentance]

Who's invested in Intersango besides the three execs?

If I recall correctly, Amir's the only director and Patrick and Donald are shareholders.  Wendon also acquired 250 shares in Intersango in exchange for Amir, Donald and Patrick being given a combined interest of 25% in Bitcoinica LP. 

[dopamine]

why haven't I seen any of my bitcoins yet? I'm sure if we can all get together and create another law suit maybe we will see something happen. This amir fool is going around doing interviews but doesn't talk about bitcoinica fisco on how many people have lost money just waiting for a refund...

[RicePicker]

Seriously how long has it been?

[BadBear]

Zhou must have made another donation to the forum - this thread has been "mothballed" and there is now no active thread on general discussion about his $500,000 theft.   

There wasn't active thread in general before I moved it either  . I'm sure people will be more than happy to make a bunch of new threads when something moves forward.

I wish somebody would pay me for moving all the service related discussions, I'm gonna get carpal tunnel.

Carpal Tunnelica & Trust LLC
Owner: Brad Bear

I had a feeling about you! 

~Cackling Bear~

Dang, time to move onto my next account I guess.

[MelMan2002]

relevant: https://bitcointalk.org/index.php?topic=109316

[MPOE-PR]

Take this with a grain of salt, because it's unsubstantiated rumour at this point, but if it's true it would be enormously helpful to the liquidation process.

Wayne Lee-Archer 2:55 AM
MagicalTux will be travelling to NZ to talk to the recievers regarding
Bitcoinica/Intersango

https://privatepaste.com/5241fafb45

That paste has since been deleted. Anyone have copies?

[Phinnaeus Gage]

Take this with a grain of salt, because it's unsubstantiated rumour at this point, but if it's true it would be enormously helpful to the liquidation process.

Wayne Lee-Archer 2:55 AM
MagicalTux will be travelling to NZ to talk to the recievers regarding
Bitcoinica/Intersango

https://privatepaste.com/5241fafb45

That paste has since been deleted. Anyone have copies?

If you let me lick your toes.   http://webcache.googleusercontent.com/search?q=cache:RvDSS2laRlsJ:pastebin.com/aQuJHsuf+&cd=3&hl=en&ct=clnk&gl=us

...
i 'll keep this confidential and not enquiry Mr Cartmell yet
Wayne Lee-Archer 2:55 AM
MagicalTux will be travelling to NZ to talk to the recievers regarding Bitcoinica/Intersango
Alberto Armandi 2:55 AM
i'll wait for you to come up with confirmations
2:55 AM
ok good, so might be as well that we can arrange a meeting with Mr Cartmell regarding this
Wayne Lee-Archer 2:55 AM
yes, please wait - like i said i dont wanna screw up anyones legal workings (esp Cartmell's tasty work with bitcoinica)
Alberto Armandi 2:56 AM
he could provide some documentation to him for supporting the legal suite
Wayne Lee-Archer 2:56 AM
...

I guess this will work also: http://pastebin.com/aQuJHsuf

[MPOE-PR]

One'd refuse very butch lumberjacks at her peril.



Enjoy.

[Raoul Duke]

That paste has since been deleted. Anyone have copies?

If you let me lick your toes. 

One'd refuse very butch lumberjacks at her peril.

http://polimedia.us/dtng/c/src/13559978937.jpg

Enjoy.

Holy Mother of God! No sleep for 10 days!  Thanks a lot... 

[MPOE-PR]

Holy Mother of God! No sleep for 10 days!

Can you actually go at it for that long?!

[Phinnaeus Gage]

Holy Mother of God! No sleep for 10 days!

Can you actually go at it for that long?!

Psy da man!

I assume that link worked for what you may have needed it for.

BTW, nice toes. Next time I'll more specific and request the dromedary kind.

[davout]

One'd refuse very butch lumberjacks at her peril.



Enjoy.

You could use a pedicure

[Phinnaeus Gage]

One'd refuse very butch lumberjacks at her peril.



Enjoy.

You could use a pedicure

Fuck the pedicure, for I want them, as theymos would say, au naturel. But before I work my way south to them scrumptioustoes... (I hope Maria doesn't see this post)

[rebroad]

Given that shit already hit the fan you guys might as well know that Donald will be enjoying the Portuguese sun for a month.

Given this whole mess he really should be needing some vacations

Do you know this to be the case or just joking? Inference that he is jetting off on Bitcoinica customer's money?


BB.

I'm serious.
He contacted me to hook him up with the Lisbon bitcoin scene.
No, I don't live in Lisbon.
Some interested parties were made aware of this fact, I just didn't relay it in the forums.
Given this statement by Tihan I don't see the point on keeping it a secret anymore.

BTW, I'm not infering that he's spending Bitcoinica's customers money. Just that he decided to take some time off when he should be working his ass off to make all of you whole after this mess.

Is it possible that intersango bought only Bitcoinica's assets and none of their debts?

[phantomcircuit]

Given that shit already hit the fan you guys might as well know that Donald will be enjoying the Portuguese sun for a month.

Given this whole mess he really should be needing some vacations

Do you know this to be the case or just joking? Inference that he is jetting off on Bitcoinica customer's money?


BB.

I'm serious.
He contacted me to hook him up with the Lisbon bitcoin scene.
No, I don't live in Lisbon.
Some interested parties were made aware of this fact, I just didn't relay it in the forums.
Given this statement by Tihan I don't see the point on keeping it a secret anymore.

BTW, I'm not infering that he's spending Bitcoinica's customers money. Just that he decided to take some time off when he should be working his ass off to make all of you whole after this mess.

Is it possible that intersango bought only Bitcoinica's assets and none of their debts?

Intersango did not purchase any part of Bitcoinica.

Bitcoinica did not purchase any part of Intersango.

This is a lie that has been pushed by Roger Ver who is an owner in businesses who are direct competitors with Intersango.

Let me repeat.  It's a lie.

[Rick James]

Intersango did not purchase any part of Bitcoinica.

Bitcoinica did not purchase any part of Intersango.

This is a lie that has been pushed by Roger Ver who is an owner in businesses who are direct competitors with Intersango.

Let me repeat.  It's a lie.

This BITCH talking about lies.

FUCK YOU PATRICK.

WHERE'S THE BITCOINICA MONEY, BITCH?

[disclaimer201]

Undecided whether Patrick is a pathological liar or a sociopathic liar. I tend towards the latter though.

[MemoryDealers]

Intersango did not purchase any part of Bitcoinica.

Bitcoinica did not purchase any part of Intersango.

This is a lie that has been pushed by Roger Ver who is an owner in businesses who are direct competitors with Intersango.

Let me repeat.  It's a lie.

I don't think I ever said either of those things,  and I'm not a part owner of any active bitcoin exchange that would be considered a direct competitor to you.

You do however owe me around 24,000 BTC and have been rather rude about it.

[MelMan2002]

...and have been rather rude about it.

Understatement of the year..

[John (John K.)]

..You do however owe me around 24,000 BTC and have been rather rude about it....

Owned.

[disclaimer201]

Turns out today that Bitmarket.eu was heavily invested in Bitcoinica and got owned as well. Along with most of its customers. Admin held it a secret for half a year until he ran out of funds very recently. A perfect date for the end of yet another exchange.

Just when you thought Team Zhou/Intersango couldn't fuck the Bitcoin project up any more, months later you find out the clusterfuck is even larger than life. That's what they call a domino effect.

Good thing I switched my passion to litecoins a long time ago. No disasters as of yet.

[MPOE-PR]

Turns out today that Bitmarket.eu was heavily invested in Bitcoinica and got owned as well. Along with most of its customers. Admin held it a secret for half a year until he ran out of funds very recently. A perfect date for the end of yet another exchange.

Just when you thought Team Zhou/Intersango couldn't fuck the Bitcoin project up any more, months later you find out the clusterfuck is even larger than life. That's what they call a domino effect.

Good thing I switched my passion to litecoins a long time ago. No disasters as of yet.

I really doubt some random idiot going 1000:1 on customer funds can be pinned in any way on Bitcoinica. His "strategy" would have failed regardless.

[repentance]

Turns out today that Bitmarket.eu was heavily invested in Bitcoinica and got owned as well. Along with most of its customers. Admin held it a secret for half a year until he ran out of funds very recently. A perfect date for the end of yet another exchange.

Just when you thought Team Zhou/Intersango couldn't fuck the Bitcoin project up any more, months later you find out the clusterfuck is even larger than life. That's what they call a domino effect.

Good thing I switched my passion to litecoins a long time ago. No disasters as of yet.

He was using customer funds to short Bitcoin.  You can't blame Bitcoinica for that.  Chances are that he would have kept chasing his losses had Bitcoinica not folded.  At least Bitcoinica's liquidation means there's some possibility of a portion of customer funds being recovered, although that's not much compensation for the fact that someone essentially used their funds to play at the casino without their permission.

Also, businesses making claims in the liquidation should be doing so as businesses and not as individuals.  So at least claim as "Joe Smith trading as Bitcoin Scam 5" instead of just "Joe Smith" - otherwise there are going to be even more legal shit-fights.

[disclaimer201]

You are right. I just hate anything bitcoinica muchly. There is no excuse. I sent quite a few bitcoins to bitcoinica myself not speculating at all, but just receiving the daily interest in USD and BTC. Nowhere would you get interest just for owning bitcoins instead. I didn't expect it would go tits up as fast as it did. Damn.

[HorseRider]

Turns out today that Bitmarket.eu was heavily invested in Bitcoinica and got owned as well. Along with most of its customers. Admin held it a secret for half a year until he ran out of funds very recently. A perfect date for the end of yet another exchange.

Just when you thought Team Zhou/Intersango couldn't fuck the Bitcoin project up any more, months later you find out the clusterfuck is even larger than life. That's what they call a domino effect.

Good thing I switched my passion to litecoins a long time ago. No disasters as of yet.

Oh, shit.

I'm not familiar with bitmarket.eu. If I were the victim, I would build a profile of them on internet. This should be put into the personal credit reports of them. At least, we community should build the credit records for the scammers. The scammer tag is a very simple start.

[Herodes]

Being a problem gambler is one thing. Gambling with other people's money without them knowing about it, is the lowest of the low, jailtime is a good idea.

[MPOE-PR]

Also, businesses making claims in the liquidation should be doing so as businesses and not as individuals.  So at least claim as "Joe Smith trading as Bitcoin Scam 5" instead of just "Joe Smith" - otherwise there are going to be even more legal shit-fights.

What you say is correct but it has significant practical implications, in the sense that if he does claim as a company the fiscal authorities in his country will probably regard the entire thing in such a light as to give him decent odds of an unsuspended jail sentence. So he won't be doing that.

Nowhere would you get interest just for owning bitcoins instead.

You're wrong. And iirc this was available since before Bitcoinica.

[btcx]

Intersango did not purchase any part of Bitcoinica.

Bitcoinica did not purchase any part of Intersango.

This is a lie that has been pushed by Roger Ver who is an owner in businesses who are direct competitors with Intersango.

Let me repeat.  It's a lie.

Care to explain this then?  https://docs.google.com/file/d/0B_ECG6JRZs-7VVFGdUVZd3UycGc/edit

Oh right, it was Wendon Group that traded you personally some shares of Bitcoinica for shares of Intersango.

The bitcoinica plan is that patrick rewrite this site and i help you with
the logic for the hedging bot. That's waiting on you looking at the code.
The speed of this is crucial because not only does it help both Intersango
and bitcoinica but at the same time it takes volume from mtgox. Tripple
whammy

How far the commingling of assets and resources goes is yet to be seen.

P.S. lol @ Intersango being competition for anything.  Roger has more credibility in his pinky than you have in your whole body.  I can't believe you still slink around here but what's more shocking is that anybody still trusts you with their money.

[phantomcircuit]

Intersango did not purchase any part of Bitcoinica.

Bitcoinica did not purchase any part of Intersango.

This is a lie that has been pushed by Roger Ver who is an owner in businesses who are direct competitors with Intersango.

Let me repeat.  It's a lie.

Care to explain this then?  https://docs.google.com/file/d/0B_ECG6JRZs-7VVFGdUVZd3UycGc/edit

Oh right, it was Wendon Group that traded you personally some shares of Bitcoinica for shares of Intersango.

The actual contract clearly shows Intersango was not owned by or responsible for the operation of bitcoinica.

Something you have now confirmed you had knowledge of prior to filling suit alleging as much.

I'll see you in court.

[BCB]

Turns out today that Bitmarket.eu was heavily invested in Bitcoinica and got owned as well. Along with most of its customers. Admin held it a secret for half a year until he ran out of funds very recently. A perfect date for the end of yet another exchange.

Just when you thought Team Zhou/Intersango couldn't fuck the Bitcoin project up any more, months later you find out the clusterfuck is even larger than life. That's what they call a domino effect.

Good thing I switched my passion to litecoins a long time ago. No disasters as of yet.

disclaimer201.  Where is this info?

Thx.

[danieldaniel]

Intersango did not purchase any part of Bitcoinica.

Bitcoinica did not purchase any part of Intersango.

This is a lie that has been pushed by Roger Ver who is an owner in businesses who are direct competitors with Intersango.

Let me repeat.  It's a lie.

Care to explain this then?  https://docs.google.com/file/d/0B_ECG6JRZs-7VVFGdUVZd3UycGc/edit

Oh right, it was Wendon Group that traded you personally some shares of Bitcoinica for shares of Intersango.

The actual contract clearly shows Intersango was not owned by or responsible for the operation of bitcoinica.

Something you have now confirmed you had knowledge of prior to filling suit alleging as much.

I'll see you in court.

He just got owned.

[disclaimer201]

Turns out today that Bitmarket.eu was heavily invested in Bitcoinica and got owned as well. Along with most of its customers. Admin held it a secret for half a year until he ran out of funds very recently. A perfect date for the end of yet another exchange.

Just when you thought Team Zhou/Intersango couldn't fuck the Bitcoin project up any more, months later you find out the clusterfuck is even larger than life. That's what they call a domino effect.

Good thing I switched my passion to litecoins a long time ago. No disasters as of yet.

disclaimer201.  Where is this info?

Thx.

https://bitcointalk.org/index.php?topic=5441.msg1413156#msg1413156

https://bitcointalk.org/index.php?topic=129803.msg1417085;topicseen#msg1417085

[Rick James]

You do however owe me around 24,000 BTC and have been rather rude about it.

By this post, you speak about thousands, you have done nothing to gain those back, but for 4.5 you gave my full info online.
That said, i now feel a little satisfied that i saw this, and it makes me feel like i should ask for some btc for what you have done to me, and you now dont even reply in the threads after the last pm you sent.

Keep your derailing bullshit out of here. Whine about that shit somewhere else. Noob.

The actual contract clearly shows Intersango was not owned by or responsible for the operation of bitcoinica.

Something you have now confirmed you had knowledge of prior to filling suit alleging as much.

I'll see you in court.

FUCK YOU PATRICK. WHERE'S THE BITCOINICA MONEY BITCH?

I'LL SEE YOU IN HELL BITCH.

[Third Way]

What's happening in this thread?

[Hexadecibel]

Oh, this is the fallout of the last major scam (debacle?) before the pirate scam. These kind of disasters serve as a lesson for the rest of us, and in the end make the bitcoin user base more aware...

[MPOE-PR]

Intersango did not purchase any part of Bitcoinica.

Bitcoinica did not purchase any part of Intersango.

This is a lie that has been pushed by Roger Ver who is an owner in businesses who are direct competitors with Intersango.

Let me repeat.  It's a lie.

Care to explain this then?  https://docs.google.com/file/d/0B_ECG6JRZs-7VVFGdUVZd3UycGc/edit

Oh right, it was Wendon Group that traded you personally some shares of Bitcoinica for shares of Intersango.

The bitcoinica plan is that patrick rewrite this site and i help you with
the logic for the hedging bot. That's waiting on you looking at the code.
The speed of this is crucial because not only does it help both Intersango
and bitcoinica but at the same time it takes volume from mtgox. Tripple
whammy

How far the commingling of assets and resources goes is yet to be seen.

P.S. lol @ Intersango being competition for anything.  Roger has more credibility in his pinky than you have in your whole body.  I can't believe you still slink around here but what's more shocking is that anybody still trusts you with their money.

Quoted for exactitude.

Except the last part, I very much doubt anyone trusts the scamgroup with anything. Point in case the intersango transaction volume, and other things.

Turns out today that Bitmarket.eu was heavily invested in Bitcoinica and got owned as well. Along with most of its customers. Admin held it a secret for half a year until he ran out of funds very recently. A perfect date for the end of yet another exchange.

Just when you thought Team Zhou/Intersango couldn't fuck the Bitcoin project up any more, months later you find out the clusterfuck is even larger than life. That's what they call a domino effect.

Good thing I switched my passion to litecoins a long time ago. No disasters as of yet.

There's two reasons there's been no disasters as of yet in litecoin: a) nobody cares about it, and as a result nobody bothers stealing it and b) nobody cares about it, and as a result nobody bothers doing anything in it. People try occasionally to graduate from LTC to BTC (such as that Burnside fellow), but other than that moving to LTC because BTC is tough is not much unlike moving back to high school because real life sucks and back there you can still date cheerleaders on the strength of being the only guy on the team that washes.

[zero3112]

Are there even any bitcoins left after all those hacks?

[Monster Tent]

Are there even any bitcoins left after all those hacks?

Something like 20% of ll the bitcoins ever existing have been claimed by scammers.

[disclaimer201]

You are wrong. I do care for litecoins. Last time I checked I wasn't nobody. More scams and hacks happen in Bitcoin world as we speak: bAsic, Bitmarket.eu, Vircurex and many more, and the year is only 15 days old!

Also, what are you romaing the altcoin exchanges threads for, if you are not fond of them? lol

[dancingnancy]

The liquidators are supposedly back in the office this week.  Did anyone hear anything from them at all so far?

thx

[Herodes]

The liquidators are supposedly back in the office this week.  Did anyone hear anything from them at all so far?

thx

They've been on vacation. Haha, have we ever heard that excuse before ? The saga continues..

[smoothie]

Turns out today that Bitmarket.eu was heavily invested in Bitcoinica and got owned as well. Along with most of its customers. Admin held it a secret for half a year until he ran out of funds very recently. A perfect date for the end of yet another exchange.

Just when you thought Team Zhou/Intersango couldn't fuck the Bitcoin project up any more, months later you find out the clusterfuck is even larger than life. That's what they call a domino effect.

Good thing I switched my passion to litecoins a long time ago. No disasters as of yet.

+1 Learning from others' mistakes is wise.

[disclaimer201]

The liquidators are supposedly back in the office this week.  Did anyone hear anything from them at all so far?

thx

They've been on vacation. Haha, have we ever heard that excuse before ? The saga continues..

Uhm, outside of cryptocurrency there are still places with paid sickdays and a fixed amount of holidays per year. The liquidators have set a deadline for the 20th. So, pls.

[MPOE-PR]

The liquidators are supposedly back in the office this week.  Did anyone hear anything from them at all so far?

thx

They've been on vacation. Haha, have we ever heard that excuse before ? The saga continues..

Uhm, outside of cryptocurrency there are still places with paid sickdays and a fixed amount of holidays per year. The liquidators have set a deadline for the 20th. So, pls.

No, liquidation is a scam!!1

[disclaimer201]

[BitBuster]

Did anyone actually get their money back?


BB.

[Phinnaeus Gage]

Did anyone actually get their money back?


BB.

Not yet! Luckily, it's sitting in Mt. Gox safe and sound till the liquidators get it back so that they ... or something like that.

[defxor]

Not yet! Luckily, it's sitting in Mt. Gox safe and sound till the liquidators get it back so that they ... or something like that.

Interesting post on Reddit just now by MtGox on that topic:

WeAreMtGox:
"The communications from the liquidator wrongly creates an impression that we are withholding information and account access without any proper lawful basis and otherwise failing to co-operate with the liquidator. To the contrary, we have communicated our willingness to co-operate with the liquidators of Bitcoinica LP (In Liquidation) as far as we can lawfully do so.
Before we can release the confidential and highly sensitive information sought by the liquidators, they must first provide certain basic verificatory evidence to establish that they are entitled to the information. So far, they have not."


http://www.reddit.com/r/Bitcoin/comments/1c7ahh/we_are_mt_gox_ama/c9dr5w7

[dancingnancy]

jesus, all you can do is try to laugh it off anymore.  just give us our coins back, that simple. 

[mjosephs]

So... any news on this guys?

I still have hope.

[MemoryDealers]

I believe the Bitcoinica liquidators said that the MTGOX liquidators approved their claim.