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

[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.

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[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