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

[dopamine]

So creditor means customer funds being returned?

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[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!!!