Topic: [ANN] Bitcoinica Consultancy abandons customers. Bitcoinica to enter Liquidation - page 17. (Read 54938 times)

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.


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.

The bitcoinica domain name auction should be interesting.

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?

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.

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.

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!!!

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.

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.

Chaos， when will it end?

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. 

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.

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.

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.

+1


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.

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

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

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...

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.

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.

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


BB.