Topic: {ANNOUNCEMENT} WBX Exchange Frozen - page 12. (Read 45347 times)

I'm OK to keep holding the coins for now.  I've published the address they're at, a couple of times now, so you can see they're still there.  I can provide a signature proving that I have control of the private key if anyone would find that useful.

The exchange never asked for contact details other than an OpenID string and scans of ID documents, and so I have no way of contacting all the exchange users.  Andre probably has emails from lots of users, but I was only forwarded the ones that he needed my technical assistance with.  A few users have contacted me privately after seeing my email address in the 'news' section of the site, but there are many users I have no contact details for at all.

Thank you payb.tc, that is a very sensible comment.

In other liquidations, there can be a liquidator appointed, and that can be from the business or from the creditors.  A file of creditor claims would be made, and paid on.
For now, I'm comfortable with Chris just holding onto things.  If he is agreeable, we could provide evidence of claims over the next three months (say to 1 August) and if nothing else happens before then, he would distribute on that basis. 

I would even be comfortable contributing some coins to him for his efforts/troubles.
(does the database scrape you have include client contact details?)

i wouldn't rush it. you don't want to be in a situation where you've distributed funds and then find out 3 months later that it was done incorrectly.

That leaves me in an awkward position.

I have the remaining Bitcoin assets of the exchange, but neither the authority nor the necessary information to distribute them to their rightful owners.

I suspect he has gone again.  I have not heard anything via my lawyers despite his asking for contact details (and my providing them), and I don't think he is interested in providing any answers to some quite reasonable questions, let alone meeting any of his obligations. 

I received a private message:


I don't know if that 1500 AUD is just the extra that's owed to one customer, or whether that's the total, but if true, then that will reduce the 25.5% even further.  Also, it may be that the 1500 AUD withdrawal was left in a 'pending' state, in which case it will have been included in the amount I wrote here earlier, since I cancelled all pending withdrawals in my backup copy of the database, causing the pending withdrawals to be added back to the account balances.

Andre: do you have a complete list of the exchange's liabilities?  I was assuming that the outstanding customer account balances was everything, but apparently that's not true.

And please address my other recent questions to you in this thread.

It probably needs to be someone who actually has funds tied up with WBX.

I would strongly suggest that people don't accept Andre's word for anything at this point.  He's been extremely reticent to disclose useful information and his reluctance to say who now controls the WBX website is very suspicious.  I certainly wouldn't take his word that it's not someone who was previously associated with WBX and/or High Net Worth Property Pty Ltd and I wouldn't take his word that he has no income or assets which could be used to repay WBX customers.  I wouldn't trust any such claims unless they are verified by either a court or an insolvency trustee.

It may well be worth someone who is owed a significant amount paying for a skip trace given Andre's refusal to provide an address for the service of legal claims.  Some local companies provide this service on a "no locate, no fee" basis.

Someone in Australia must follow up on this, if it didnt happen then I can assure you that everything Andre said was all simply to stall users from making more noise early on and no one should trust even one word coming out of Andre's mouth.

I'm not sure whether they were separate incidents relating to different banks, but Andre stated in this thread that he was unable to give details while the investigation was in progress due to legal reasons.  It sounds like the investigation is now complete.  While the banks may still refuse to divulge any details to WBX customers, if the Financial Ombudsman truly did review the case then their office should be able to confirm the basic details and it would certainly be in Andre's interests to facilitate communication between his customers and the Ombudsman.  Andre could also provide the contact details of any law enforcement officers who worked on the investigation.

The whole post is probably worth quoting:


Were details of the investigation ever made public?

I'm pretty sure that all of the major exchanges have admitted to being hit by similar frauds at some point (MtGox, TradeHill and CryptoXchange have all admitted being hit by similar frauds) - some of them have been able to cover the losses and some haven't.  But yes, it's a known risk and it's one which should absolutely be taken into account when deciding how soon after depositing you will allow your users to trade.  You also need a process for flagging high risk transactions and not letting high risk account trade until those transactions have been investigated and it's possible that WBX didn't really have that in any meaningful sense.

Given the relatively small amount of money owed to WBX customers, it's disappointing that Andre is not making an offer to repay the shortfall over time.  Of course it's possible that he owes money elsewhere as well and that paying back WBX customers wouldn't make a substantial dent in what he owes (he could also be avoiding making such an offer because he's expecting legal action in respect of other matters which would make giving WBX customers priority for payment inadvisable).

It's probably worth reminding people what Andre posted only a couple of weeks before WBX announced freezing the exchange.


https://bitcointalksearch.org/topic/m.713074

Unlikely - I was having enormous trouble getting money out and if it had been $500/day like it should have been, I might now simply be an interested bystander.  From discussion in this thread, it only takes three or four people to get to half of that total.

Andre still has the option of making a payment arrangement to cover his debts, and I still have debt collection services at my disposal.  One way keeps people happy, the other will screw up his life more than mine.

It's interesting that Andre hasn't chosen the route of bankruptcy or a personal insolvency agreement, both of which would limit his liability to pay back creditors.  I suspect it's less an "honour" thing (after all, he's not making any promises that he'll attempt to pay back the remaining balances in the future but pretty much saying "26% is all you're going to get) and more to do with having his financial affairs subjected to scrutiny and the restrictions which would be placed on his ability to operate another business and to travel overseas in the short-term future.  

The current insolvency income thresholds are quite generous - a person with no dependants can have after tax income of ~$917 per week before they are required to make payments to their creditors.  The thresholds are higher for those with dependants and non-taxable income is excluded from the calculations.  There are also thresholds for assets and some types of assets are protected.


I'm aware of at least one way that the bank account could be emptied of legitimate user funds due to fraudulent deposits (there are others, and many involve multiple deposits and transfers using different identities but the basic strategy is the same).  Let's say there's $10,000 in legitimate user funds sitting in the account.  Fraudster deposits $5,000 and WBX allows him to trade to the value of $5,000 before those funds are properly cleared (so it's the legitimate money in the account which is used for his trades).  Bank then detects the deposits as fraudulent and reverses them - which leaves no legitimate funds remaining in the account.  By the time the fraud is detected, the legitimate funds have already been laundered in a series of irreversible transactions.  The bank isn't "holding onto legitimate funds" because there are no longer any legitimate funds in the account.  Many Bitcoin businesses do allow their customers to trade using deposits which haven't been fully cleared - it's an inherently risky thing to do so if you're going to allow it you need sophisticated risk management processes.

Andre claims that this incident has been investigated by the Financial Ombudsman Service.  There should be no problem with him giving people the reference numbers which allow them to contact the FOS office and find out whether the bank transferred any legitimate funds in the account to one of the unclaimed monies funds (this is exactly what services like PayPal and Technocash do when an account is closed due to fraudulent activity).  Of course it's not unreasonable to assume that funds were being co-mingled and that user deposits were not being quarantined from the operational funds of the business or Andre's personal funds.  A fee-free model was clearly never going to be sustainable and it's likely that the business was operating at a loss prior to the claimed fraud.

Please note that the numbers I posted are based on my most recent backup, and the statement entries that Andre pasted in this thread.  It may be that he honoured AUD withdrawals which I don't know about, in which case the outstanding dollar balance will be less than I posted.

I have requested the information I need several times now, but so far it hasn't been forthcoming.

What I find amusing is how he managed to lose the money of the non-scamming legit users. Andre, please enlighten us how a bank can hold onto legit deposits ? Be honest, you started to live of the money and when people started to scam you there wasnt enough money left for the legit deposits? Correct?

Thats assuming you didnt just use the scamming argument to try and wriggle your way out of this.

Provide your clients with police reports of theft/scam/stolen money reported by the bank.(yes if the bank seized the money they have to file it with the police unless you live in some backwash lawless country)

Just coming back to this, managing to lose $25,779?! That must have been pretty damn obvious well before you pulled the plug of people's accounts.

(observation - my account now tells me I have a zero balance)

Andre, if you still have a house,car and some financial aid then you are still in a position to pay back every single cent/bitcent that you had in your posession for legit clients.

Simply stating you cant pay since you were scammed is bullshit, then sell your car or morgage your house or whatever as long as you pay back what you owe(currently stole) from the legit users.

Its as simple as that, you lose their money then you lose your property.

I thought not.  My question was kind of rhetorical.


Nope.  But the account name is "WBX".  Looks like a work in progress:




That makes sense.  I was certainly going to wait for his agreement to my proposed terms here.  I don't know what effective difference it would make to have it on a piece of paper with a signature on it, when I've no idea what Andre's signature looks like.  I don't even know if the person running WBX was really called Andre, or whether that's just the name of the director of a company he decided to use the name of.  This forum is probably the most secure way I have of communicating with him, since at least here he has to log in to post.  Perhaps having it on paper makes a legal difference.

Andre, please can you read my proposal re. returning the exchange assets and either agree or propose changes?  I'd still like a copy of the 'Users' page from WBX, and for the WBX site to be taken down or cleared out to prevent further balance trading on it.

Nope, you can't get around Australia's KYC/AML/CTF laws by paying a fee.  While they could technically charge to expedite processing of ID documents, they're still required to ID their customers properly - a receipt number for a cash deposit alone puts them in very dangerous legal territory.  Of course there is no information about who is now operating WBX (why change the website if it isn't going to relaunch) or any guarantee it's being operated by someone in Australia.  There are also laws which make operating an insolvent business an offence.

Are the bank account details still the same as before Chris?

Chris, make sure you get written authority from Andre to distribute the Bitcoins you have in your possession and written instructions about how they're to be distributed.  The legal responsibility for any decision to use Peter's money to pay Paul should rest firmly on Andre's shoulders.

People should also be aware that in the absence of formal insolvency, they can't be forced to accept 26% of the amount they're owed and that accepting a partial payment at this time does not bar them from pursuing recovery of the remainder.