bitfloor needs your help! - page 32.

whitslack

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Quote from: ErebusBat on September 04, 2012, 07:26:36 PM

Yes, it looks like bit floor as we knew it is gone Sad

How sad it is that Bitfloor will be forced out of business and no one will be made whole, when Mr. Shtylman has already indicated that he would like to reopen trading and use the collected fees to repay everyone. It could take years to repay the losses, but eventual repayment of everything everyone is owed would be better than shutting it all down. This is an example of how our legal system is horribly broken. Roman wants to work to make it 100% right in the long-term, but the court wants the short-term compromise at the expense of making the long-term restitution impossible.

DannyHamilton

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Quote from: unclemantis on September 04, 2012, 07:26:51 PM

Quote from: shtylman on September 04, 2012, 02:42:21 PM

I have put the website back online for users who have USD to request a withdrawal via ACH. . .Once trading resumes, I hope to be able to start repaying BTC losses using the proceeds from fees. More information about this will be provided later.

Can you give us a scheduled date and time so that we can be ready out of the gates?

See here:

Quote from: shtylman on September 04, 2012, 03:52:02 PM

Please note that I have taken the website offline. I am consulting legal council about the current situation . . .

unclemantis

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(:firstbits => "1mantis")

Quote from: shtylman on September 04, 2012, 02:42:21 PM

I have put the website back online for users who have USD to request a withdrawal via ACH. If you choose to leave your USD funds in the account they will be available for trading once it resumes. I hope to resume trading later in the week.

If you had outstanding orders they have all been cancelled.

Once trading resumes, I hope to be able to start repaying BTC losses using the proceeds from fees. More information about this will be provided later.

Can you give us a scheduled date and time so that we can be ready out of the gates?

ErebusBat

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I am the one who knocks

Quote from: unclemantis on September 04, 2012, 07:23:25 PM

Quote from: greyhawk on September 04, 2012, 05:33:50 PM

@unclemantis... You should probably read the rest of the thread

Why? Should there be reason to panic?

Yes, it looks like bit floor as we knew it is gone Sad

blakdawg

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Quote from: whitslack on September 04, 2012, 07:09:27 PM

If the court decides I should be paid out in USD more than my USD balance at Bitfloor, I might try to refuse or return the part of the settlement that is above and beyond my USD balance, on the basis that I will not knowingly accept stolen property (and any USD settlement beyond my USD balance would necessarily have been stolen from other users who had predominantly USD balances at Bitfloor).

My bet is that everyone with funds at Bitfloor will end up with a pro rata share of the total "deposits", with BTC valued at today or yesterday's average USD exchange rate. And court fees, attorney fees, accountant fees, trustee's fees, and all of the rest come out first.

So a pretty good outcome would probably look like 25% of your total deposits (assuming, overall, that half of the value deposited was BTC (which is now gone) and half was USD, and half of what's left gets spent on the friction of litigation), and you'll probably get it in 12-18 months.

This is why we can't have nice things.

unclemantis

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(:firstbits => "1mantis")

Quote from: greyhawk on September 04, 2012, 05:33:50 PM

@unclemantis... You should probably read the rest of the thread

Why? Should there be reason to panic?

whitslack

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Quote from: blakdawg on September 04, 2012, 07:01:16 PM

Quote from: whitslack on September 04, 2012, 06:46:35 PM

I will attempt to recover my USD balance, and if the judge wants to pay me a fraction of my USD balance but also compensate me a fraction of my BTC balance, I suppose I would take that deal.

Well, that's the thing about court, it's not really a "deal" that you take or don't take - the judge does what s/he does, and if you can explain why it was legally incorrect you can ask an appellate court to change the ruling. If your exposure is a few thousand USD or less, there's really no economic sense in fighting, it will cost more to fight than it would to just take your losses and move on.

By "take that deal," I meant I would accept that payment and not reject it on moral grounds. My only choices would be to accept whatever the judge wants to pay out to me or to reject it. I can always refuse to take money. If the court decides I should be paid out in USD more than my USD balance at Bitfloor, I might try to refuse or return the part of the settlement that is above and beyond my USD balance, on the basis that I will not knowingly accept stolen property (and any USD settlement beyond my USD balance would necessarily have been stolen from other users who had predominantly USD balances at Bitfloor).

repentance

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Quote from: blakdawg on September 04, 2012, 06:45:31 PM

Agreed - I'm not saying it's a good idea (frankly I don't have enough facts to have an opinion about that) but mentioning it as a possibility. To me, this seems like it's headed for bankruptcy, unless all of the creditors are so small that individually it's just not worth filing suit. My hunch is that there are going to be a couple of people with balances in the tens of thousands of dollars (or equivalent in BTC) who will go ahead and file (similar to Cartmell v. Bitcoinica) because they'd rather spend a few thousand more getting something filed and use that as leverage to settle and/or to use the civil discovery process to figure out what's going on . . . and from the company's point of view, it probably makes more sense to spend their cash on bankruptcy attorneys rather than fight lawsuits, only to end up in bankruptcy after losing the lawsuits. The bankruptcy action will create an automatic stay on other matters, so regular civil suits will be frozen while the bankruptcy is resolved.

Historically what has happened is that the larger creditors and/or other service operators have sought to buy out the venture in trouble - Cartmell et all offered to do this with Bitcoinica. World Bitcoin Exchange and Bitcoinica did not accept the offers which would have paid out all customers and left the operators with no remaining liability but it doesn't mean that Roman won't consider and accept any such offers.

blakdawg

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Quote from: whitslack on September 04, 2012, 06:46:35 PM

I will attempt to recover my USD balance, and if the judge wants to pay me a fraction of my USD balance but also compensate me a fraction of my BTC balance, I suppose I would take that deal.

Well, that's the thing about court, it's not really a "deal" that you take or don't take - the judge does what s/he does, and if you can explain why it was legally incorrect you can ask an appellate court to change the ruling. If your exposure is a few thousand USD or less, there's really no economic sense in fighting, it will cost more to fight than it would to just take your losses and move on.

DannyHamilton

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Quote from: jojo69 on September 04, 2012, 06:48:00 PM

Quote from: iCEBREAKER on September 04, 2012, 05:29:59 PM

I'll use bold next time, so as not to further confuse you. Cool

use bold with caution, or have you not read the entire thread?

I suspect that the issue people had with 1nject0r had more to do with what he was saying and how he was saying it than the fact that he was using bold on every single word (though he may still have been asked to limit the bold to things that needed emphasis if people didn't mind the rest of it).

whitslack

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Quote from: barbarousrelic on September 04, 2012, 06:40:23 PM

Quote from: fcmatt on September 04, 2012, 06:36:36 PM

No clear answer on how the hacker got in.... Without that one might as well assume owner took it. Bitcoins missing.... Oh well.
Show the logs and analysis!!!

I agree, the site owner should be considered the number one suspect in all of these Bitcoin website hacks that result in stolen Bitcoin. They have the means, the motive, and the convenient excuse (those damn hackers!)

I am not sure there is a motive. Of course Roman would like to get away with 24k BTC, but why not 50k BTC? Why not 100k BTC? He had the means to steal the bitcoins whenever he wanted. Bitfloor was gaining popularity. He had every reason to believe that the BTC balance would only increase. Unless he had some urgent need for BTC, it would have been better for him to wait for a larger balance to cash out. In other words, unless it can be shown that Roman was personally suffering a cash crunch, it would have been illogical for him to steal 24k BTC when he could have waited and stolen much more.

Tuxavant

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Bitcoin Mayor of Las Vegas

I'm in for $2k now. Just remembered I had moved $1k from my ING account into BF getting ready for a purchase. Whitslack, Icebreaker, consider me in if it happens.

jojo69

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diamond-handed zealot

Quote from: iCEBREAKER on September 04, 2012, 05:29:59 PM

I'll use bold next time, so as not to further confuse you. Cool

use bold with caution, or have you not read the entire thread?

whitslack

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Quote from: DannyHamilton on September 04, 2012, 06:22:56 PM

Quote from: whitslack on September 04, 2012, 06:12:46 PM

So is it now on me to remember to check Bitfloor.com or this thread a month, two months, three months from now to see if there's been unveiled a way for me to reclaim the part of my property that wasn't stolen?

Good question. Here's two for you. If it turns out that the only way for anyone to regain any of their property, Bitcoin or USD, is to file a petition with the court, will you bother to do so? How many will?

I already assume my BTC is irrecoverable, and I won't seek to take the property of others to make up for my loss. However, I did have a few hundred USD at Bitfloor, and I would consider that my property, and I would like it returned. Now, legally, I am aware that pooled accounts have some disadvantages in bankruptcy situations. Although I personally believe my entire USD balance should be returned to me, I recognize that a court may decide to lump all customer deposits, both USD and BTC, in one large pot and then pay out the unstolen USD proportionally. Since I had more value in BTC at Bitfloor than I had in USD, that latter scenario ~~would~~ could actually be better for me financially, but I still think it's less morally sound than the strict, allocated treatment. But my views on morality have no bearing on what a judge will say. I will attempt to recover my USD balance, and if the judge wants to pay me a fraction of my USD balance but also compensate me a fraction of my BTC balance, I suppose I would take that deal.

fcmatt

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Quote from: barbarousrelic on September 04, 2012, 06:40:23 PM

Quote from: fcmatt on September 04, 2012, 06:36:36 PM

No clear answer on how the hacker got in.... Without that one might as well assume owner took it. Bitcoins missing.... Oh well.
Show the logs and analysis!!!

I agree, the site owner should be considered the number one suspect in all of these Bitcoin website hacks that result in stolen Bitcoin. They have the means, the motive, and the convenient excuse (those damn hackers!)

reopening the website/ports without audit is madness too unless you know exactly what happened and how to close hole.
plus possible backdoor left if attacker had permits to do so.

blakdawg

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Quote from: repentance on September 04, 2012, 06:30:13 PM

Quote

It's also possible for a creditor to file a petition in bankruptcy court to force an uncooperative/insolvent debtor into bankruptcy.

While this is true, there is usually a requirement that you make a demand for payment of the debt and that it go unpaid for a period of time following that demand. While a debtor is actively seeking solutions such as borrowing, selling personal assets, or selling equity in the enterprise, it's not necessarily smart to immediately petition for involuntary bankruptcy.

Agreed - I'm not saying it's a good idea (frankly I don't have enough facts to have an opinion about that) but mentioning it as a possibility. To me, this seems like it's headed for bankruptcy, unless all of the creditors are so small that individually it's just not worth filing suit. My hunch is that there are going to be a couple of people with balances in the tens of thousands of dollars (or equivalent in BTC) who will go ahead and file (similar to Cartmell v. Bitcoinica) because they'd rather spend a few thousand more getting something filed and use that as leverage to settle and/or to use the civil discovery process to figure out what's going on . . . and from the company's point of view, it probably makes more sense to spend their cash on bankruptcy attorneys rather than fight lawsuits, only to end up in bankruptcy after losing the lawsuits. The bankruptcy action will create an automatic stay on other matters, so regular civil suits will be frozen while the bankruptcy is resolved.

repentance

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I'd just like to point out the importance of Bitfloor consulting an insolvency specialist and not a general lawyer. You need someone who'll advise you on all of the legal options available and their pros and cons.

barbarousrelic

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Quote from: fcmatt on September 04, 2012, 06:36:36 PM

No clear answer on how the hacker got in.... Without that one might as well assume owner took it. Bitcoins missing.... Oh well.
Show the logs and analysis!!!

I agree, the site owner should be considered the number one suspect in all of these Bitcoin website hacks that result in stolen Bitcoin. They have the means, the motive, and the convenient excuse (those damn hackers!)

MPOE-PR

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Quote

Personally like it or not, I think on a long enough time line we will be in the "all" category.

Never.
And in no case shall that "all" be US law.

fcmatt

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No clear answer on how the hacker got in.... Without that one might as well assume owner took it. Bitcoins missing.... Oh well.
Show the logs and analysis!!!

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