Topic: bitfloor needs your help! - page 34. (Read 177459 times)

Not sure where people get the idea that bitfloor "can't" repay USD account holders.

Not sure where people get the idea that bitfloor "can't" repay USD account holders.

http://en.wikipedia.org/wiki/Fraudulent_conveyance


Given that both Bitcoin and USD creditors "could" sue bitfloor and considering the relatively likelihood of each lawsuit and the relative likelihood of being successful the prudent thing for bitfloor to do would be to repay those creditors who essentially have an open and shut case when it comes to a lawsuit. 

Au contraire, US law is perfectly clear on the matter:

Roman has already said he's going to talk to a real lawyer. So nothing that any of you Internet lawyers say will have any impact on his actions. The only thing to do now is sit back and wait for an update once Roman's lawyer advises him on what course of action he should take.

These are all things for the legal council (and if it goes to U.S. court, the judge) to decide in order to figure out what actions are appropriate. That's where the "due process of law" comes in. You're entitled to your process, BitFloor is entitled to theirs. BitFloor seeking legal council is where he ensures that he is acting in a way most within the law. Your process would be serving BitFloor and/or suing them.

Things are not that simple that withdrawals can happen just for the solvent parts of the business held; welcome to the world of BitCoin, where everything is without absolute legal precedent (yet). If a legal precedent can be set that the BTC has value, it would be illegal for them to use any portion of the assets (including remaining balances held for what wasn't hacked) to pay out to anybody until the appropriate process on reimbursing has been determined in court.

This WILL not be a quick process. The only quick process would be if the coins were returned by the hacker, or if someone invested BTC in BitFloor in exchange for ownership (or a portion of). I'd imagine this case (albeit not a likely one) is the one that BitFloor is hoping for the most.

Best case for USD holders (and worst case for BTC holders) is that his legal council (or the court system) determines that BTC will be considered "worthless" and that USD should be distributed to account holders as it's the only part of BitFloor that needs to be legally held solvent. However, I can just about guarantee that if this happens, anyone holding a large amount of BTC will file an injunction and appeal, which will almost certainly prevent payout of USD funds from happening quickly.

Hang on folks, this is likely to be an interesting one, especially since it's occurring in the oh-so-litigious US.

A transfer will be fraudulent if made with actual intent to hinder, delay or defraud any creditor. Thus, if a transfer is made with the specific intent to avoid satisfying a specific liability, then actual intent is present. However, when a debtor prefers to pay one creditor instead of another that is not a fraudulent transfer.[1]

Au contraire, US law is perfectly clear on the matter:

Didn't you know that your $1000 instantly became part of the BitFloor collective the moment you deposited it?

Oh wait, that's not a reasonable interpretation of US law at all. . .

Please show me where BitFloor has filed for bankruptcy, and then you might have a point.  Otherwise your post is non sequitur.

. . .Please show me where BitFloor has filed for bankruptcy, and then you might have a point.  Otherwise your post is non sequitur.

US insolvency requirements are "due process of law".  It's up to those who don't believe that US insolvency law should be applied in this case to petition the court with on point arguments and case law supporting that assertion - the cost of defending against any such actions will come out of the bankrupt estate.  Unless USD holders can establish that they're secured or preferential creditors as defined by US insolvency law, there are no legal grounds on which they can be paid in full in preference to other unsecured creditors without the agreement of those other creditors.

So last week I deposited about $1000 in bitfloor and hadn't even yet made a single trade with it. While it was extra savings money and I can survive without it, I am quite upset about not being able to pull my money out....

Accusing me of "anger" is not the best way to rebut anything I've claimed.  The ALLCAPS are for emphasis, not rageposting.

Note that not a single exclamation point was used in my post.  I'll use bold next time, so as not to further confuse you.   

This was almost all of the BTC.


No. All USD bank accounts are secure. And all records for the current status of the exchange (accounts, trades, etc) are all also secure.