Topic: Class action Litigation vs. Bitcoinica Consultancy LTD & Intersango LTD - page 7. (Read 27023 times)

The dollars and Bitcoins owed by Bitcoinica to their depositors were not destroyed nor squandered. They still exist, merely their possessors are illegitimate. This means that it is possible to repossess them. Until they are returned, the rights of the depositors are being violated, even though it is unclear who is to what extent responsible for it. Even if I personally did not care whether my money is returned, I still want to live in a world where property rights are respected. This requires enforcement.

There exists a perception of uncertainty about the ability of the legal system to enforce property rights with respect to Bitcoin, and this discourages people from using Bitcoin, thinking that fiat currencies like dollars or the euro are "safer". While I don't think that's true, based on my research it appears to be a very common perception. A legal precedent can be beneficial for the future of Bitcoin. If we don't do it now with Bitcoinica, eventually someone else will do it in some other case in the future, when someone else is a victim. But making a precedent now can make it easier for this future victim, or even prevent them from becoming victims in the first place.

I personally as an anarchocapitalist think that the prison system is retarded. The victims are required to pay, via taxes, for the food and lodgings of the people that harmed them, while the perpetrators cannot work to repay the debt. However, whether people go to prison or not is to a large extent determined by the state, not by the victims. The victims and witnesses are often required to participate in criminal proceedings whether they want or not.

However, putting people into prison is an entirely different issue than enforcement of property rights. I want the latter but not the former. Not only for me, not only for Bitcoin users, but for everyone.

Tihan said their fund will already be pursuing legal action against the consultancy. And the consultancy aren't the owners and don't have assets anyway.

Legal action is needed against Tihan and "wendon" (the mysterious owner, Tihan is supposedly a middle-man according to patrick). Both the venture capital fund and the bitcoinica legal entity in new zealand should be the focus, ultimately it was their responsibility which they psssed on to the consultancy. And, they actually have the assets to cover the losses (they also invested $500k in coinLabs).

They probably aren't gonna be using client funds for legal defense against said clients, that would land them in an even bigger pile of shit and open the door for a criminal investigation.
 

I lost nearly $150,000 one day. Pretty much everything. Nothing to do with Bitcoin. The guy went to jail but I was never completely sure if we had the whole truth. I took it on the chin.

Intersango has been a useful service and Amir has done a lot for me and us.

I do think action should go ahead as there is a case for it and it should change attitudes. But I also acknowledge it will be a shame to see the back of Intersango as they've:
- taken risks on my behalf by running the exchange in the grey area of is-it-forex (initially for no fee),
- developing the exchange software,
- working on the Bitcoin code and also
- campaigning in person at events like Occupy

I'm not defending them. I'm just saying it's a shame. These will be the next in a line of public figures with Bitcoin where the community has turned against. A sample size of 2 is a bit early for a worrying trend but divided we are and so easily.

It took a lot more work than this to turn me against the guy who was slated as spending my life savings. For a long time I felt there must have been mitigating circumstances because they were shutdown by an agency with active interests in doing so. I could see a conspiracy theory. To this day I'm not completely sure but I've decided not to break the guys legs even though he's been convicted and done his jail time. The hard thing is it's hard for me to know.  

What is suing going to achieve other than finally show people a precedent that this is a serious matter and things are real.

That was me saying it in a light fashion to save egos. Perhaps I should be blunt. I could say "Screw you. Get off these guys. Let me carry on using my favorite exchange. Let me continue to receive their contributions to the code base and exchange software. Let me enjoy their work at Occupy. Forgive them and shut the crap up just like I did with my life savings."

I feel very qualified to say so because I have gone through the experience and it has changed my entire life. If I hadn't lost that cash I wouldn't be in this damn job, I wouldn't be in the country and I'd be with my girlfriend! But I know burning down the guys house isn't going to change anything.

Now, if suing does change things and get people to take security more seriously then do it, you are doing it from a good place.
But if you look in your heart and you're doing it for vengeance then I suggest step back because that in my experience usually backfires. If necessarily, find a way to do it right.

I've gone out on a limb to say this for you, bear that in mind.

edit:

There might not be any chillingeffect though. Thoughts?

Here's the sad part: All the key concerns are highly aware of all the above, hence them that fretting the lost YOUR money, now there's.

~Bruno~

Didn't they say that they still have 70%? "Only" 30% stolen?
Once you drag them to court and they have to file bankruptcy I am sure we will get nothing, or in any case way less than 70%.
So how is that better?

Get MemoryDealers in on the lawsuit, and I think the stack of money would be high enough for the lawyers to care.

Really?  Then have the police tell me they don't understand it, not you. Using this an excuse for lack of police involvement is nonsense.  The police have not become involved because they could get IP logs from ISPs and trace them right back to the inside job.

does it though?

i'm trying to imagine going to the police about something like this. can you imagine trying to explain to them what bitcoin is, how it works, how you were "hacked" and lost money, etc etc.

would introduce nightmarish bureaucratic hell to one's life and wouldn't exactly help "solve the case"

makes no sense to me whatsoever.

All the more reason to sue.

Right now they are broke because the coins and cash have been moved internally and announced as theft/hacks.  The first thing a lawyer will do is get a police investigation going, which will lead to criminal charges and the recovery of said coins/cash.

Don't believe for a second this wasn't an inside job.  The lack of police involvement pretty well proves it.

You need at least 3 elements for a class/representative action.  A court to certify that there's a cause of action; a court to certify the plaintiffs as a class (you need a minimum number of plaintiffs for this); and a defendant with deep enough pockets to pay the award being sought.  In this particular instance, you're also going to need a court to accept jurisdiction.  You will need to hire local litigation lawyers in each jurisdiction where an action is bring brought and you will need a means of funding that litigation.  

You also need to make absolutely certain that you are suing the right defendant/s. You need to be aware that exemplary damages are awarded very rarely in some jurisdictions and that any such awards tend to be very low.  It's highly possible that you would ultimately receive less money pursuing a representative action than you would taking action to have a liquidator appointed or seeking payment through conventional means.


This is mostly true but at that point they would no longer control any of the funds/assets.  Those would be under the control of the liquidator/administrator, who has the power to reverse any transactions which took place during the lookback period preceding the insolvency and force disgorgement of funds from anyone who received inappropriate financial preference or who transferred assets during that period.

If they file for bankruptcy you wont even be able to contact them. The laws on this are very strict in both NZ and Australia.

This would include PM's on the forum I imagine.

Its better than nothing.

You wont get your BTC, but you may be able to get USD.... But I highly doubt it. These people are already broke... Patrick and others have already started this.... Once they go bankrupt, you aint getting shiiiiiit....

Remember tho, you wont get the value of btc today or in the future...You'll prolly get the same value of btc when it was hacked, which was around $4.30 if I remember correctly.

Good luck! 

BadBitcoin contacted me today on Skype regarding this as I am based in Wellington, New Zealand and may be in a useful position to brief a local lawyer I know who is good at commercial law, and is also ex-New York so he might be useful for the US based aspects of this.

(I also know I have the worst first name for this thread.)

You setup a company protected by the government then  when it comes time to call the cops when a break in happens you claim "we dont believe in government interference" 

Please tell me how that makes sense.

http://en.wikipedia.org/wiki/LTD
http://en.wikipedia.org/wiki/Limited_company