Topic: How is Bitinstant not at the top of this section? - page 3. (Read 4986 times)

Its probably inadequate funds at specific exchanges.

Looks like they're seeking more support employees: https://www.hireart.com/login?token=cbfykjd8

That is assuming they don't have the funds. It MAY (but I agree it's unlikely) be that their dev can not API and they're just processing orders manually or what.

Funding old orders that you couldn't deliver with money from new orders (that you won't be able to deliver unless and until further new orders come in) is the very definition of a Ponzi scheme.  They last until new orders stop or slow, as is beginning to happen here.  Then it all comes crashing down.

Why a Ponzi? If Ford Motors had a support board somewhere it'd look the same, people coming in with complaints, complaints getting resolved, new people coming in with new (or rehashed old) complaints.

Your theory seems highly speculative.

The problem is that what you just described is a Ponzi scheme, and those tend not to work out very well.  My gut feeling is that someone - most likely an insider - made off with their float.  That would include all of their cash in the bank, their BTC, etc. that they had for operating the business, plus all customer funds that happened to be in on that day.  As long as new money keeps coming in, they'll be able to keep the charade up, but I have never heard of one of these things lasting, and it appears that the natives are getting restless.  My guess is that the massive delays have caused the flow of new money to dwindle, which means that this thing is coming to an end sooner than later.  The email they sent yesterday is a pretty good indication that they have or are about to reach their breaking point.

Certainly this matches past experience with blowing up ventures, in general speaking.


It'd seem from randomly going through that thread that it's a list of people having issues which are then subsequently resolved only for new people to have new (or similar) issues later, which also get resolved. 30 days certainly doesn't sound too good but it also doesn't seem to actually be the case? I've not pored over the thread though, so maybe I've missed something.

This would certainly be the most innocent explanation.  However, for a service that promised BTC in a few hours, I'm not sure why they would ever sell more BTC than they had on hand plus the amount that they could buy in realtime to settle the transaction.  Surely one of the key design aspects of a system like this would be to make sure that under no circumstances were they taking on trading risk for even a single transaction.  They are a processing company, not an arbitrage company.  I can't imagine that they wouldn't have it programmed so that it automatically stopped taking orders for BTC the moment that they crossed into this territory.

So for those reasons, I still think there is a lot more to the story (the simple fact that they have been lying and have left us to speculate, points to much deeper issues as well).

It's unlikely that an API error would take them this amount of time to resolve. I'm guessing that they sold more BTC than they could buy at gox (aka ran out of money), and a price spike caught them off guard.

Yeah,  not going to happen.  The simple fact of the matter is that their system is automated.  If they had the funds, all transactions would be processed in a couple of seconds.  Code doesn't just break for all of their interactions with all exchanges at once, and in the trillion-to-one situation that all exchanges simultaneously issued changes to their APIs that broke Bitinstant's code with no prior notice, they would contact the exchanges, find out the new processes, and modify their code.  Then they would run the transaction processing script again, and all transactions would be processed in a few seconds.  At most, in this imaginary worst-case situation that would never occur, it would take maybe taken 3 hours to recover.  We are at over 30 days now.

I have been a web developer for 12 years, and a desktop software developer for 7 years before that.  These excuses simply do not hold water, and the fact that they are lying about technical issues to buy time should send up immediate red flags. They seem to be on life support financially and are just processing enough older transactions, likely funded with newer transactions (aka a Ponzi scheme), to keep a small flow of positive posts in the Newbies section.  That serves to keep hope alive and delay people from suing or contacting law enforcement, but it will only work for so long.

Bitinstant started off as a legitimate service, which of course is why everyone has given them so much slack.  But something either catastrophic or nefarious has happened over there, and it is quite apparent that they don't have a way to stop it from careening over the cliff.  Having watched a few of these things unfold in the real world, whomever is left over there that has clean hands needs to go into self-preservation mode.  Take the reigns, come clean publicly about what has happened, cooperate with any resulting investigations, and either take the company into bankruptcy or find investors willing to stop the bleeding. You don't want to go down with this ship.  The jig is up.

As I suspected:

All signs point to them not doing "amazingly well as a business".  If you look at that thread, the problems run far deeper than price spikes.  They have been caught in a couple of outright lies and have gone for weeks without responding to issues.  In fact, if their business operated as they claim to operate it, there would be zero risk on their end regardless of price fluctuations.  Something major happened that they still haven't and may not recover from, and they won't say what it is.  Maybe it's a scam and maybe not, but if the net result is the same - customer money being lost - the reason doesn't really matter much.  People still need to be warned.

Yeah, well, they need to start communicating.

Usually they are pretty good about handling things, so I'd guess that this price spike has simply overwhelmed them. I'd be surprised if they ran with the money given how amazingly well they are doing as a business...

I'm a little bit curious how Bitinstant isn't at the top of this section all the time.  There are ~85 pages of people wondering where their money is in this thread:

https://bitcointalk.org/index.php?topic=128314.1640

Bitinstant almost certainly owes more people more coins/money/mtgox coupons than anyone else in this section by a long shot, yet they aren't in here.  People keep posting in that thread saying that they wish they had seen the thread sooner, because they sent them money before seeing it and their money is now off in space.  I have absolutely no evidence that it is a scam per se, but a healthy percentage of their transactions are resulting in money simply vanishing.  Whether technical error or outright fraud, we may never know, but it clearly needs to be brought out more into the open than that one thread in the newbies section that people apparently have a hard time finding.