Topic: Jonathan Ryan Owens locked Rebate, Zip.A, Alberto & BDT thread - page 2. (Read 10310 times)

I don't think I'd go so far as to call it a fraud to pay out "false dividends." Sloppy, though, to perhaps be generous. I know Goat, for example, paid dividends to shareholders of TyGrr when he said he was operating at a loss, and I've paid gratuity dividends to holders of both BDK and BDK.BND, even though I was not contractually obligated to, and it cut into the company's equity, which at least affects holders of BDK. I did make sure to state the dividends were not from BDK profit, however.

ETA: If anyone wants any other questions answered, I'll tell anything I know, with one exception, being why JRO has been despondent and self-isolated for a few weeks, and has not made payments, as that involves something personal to him which I wouldn't feel right about disclosing without permission. I'll probably disclose that story eventually if I'm convinced not to expect repayment, though.

Wow, thanks for your answer Kluge, I didn't know this. So it's actually outright fraud, pretending to run a business with income while it's not even operational. I bought shares (luckily not many) based partly on the previous dividends, as the contract explicitly stated dividends would represent 1/50000 of fees. This gave me the impression that the business was up and running and generating income.
I know due-dilligence and all that, but I haven't seen anything about this before in the forums and I'm not the only one, as the bond traded for more than double of face value after I bought.

It wouldn't have bothered me as much if I invested in a venture that turned out to be unprofitable and I lost money, as long as the issuer was honest and did his/her best.

But it does bother me that ZIP.A turned out to be more or less a fraud, and I'm not gong to lie, I was fooled big time.

Looks like 750-850BTC was paid out in dividends. He allegedly raised 10kBTC (I think it's more likely he paid someone like INAU buy the bulk of shares at a discount and resell them, which isn't too uncommon), and of course he didn't issue more shares of Zip.A, so I'm not sure that's much of a Ponzi. However, he did launch REBATE soon after. I'm not sure how much that one raised -- I never liked the idea much... I'm assuming it raised significantly less than ZIP.A. Again, however, that one I know was sold to a large purchaser/reseller who does roughly the same job as an underwriter - takes the risk and hassle of the IPO, but has a great profit margin unless things go South.

Kronos was scheduled to raise funds after REBATE, but I started some shit with the GLBSE team over launching a competing service, and the Kronos IPO was promptly cancelled by GLBSE, with ZIP.A/REBATE/BDK/BDK.BND frozen for a while. We never re-tried a Kronos IPO, because the service was compromised at almost the same time, which led to Alberto being removed. That was problematic, since he was one of the lead devs. Another was found (the service had to be built from the ground-up because the code was no longer trusted), but he ended up declining. There was, for a time, talk also about raising funds for 20Mission. This obviously won't go forward until the situation changes dramatically, but that may be fine, since they don't need to pay rent until January, I believe, and the idea makes good business sense, even excluding commercial leasing ideas.

Obviously, funds were being muddied. The solution to that was to launch "IceHill," which would've made the sloppy accounting more acceptable, where the parent company would move funds around as needed, instead of having isolated projects which'd need to raise funds by themselves. Based in Iceland, IceHill would be the parent company of the service-providers. The IP rights were to be held by RingCoin, based in SFO, and still in existence, AFAIK. Unfortunately, IceHill ended up existing de facto as JRO, with him moving funds around to different projects as he pleased, without respecting accounting barriers (AFAIK). I'm not much one to talk, though... I fairly frequently mix business funds with personal funds.

A Ponzi, you mean. Paying dividends to investors from the investors own money until it ran out, right?

ZipConf is currently unable to prevent sophisticated double-spends, like a Finney attack. AFAIK, it can prevent very simple double-spends, but basically it'd act mostly as an insurance agent, which just makes it a giant target for sophisticated attacks. When it was brought up that the entire system should be re-coded, it was thought to be too expensive, and the project was put on the back-burner. So, it just sits in "beta."

I doubt the dividends were "accurate."

Exactly.

What do you mean by hasn't worked? You mean hasn't been operational or just not working fullt as intended or having lots of bugs? I'm asking, because I wasn't aware of this and according to dividend payments, ZipConf was collecting around 250+ BTC in fees per week up until the end of July, which would be a bit suspicious if it wasn't operational...

You have a source on 5k in JRO's Gox account?

I think people are wondering where the money came from for other projects the same people were working on and whether any of the funds raised for Zipconf and rebate was used on those other projects.  It should really be a simple matter to issue a "here's what was raised, here's what's left, and here's how we spent the rest" statement for both Zipconf and rebate and reluctance to do so will only generate suspicion and distrust.

lol

5000btc of it is sitting in Mt Gox in JRO's name. This account was setup just after the "hack of Kronos.This account has been frozen.

The other 5000 ? Wasted on developing Zipconf which hasnt worked from day one.

Just as a surveillance society with the ambition of making the world more open end up making a culture of secrecy, the bitcoin culture with its theme of anonymity will lead to a completely open society.  In the future I don't expect many in the bitcoin world will be willing to invest or loan to anyone not willing to publically release personal information and remove any attempt to have limited liability.

In a few months there will be bitscalper part 3 so be prepared.

People shouldn't be putting money they can't afford to lose or to which they need short-term access into these ventures anyway, but the moment any question about how funds are being used arises people are going to become understandably reluctant to leave their money in the hands of the person whose actions are under scrutiny for another day/week/month/year.

There's nothing to stop those who are willing to wait for payment from voluntarily placing themselves at the back of the line, but there's also no reason why others shouldn't require more information about how funds have been spent to date and just how large the hole is before deciding whether they're prepared to wait for payment or not.  Some people will let their investment ride on faith and others will want to recover what money they can and invest it in projects they consider more viable. 

With increased use of crowd funding comes increased accountability.  Investors aren't personal benefactors and that needs to be acknowledged by those seeking funding for their projects.

Unfortunately the Bitcoinica folks have made your suggestion less palatable to most. Waiting has the highest chance of succeeding if you have someone guiding the process so it is in the interest of investors (receivership etc.). Otherwise it just gives more time to blur responsibility and muddy evidence.

People who run shady or negligent operations need to be held as accountable as possible. Otherwise it will add unnecessary difficulties to well run operations.

Frankly, the people who make the most money will be the people who hide all their money under their mattress rather than invest in sketchy companies formed entirely over the internet.

Unless there is some kind of formal mechanism and ways to hold officeholders responsible, I am not investing a bit.

You guys lost money? This is why I dare not to touch any GLBSE funds with a ten foot pole.

JRO, from the paste:

JRO seems vengeful and angry.  Between the sockpuppeting and this paste, I'm beginning to think JRO is responsible (or coordinating with those who are) for the BDT hack. 

There are some big questions about how he is managing his money.  People who saw ZIP or REBATE as good investments are going to bail regardless - a loan from a deadbeat is very different than a bond/equity in a growing business.   

Sorrry Kluge, but his reputation is already dead from where I'm looking.  I'd recommend dumping and getting out while you can.

+1000 My thoughts exactly and the reason why I'm not "shit-storming" right now despite the situation. Instead, I am encouraging Alberto to focus on fixing the security holes in BDT. As I've said several times, these security holes are not hard to fix at all, a few weeks max with the source-code and it could all be resolved, and probably just a few days for the most glaring stuff. Then it just needs a long period of testing and hardening.

But yelling, screaming, and fingerpointing does nothing to help anyone at this point; if anything, as you put it, it reduces the odds of investors coming out on top.

JRO received from Zipconf and Rebate IPO approximately 10000btc.
Where he spent all this funds? Or all this funds were stolen from the Kronos?
I do not believe it! Why it was necessary to deposit such sum to the beta project?
I invested btc in zipconf and rebate, why I'm losing all their funds because of the Kronos hack? I would like to hear a clear answer from the JRO, what happened with 10000 btc, which were obtained from the IPO?

You can't collect from someone with no money, and a shitstorm will damage reputation necessary to collect funds for payback.

I suggest everyone just keep calm, and give this a couple months' more time. Investors could be screwed, yes, but collecting at this point won't salvage much. We can be angry, but try to keep it out of mind for a while. These various securities have effectively become loans, and I can speak from experience to say it's a very bad idea to ruin someone in trying to collect money when they need to collect money themselves. Loans need to be symbiotic, and that means you can't immediately turn on the rape switch when someone's in default. To do otherwise would result in tragedy for everyone with their neck out. Partial loan calls can be symbiotic if it forces a business/individual to cut away all the fat, but in this case, we'd be taking all his meat.... okay - bad analogy.


JRO might speak in depth, eventually... hopefully - but at this point, it seems we're better off expecting repayment within a year, and not demanding answers in the meantime. I believe I am most exposed, fwiw. I don't mean to be a bully, and I have no authority to do so, but I would very much unappreciate actions which harm JRO, as it harms everyone with money in him. Especially if you have nothing at stake, please shut up.  

ETA: Not directed at anyone in particular.