Pages:
Author

Topic: bitfloor needs your help! - page 34. (Read 177473 times)

legendary
Activity: 2506
Merit: 1010
September 04, 2012, 05:57:13 PM
Not sure where people get the idea that bitfloor "can't" repay USD account holders.

Let's say I make sandwiches and I buy on credit some cooking equipment and I bought on credit some bread, meat, vegetables, etc.

And then my safe gets robbed overnight and I am insolvent.

I am not allowed to then let the cooking equipment vendor come and reclaim his equipment while the unpaid debt to the grocery supplier remains unpaid because I had previously sold the sandwiches and the food is now gone.

When you deposited USDs with BitFloor, you are in the same pool as the person that deposited BTCs.   They are all the same category -- customer assets.

Those with BTCs can get an injunction to freeze the USD funds but apparently nobody cares
legendary
Activity: 3514
Merit: 4895
September 04, 2012, 05:56:39 PM
It really would be interesting to have access to the TOS.  Without that, anything said by iCEBREAKER and DeathAndTaxes is nothing more than what they hope/want to have happen.
donator
Activity: 1218
Merit: 1079
Gerald Davis
September 04, 2012, 05:53:24 PM
I would also point out that our company is owed both USD & BTC but I am willing to give shtylman time to resolve the situation.  If it came to a lawsuit well we are simply writing the BTC off as trading losses and going forward with a USD lawsuit.  It simply isn't worth the filing costs for a claim with a snowball in hell's chance of even being heard.
hero member
Activity: 560
Merit: 500
I am the one who knocks
September 04, 2012, 05:51:58 PM
Keep in mind that the law is not only the constitution.
legendary
Activity: 2156
Merit: 1072
Crypto is the separation of Power and State.
September 04, 2012, 05:51:05 PM
Not sure where people get the idea that bitfloor "can't" repay USD account holders.

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

Quote
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]

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. 


^^This^^

Well put, thank you D&T for clearly making the point I've been struggling to establish.

In case it's not clear to the dimwit collectivists, the "creditors who essentially have an open and shut case when it comes to a lawsuit" are we who have USD held by BitFloor, not the magical internetnerd token owners.
donator
Activity: 1218
Merit: 1079
Gerald Davis
September 04, 2012, 05:50:58 PM
Yeah IceBreaker the US constitution has absolutely nothing with this situation.  It actually weakens your position because it is so off-the-wall offtopic.
legendary
Activity: 3514
Merit: 4895
September 04, 2012, 05:47:45 PM
Quote
Those are my USD, not yours . . .

This is not at all clear under US law, which would presumably apply given Bitfloor's ties to the US.

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

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution


Full text:
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Based on this it appears that it actually says:
"No person shall . . . in any criminal case . . . be a witness against himself, nor be deprived of life, liberty, or property, without due process of law."

Note the location of the semi-colons.

As such this amendment refers only to a limit on the government's ability to deprive you of your property without due process, and nothing to do with BitFloor's ability to deprive you of what you believe to be your property until they can determine their legal responsibilities.
hero member
Activity: 560
Merit: 500
I am the one who knocks
September 04, 2012, 05:47:40 PM
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.
What !??!?!?   What am I supposed to do with my Internet Law Degree?   I got it from this guy named pirate... he said it was legit....
legendary
Activity: 2156
Merit: 1072
Crypto is the separation of Power and State.
September 04, 2012, 05:44:45 PM
Quote
Those are my USD, not yours . . .

This is not at all clear under US law, which would presumably apply given Bitfloor's ties to the US.

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

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution


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.

You are assuming facts not in evidence:

1)  Bitcoins have not been legally recognized as anything other than magical internetnerd tokens.

2)  Bitcoin is an experiment, there is no implied warranty or service-level agreement.

3)  BitFloor has not formally declared bankruptcy, which is the only way they can legally hold USD without the owners' consent.

4)  While bitcoin is uncharted legal territory, regulations for transactions regarding USD are well known and quite settled.  You can't detain or steal legally-recognized USD "because bitcoin."
donator
Activity: 1218
Merit: 1079
Gerald Davis
September 04, 2012, 05:44:39 PM
Not sure where people get the idea that bitfloor "can't" repay USD account holders.

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

Quote
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]

Given that both Bitcoin and USD creditors "could" sue bitfloor and considering the relatively likelihood of each lawsuit and the relative likelihood of each being successful, the prudent thing for bitfloor to do would be to repay those creditors who have a high probability of success to preempt the lawsuit and seek plans for long term restitution (if viable) for those who's only recourse would be a totally unproven lawsuit of dubious merit.
sr. member
Activity: 449
Merit: 250
September 04, 2012, 05:44:30 PM
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.
member
Activity: 113
Merit: 10
September 04, 2012, 05:41:36 PM
Quote
Those are my USD, not yours . . .

This is not at all clear under US law, which would presumably apply given Bitfloor's ties to the US.

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

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution

The fifth amendment has no bearing on this issue.

If your sole qualification for making statements about US law is the fact that you have an opinion about US law, you might want to STFU before you make a fool of yourself to a greater extent.
legendary
Activity: 3514
Merit: 4895
September 04, 2012, 05:41:32 PM
. . .I am quite upset about not being able to pull my money out....

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. . .
But it may be a reasonable interpretation of the BitFloor TOS.  This has not yet been established.
hero member
Activity: 868
Merit: 1000
September 04, 2012, 05:41:11 PM


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

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_tSates_Constitution



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.


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

The laws apply from the moment the insolvency occurs (or can be anticipated) whether or not bankruptcy has been filed - that's why payments made prior to the filing of bankruptcy can be clawed back and why making preferential payments within a class of creditors is an offence in and of itself.

The possibility of trading out in some way exists here and Bitfloor is legally obliged to consider all options which would maximise the return to its creditors (including selling the business in part or in whole), but it cannot legally give preference to any unsecured creditors while it's insolvent (which it is at this point in time).
legendary
Activity: 3514
Merit: 4895
September 04, 2012, 05:39:52 PM
. . .Please show me where BitFloor has filed for bankruptcy, and then you might have a point.  Otherwise your post is non sequitur.
I'm sure that is one of several options that are being considered and discussed with Legal Counsel.
legendary
Activity: 2156
Merit: 1072
Crypto is the separation of Power and State.
September 04, 2012, 05:36:52 PM


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

Quote
No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_tSates_Constitution



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.


Please show me where BitFloor has filed for bankruptcy, and then you might have a point.  Otherwise your post is non sequitur.
legendary
Activity: 2156
Merit: 1072
Crypto is the separation of Power and State.
September 04, 2012, 05:34:39 PM
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....

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.  Sorry, the communists here are starting to confuse me.   Roll Eyes



hero member
Activity: 952
Merit: 1009
September 04, 2012, 05:33:50 PM
@unclemantis... You should probably read the rest of the thread
hero member
Activity: 560
Merit: 500
I am the one who knocks
September 04, 2012, 05:32:26 PM
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.   Cool
My apologies then, I misinterpreted your intentions.
member
Activity: 98
Merit: 10
(:firstbits => "1mantis")
September 04, 2012, 05:32:10 PM
Please quantify the amount of BTC lost as well as the total BTC owed.
What % of BTC were lost?

From the tx it looks like 30K BTC in outputs (although one involved two large outputs so it is unclear what is going on there).

This was almost all of the BTC.

Was there a loss of any USD funds?

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

I had BTC BID order in place. Will all orders be canceled automatically or will business be as usual once you get up and going again?

I am revealed that USD is SAFE. My BID order will be the largest to date with Bitfloor.

I am not panicking. I am sure you have everything under control.

I can't wait to start trading with Bitfloor again!

If there is anything I can do let me know. Credentials are below in my SIG.
Pages:
Jump to: