Topic: [Payout Updates] Bitcoinica site is taken offline for security investigation - page 17. (Read 156711 times)

I have some more info from the intersango team and I will post it as soon as I get get a fair summery of it. It seems that they are responsible for it (however they seem/claim to have been tricked into accepting that responsibility). More soon...

You think you and your team are owed respect for the way you have dealt with this? That might be were the problems started...

I do not care what the Intersango team wants to call bitconica now. We know who is claiming to be in control.


As for your quote "100% of my time and effort is donation."

Then quit and let the people who are legally responsible deal with it, at this point it can't get worse.

Just say this, Sorry bitcoin public but it has been two months and we just now realized we are not complainant enough to deal with the problem we took on. Since it is not our responsibility and it is only destroying our personal reputation and the reputation of Intersango we will give back all of the money to the real owners of Bitcoinica.

However I'm pretty sure you can't do this, too bad for you and us really. There is no way you guys can walk out of this with your heads up and there is no customer (other than the friends of Intersango team who got back 100% so far) who can be happy with your actions.

There is no win here for anyone, even if you were to return 100% of the coin to everyone tomorrow this will not be forgotten.

Good luck.

I haven't done much research, but to my best knowledge, DRS only applies to NZ residents.

Over 99% of Bitcoinica customers are not NZ residents so they are not classified as "retail clients". I believe that the company had plans to amend the Terms of Service to mention the illegibility of NZ non-accredited/non-institutional investors for Bitcoinica service.

From: FSPR Compliance [email protected]

Dear Sir

I refer to your query below.

All financial service providers must be a member of a dispute resolution scheme in respect of a financial service provided to a retail client.  A retail client is defined in section 49 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 as any person who is not a wholesale client.  There is no requirement that retail clients be New Zealand customers.

There is no offence provision where a FSP is not a member of a dispute resolution scheme.  The Registrar will inform the Financial Markets Authority of your complaint.

[21] Governing Law; Arbitration and Court Jurisdiction

Binding Arbitration: For any Claim (excluding Claims for injunctive or other equitable relief) where the total amount of the award sought is less than $10,000, you or Bitcoinica may elect to resolve the dispute through binding arbitration conducted in person, on-line or based solely upon written submissions where no in-person appearance is required. In such cases, the arbitration shall be administered in accordance with New Zealand law or any other established Alternative Dispute Resolution provider mutually agreed upon by the parties. Any judgment on the award rendered by the arbitrator may be entered, exclusively, in any court located within New Zealand. Exclusive Court Jurisdiction: Alternatively, you agree to submit to the personal and exclusive jurisdiction of the courts located within New Zealand to settle any dispute, which may arise in relation thereto.

I will be making a post tomorrow.. This is more fucked up than most could even think...

Dear Bitcoinica team,

Please stop using my name "Ryan" for any outbound emails. It's my de facto Christian name.

Also, stop mentioning my "plan". I have received no contact from you for almost two month and it's simply wrong for you to judge my involvement in Bitcoinica either morally or legally.

I'll resign immediately when 50% of funds have been paid back, or upon receiving your instruction, whichever is earlier.

I reserve the right to protect my reputation.

Okay - here's where "piercing the corporate veil" comes in. Sometimes, when investors are also officers who run the company, they run it really really badly. Stupidly. Irresponsibly. Maybe even illegally. When that happens, the law says that the corporate form shouldn't protect those particular investor-officers.

Let's say you and I are investors in a company, each in for 20%. But let's say that I am also the CEO, and you are just someone who owns 20% but doesn't actually run the business. You are kept apprised of what's going on periodically, but you don't make the decisions.

Now, let's say I take some of the corporation's money to Vegas and lose it, and the corp can't pay its electric bill. Now, under the general rule I discussed above, since you and I are 20% investors then we are each liable for 20% of the electric bill. But that isn't fair, is it? It isn't fair that you should be on the hook for 20% of that electric bill when the bill wasn't paid because I did something unlawful.

Since I personally did this bad thing, the law makes an exception to the general rule. It says that I personally should be liable to the electric company. It says that the electric company should be able to "lift" or "pierce the corporate veil" that would otherwise protect me as an investor, and reach out and get me, personally, to pay for the entire electric bill.

So that's what piercing the corporate veil is: it's an exception that allows for investor's to be held entirely responsible (the old-fashioned way they used to) for debts of the corporation. But it usually only applies when the investor has done something bad in running the company that he should not have done. Usually something illegal or unlawful.

(other than the friends of Intersango team who got back 100% so far)

They don't feel it is their fault, didn't identify with Bitcoinica since it was not their baby, and now they feel punished to have to clean up the mess.

I really don't understand how the actions taken by Bitcoinica are accepted by anyone in the community.  They don't take any responsibility for the hack, even though it was trivial for the hacker to gain access due to their extremely poor security procedures. Now they continue to use unsecure methods of communication to discuss payouts.  Why are we letting them get away with this? The name calling? the threats to stop returning money? saying no one owned the company and is responsible?

At the very least we should be removing all links to Intersango, boycotting them and labeling their usernames scammers on the forums. The same people are responsible and will use the same moral code they are right now if anything goes south with Intersango. They continue to make money while we sit without our funds for months. I have offered to donate for legal fees against bitcoinica, too bad no one seems to be willing to take legal action, I have only lost a couple hundred so not worth it by myself. Right now they are getting away with a half million dollars and no one is stopping them. If we let this happen their will be even more fraud even more "hacks"

That is not at all what Zhou was suggesting. Here is his plan:

https://bitcointalksearch.org/topic/m.921368
...

His plan was to pay the most vocal people 100% of their claimed amount.

Those funds would come directly out of other users pockets.

There are x assets and y liabilities.

x < y

If people are paid 100% of their claims, necessarily those funds are coming out of other users pockets.

Not only is this strategy immoral, but it is arguably illegal.

Of course the intention there is to save face and to give back funds to people most likely to litigate.

I will have no part in anything I believe to be immoral.

His plan was to pay the most vocal people 100% of their claimed amount.

--- Disclaimer: Pure suggestion. NOT OFFICIAL ---

- Your bitcointalk.org profile or Bitcoin-OTC rating shows you as reputable and trustworthy. (50 Points)
- You can supply at least one transactional email you have received which perfectly matches our outgoing transactional email records. (30 Points)
- You can provide passport scans and you have provided to Bitcoinica (even if it's pending verification). (40 Points)
- The order of magnitude of your reported balance is consistent with our outdated accounting records. (30 Points)
- You can recall the balances exactly or very precisely. (20 Points)
- You have reported a losing position, with precise details. (20 Points)
- You have contacted Bitcoinica Support at least once since September 2011. (10 Points)
- Your email can be searched online and matches your identity. (10 Points)
- You can provide proof of Bitcoin address ownership (signature), Mt. Gox code you have used/obtained or accurate details of large transaction records (>2500 BTC) that match our hedging activity. (10 Points each kind of evidence)
- Another reputable member supports your claim. (10 Points)
- You have used wire transfer, BitInstant or AurumXchange to deposit/withdraw funds and they can verify the records. (10 Points)
- You have submitted the claim within the first 24 hours since the announcement. (10 Points)

If there are no transactional emails or support emails ever sent to the claimed address, 0 Points for now.

If you get >= 100 Points, you should be refunded immediately.
If you get >= 50 Points, you can expect partial refunds first. The percentage of partial payments will be calculated using the formula (let P be the points you get):

Partial payment in % = (P/10)^2

e.g. If you get 90 Points, you receive 81% of the claimed amount first. If you get 50 Points, you receive 25% of the claimed amount first.

The rest of the claimed amount will be honored after every request has been processed. Then we can use cross reference to match the remainder records, and hopefully a copy of database can be obtained or leaked. If needed, we can also use external moderation to decide asset ownership.

--- Disclaimer: Pure suggestion. NOT OFFICIAL ---

From the sounds of it Zhou was the only one that had any actual day to day ops knowledge of the system.   This was probably the best plan given that right now you are basically trying to put together a puzzle with a million pieces and you don't even have the box to refer too for what the fucking thing is supposed to look like.

17 year old asian kids remember everything.

As for Zhou's "plan" that is precisely what he said he intended to do, a strategy I find to be immensely immoral.

If you didn't get a confirmation email then you either did not open a claim successfully or your email provider classified it as spam.

Almost everybody has received additional emails requesting payment instructions as well.