Topic: [Payout Updates] Bitcoinica site is taken offline for security investigation - page 52. (Read 156711 times)
June 12, 2012, 01:21:10 PM
So people that have open position on bitcoinia still don't know what is going on with that... and the price in bitcoins are going up, wouldn't you hire more staff to handle these claims before the price in bitcoins really goes higher... The longer bitcoinica takes the more they lose, and im speculating that bitcoins will be alot higher before I get my bitcoins back.
June 12, 2012, 10:56:57 AM
Ofcourse it wasn't a PR problem. Did anyone asked them for money or sued them? As fast as it was reported it died.
I guess most of the persons who could give them a fight are too embarassed to admit they even use bitcoins, to begin with.
I guess most of the persons who could give them a fight are too embarassed to admit they even use bitcoins, to begin with.
June 12, 2012, 10:51:02 AM
Edit: To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.
diagnosis: nonsense
treatment: contract law 101
Then I'm at a loss for why bitcoinica didn't go after Linode? I'm sincerely asking here, I don't know much about contract law. Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?
Bitcoinica got $350k stolen from them in 2 different hacks and they didn't report it to the police. What are you expecting? Miracles?
Add to it that those thefts, even without the theft of the bitcoins, would be a crime of computer intrusion and it's even more surprising that none of them were reported to any authority.
If they had been reported, do you think that Linode could have been held responsible for the value lost despite that their ToS states that they aren't?
I bet the PR nightmare would make them reach a deal and pay long before it went to trial.
There didn't seem to be too much of a PR problem for them and the story was accurately reported on a bunch of widely read websites (e.g. Arstechnica). IIRC, Linode explicitly admitted it was their system that was compromised because of the way they had their customer service portal configured.
June 12, 2012, 10:18:15 AM
Edit: To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.
diagnosis: nonsense
treatment: contract law 101
Then I'm at a loss for why bitcoinica didn't go after Linode? I'm sincerely asking here, I don't know much about contract law. Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?
Bitcoinica got $350k stolen from them in 2 different hacks and they didn't report it to the police. What are you expecting? Miracles?
Add to it that those thefts, even without the theft of the bitcoins, would be a crime of computer intrusion and it's even more surprising that none of them were reported to any authority.
If they had been reported, do you think that Linode could have been held responsible for the value lost despite that their ToS states that they aren't?
I bet the PR nightmare would make them reach a deal and pay long before it went to trial.
June 12, 2012, 10:08:32 AM
Edit: To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.
diagnosis: nonsense
treatment: contract law 101
Then I'm at a loss for why bitcoinica didn't go after Linode? I'm sincerely asking here, I don't know much about contract law. Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?
Bitcoinica got $350k stolen from them in 2 different hacks and they didn't report it to the police. What are you expecting? Miracles?
Add to it that those thefts, even without the theft of the bitcoins, would be a crime of computer intrusion and it's even more surprising that none of them were reported to any authority.
If they had been reported, do you think that Linode could have been held responsible for the value lost despite that their ToS states that they aren't?
June 12, 2012, 10:02:19 AM
Edit: To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.
diagnosis: nonsense
treatment: contract law 101
Then I'm at a loss for why bitcoinica didn't go after Linode? I'm sincerely asking here, I don't know much about contract law. Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?
Bitcoinica got $350k stolen from them in 2 different hacks and they didn't report it to the police. What are you expecting? Miracles?
Add to it that those thefts, even without the theft of the bitcoins, would be a crime of computer intrusion and it's even more surprising that none of them were reported to any authority.
June 12, 2012, 09:48:39 AM
Edit: To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.
diagnosis: nonsense
treatment: contract law 101
Then I'm at a loss for why bitcoinica didn't go after Linode? I'm sincerely asking here, I don't know much about contract law. Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?
June 12, 2012, 09:44:40 AM
I haven't done much research, but to my best knowledge, DRS only applies to NZ residents.
I can not find this restriction in the Financial Service Providers (Registration and Dispute Resolution) Act 2008:
http://www.legislation.govt.nz/act/public/2008/0097/latest/whole.html
Quote
7Application of Act
(1)This Act applies to persons who are in the business of providing a financial service.
(1)This Act applies to persons who are in the business of providing a financial service.
Quote
8ATerritorial scope
This Act applies to a person who—
(a)is ordinarily resident in New Zealand (within the meaning of section 4 of the Crimes Act 1961) or has a place of business in New Zealand, regardless of where the financial service is provided; or
(b)is, or is required to be, a licensed provider under a licensing enactment.
Section 8A: inserted, on 1 July 2010, by section 10 of the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2010 (2010 No 41).
This Act applies to a person who—
(a)is ordinarily resident in New Zealand (within the meaning of section 4 of the Crimes Act 1961) or has a place of business in New Zealand, regardless of where the financial service is provided; or
(b)is, or is required to be, a licensed provider under a licensing enactment.
Section 8A: inserted, on 1 July 2010, by section 10 of the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2010 (2010 No 41).
So this only applies to the director of BITCOINICA CONSULTANCY LIMITED (Christopher Heaslip from http://www.irstax.co.nz/ )
Even if what you said is true and DRS only applies to NZ residents, BITCOINICA LP would still be required by law to register with a DRS if at least 1 customer of Bitcoinica.com is a resident of NZ.
Zhou is right:
Quote
Section 48
(1) Every financial service provider must be a member of either an approved dispute resolution scheme, or the reserve scheme, in respect of a financial service provided to a retail client.
Bitcoinica are thus required to have a DRS in respect of their 'retail clients'. Given that this is NZ legislation, 'retail clients' can be taken to mean NZ retail clients. So unless you're from NZ, this won't really help you. In any case, Bitcoinica seem to have begun the refunding process. Why not give them a chance to resolve the matter themselves?
Involving a DRS, just like suing Bitcoinica, will only result in further delay, difficult and expensive arbitration proceedings as lawyers argue over the difficult legal questions around whether Bitcoins constitute money or not, and ultimately, less money refunded to Bitcoinica users. In my opinion, the best approach would be to simply submit a claim and wait it out - as hard and unfair as that may seem. Let bitcoinica refund everyone as best they can, and then, if you're not still not happy, pursue it in the courts.
June 12, 2012, 09:44:23 AM
Edit: To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.
diagnosis: nonsense
treatment: contract law 101
June 12, 2012, 09:43:02 AM
tl;dr Bitcoinica thinks that having their computers hacked releases it from any liabilities to everyone.
I doubt they actually think this or are treating the incident as such, but still it would be good to hear it from a Bitcoinica LP representative themselves.
I just tl;dr'ed what they said in those terms and conditions. So that even non "wikipedia lawyers" can understand.
June 12, 2012, 09:41:03 AM
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.
You mean the Terms of Service available at: https://bitcoinica.com/pages/tos ?
Oh, that's right - Customers did not have access to terms of service for over a month, at a time where it matters the most.
Speaking of ToS:
Quote
[17] Force Majeure
You agree that Bitcoinica will not be liable in any way to you or to any other person in the event of force majeure, or for the act of any Government or legal authority, or for the failure of or damage or destruction to its computer systems, data or records or any part thereof, or for delays, losses, errors or omissions resulting from the failure or mismanagement of any telecommunications or computer equipment or software. The parties shall be released of all responsibilities for partial, full or non-fulfillment, as well as for improper fulfillment of the obligations under this Agreement, if such non-fulfillment or improper fulfillment was a result of extraordinary events, which occurred after this Agreement was concluded and which the party could not either foresee or prevent (natural calamities, wars, armed conflicts etc.).
You agree that Bitcoinica will not be liable in any way to you or to any other person in the event of force majeure, or for the act of any Government or legal authority, or for the failure of or damage or destruction to its computer systems, data or records or any part thereof, or for delays, losses, errors or omissions resulting from the failure or mismanagement of any telecommunications or computer equipment or software. The parties shall be released of all responsibilities for partial, full or non-fulfillment, as well as for improper fulfillment of the obligations under this Agreement, if such non-fulfillment or improper fulfillment was a result of extraordinary events, which occurred after this Agreement was concluded and which the party could not either foresee or prevent (natural calamities, wars, armed conflicts etc.).
I assume Bitcoinica is not treating this incident as Force Majeure? If not, how is Bitcoinica LP treating it?
Let's assume that those tos are geniune.
See bold text. Bitcoinica, who the hell came up with this drivel for you. Do you really think you can write this shit into Force Majeure and everything is hanky dory and you can just continue to be be as grossly negligent as you are? Yea nice lawmanship. Get proper lawyer to draft for you the terms. Bitcoinica, with such drivel in force majeure clause you are way better off without one.
tl;dr Bitcoinica thinks that having their computers hacked releases it from any liabilities to everyone.
I don't see what's so shocking about that. Isn't that exactly what Linode thinks (as was written in their ToS), and, infact, what ended up being the case for the big hack a few months ago? If I remember, all Bitcoinica ended up getting was an apology and an offer of free service for a year.
Edit: To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.
June 12, 2012, 09:37:24 AM
tl;dr Bitcoinica thinks that having their computers hacked releases it from any liabilities to everyone.
I doubt they actually think this or are treating the incident as such, but still it would be good to hear it from a Bitcoinica LP representative themselves.
From Wikipedia: http://en.wikipedia.org/wiki/Force_majeure
Let's assume that those tos are geniune.
This is from the Google Cache:
http://webcache.googleusercontent.com/search?q=cache:bitcoinica.com/pages/tos&hl=en&biw=1600&bih=809&prmd=imvns&strip=1
Update: Oh sorry it now redirects to the root page. I made a copy here on May 14: https://bitcointalksearch.org/topic/m.900412
June 12, 2012, 09:28:12 AM
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.
You mean the Terms of Service available at: https://bitcoinica.com/pages/tos ?
Oh, that's right - Customers did not have access to terms of service for over a month, at a time where it matters the most.
Speaking of ToS:
Quote
[17] Force Majeure
You agree that Bitcoinica will not be liable in any way to you or to any other person in the event of force majeure, or for the act of any Government or legal authority, or for the failure of or damage or destruction to its computer systems, data or records or any part thereof, or for delays, losses, errors or omissions resulting from the failure or mismanagement of any telecommunications or computer equipment or software. The parties shall be released of all responsibilities for partial, full or non-fulfillment, as well as for improper fulfillment of the obligations under this Agreement, if such non-fulfillment or improper fulfillment was a result of extraordinary events, which occurred after this Agreement was concluded and which the party could not either foresee or prevent (natural calamities, wars, armed conflicts etc.).
You agree that Bitcoinica will not be liable in any way to you or to any other person in the event of force majeure, or for the act of any Government or legal authority, or for the failure of or damage or destruction to its computer systems, data or records or any part thereof, or for delays, losses, errors or omissions resulting from the failure or mismanagement of any telecommunications or computer equipment or software. The parties shall be released of all responsibilities for partial, full or non-fulfillment, as well as for improper fulfillment of the obligations under this Agreement, if such non-fulfillment or improper fulfillment was a result of extraordinary events, which occurred after this Agreement was concluded and which the party could not either foresee or prevent (natural calamities, wars, armed conflicts etc.).
I assume Bitcoinica is not treating this incident as Force Majeure? If not, how is Bitcoinica LP treating it?
Let's assume that those tos are geniune.
See bold text. Bitcoinica, who the hell came up with this drivel for you. Do you really think you can write this shit into Force Majeure and everything is hanky dory and you can just continue to be be as grossly negligent as you are? Yea nice lawmanship. Get proper lawyer to draft for you the terms. Bitcoinica, with such drivel in force majeure clause you are way better off without one.
Since when allowing your computers to get hacked or mismanaged is an equivalent of "Acts of God, Rulers, and Princes" ?
tl;dr Bitcoinica thinks that having their computers hacked releases it from any liabilities to everyone.
edit:
P.S. upon some reflection... if a 17 year old came up with that by taking some example off internet and adding some wishful thinking to it, I suppose it is understandable.
June 12, 2012, 09:21:50 AM
I am not the correct person to answer your questions. I have messaged the correct person.
That is fine, I don't want to take your time away from the business of verifying claims.
June 12, 2012, 09:19:37 AM
It is comforting to hear that things are beginning to move along. Again, I say take your time and do it right, but keep us updated.
June 12, 2012, 09:16:05 AM
I am not the correct person to answer your questions. I have messaged the correct person.
June 12, 2012, 08:13:05 AM
I haven't done much research, but to my best knowledge, DRS only applies to NZ residents.
I can not find this restriction in the Financial Service Providers (Registration and Dispute Resolution) Act 2008:
http://www.legislation.govt.nz/act/public/2008/0097/latest/whole.html
Quote
7Application of Act
(1)This Act applies to persons who are in the business of providing a financial service.
(1)This Act applies to persons who are in the business of providing a financial service.
Quote
8ATerritorial scope
This Act applies to a person who—
(a)is ordinarily resident in New Zealand (within the meaning of section 4 of the Crimes Act 1961) or has a place of business in New Zealand, regardless of where the financial service is provided; or
(b)is, or is required to be, a licensed provider under a licensing enactment.
Section 8A: inserted, on 1 July 2010, by section 10 of the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2010 (2010 No 41).
This Act applies to a person who—
(a)is ordinarily resident in New Zealand (within the meaning of section 4 of the Crimes Act 1961) or has a place of business in New Zealand, regardless of where the financial service is provided; or
(b)is, or is required to be, a licensed provider under a licensing enactment.
Section 8A: inserted, on 1 July 2010, by section 10 of the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2010 (2010 No 41).
So this only applies to the director of BITCOINICA CONSULTANCY LIMITED (Christopher Heaslip from http://www.irstax.co.nz/ )
Even if what you said is true and DRS only applies to NZ residents, BITCOINICA LP would still be required by law to register with a DRS if at least 1 customer of Bitcoinica.com is a resident of NZ.
June 12, 2012, 07:43:54 AM
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.
You mean the Terms of Service available at: https://bitcoinica.com/pages/tos ?
Oh, that's right - Customers did not have access to terms of service for over a month, at a time where it matters the most.
Speaking of ToS:
Quote
[17] Force Majeure
You agree that Bitcoinica will not be liable in any way to you or to any other person in the event of force majeure, or for the act of any Government or legal authority, or for the failure of or damage or destruction to its computer systems, data or records or any part thereof, or for delays, losses, errors or omissions resulting from the failure or mismanagement of any telecommunications or computer equipment or software. The parties shall be released of all responsibilities for partial, full or non-fulfillment, as well as for improper fulfillment of the obligations under this Agreement, if such non-fulfillment or improper fulfillment was a result of extraordinary events, which occurred after this Agreement was concluded and which the party could not either foresee or prevent (natural calamities, wars, armed conflicts etc.).
You agree that Bitcoinica will not be liable in any way to you or to any other person in the event of force majeure, or for the act of any Government or legal authority, or for the failure of or damage or destruction to its computer systems, data or records or any part thereof, or for delays, losses, errors or omissions resulting from the failure or mismanagement of any telecommunications or computer equipment or software. The parties shall be released of all responsibilities for partial, full or non-fulfillment, as well as for improper fulfillment of the obligations under this Agreement, if such non-fulfillment or improper fulfillment was a result of extraordinary events, which occurred after this Agreement was concluded and which the party could not either foresee or prevent (natural calamities, wars, armed conflicts etc.).
I assume Bitcoinica is not treating this incident as Force Majeure? If not, how is Bitcoinica LP treating it?
June 12, 2012, 07:37:15 AM
Quote
Membership in a DRS is mandatory for FSPs who provide a service to retail clients, because it provides consumers with an avenue for redress when a dispute arises with their financial service provider. Membership in a scheme is a pre-requisite for registration as an FSP.
Why did Bitcoinica LP not sign up with a Dispute Resolution Scheme?
Quote
FSPs who are unsure as to whether they need to join a dispute resolution scheme should seek legal advice.
Did Bitcoinica seek legal advice in this matter, if so what was the outcome?
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.
June 12, 2012, 06:14:51 AM
Just under 10% of claims have been verified, and I'm waiting on those payments to be made out soon.
5% of people are verified so far.
Looks like it is going the wrong direction.. give it a couple of days and we will be at 0% verified
So based on your calculation, It seems at this pace it will take at least another month to get all valid claims verified.
- Is the plan to have a refund round for every 10% of claims verified?
- How many people apart from genjix and phantomcircuit are actively involved in the verification process?
- Why is the verification & refunds not top priority?
Other unresolved questions:
But it does not matter who is legally in charge right now as the way forwards is clear and everyone is in agreement about what needs to be done. We will make the payments, we now have consolidated all the records and the money.
When you are withholding ~$1 Million of customers deposits for over a month, It does matter.
I'm sorry for asking so many questions but I need to understand how deep the hole is that I am in. You see, It was trust that got me into this hole and therefore I cannot depend on trust to get me out of it.
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