Topic: The Largest Bitcoin Scam of Them All? - page 7. (Read 12308 times)

Is this idea practical? The next person that offers up their Bitcoin product or service on this forum I, or any other person, post this on their thread:

Call Out: Request Full Disclosure (or something similar)

Just by knowing that they're going to be called out, will give every scam artist second thoughts on listing, let alone building, their business model.

Thoughts? Tweaks? Stupid? Let me know.

This shit has to stop and I, for one, am ready to draw that line in the sand.

Thanks for your email.. 

Emails, committees, and boards can all be faked. I'm actually more interested in how possible it would be to set up a legitimately working "corp" anonymously, using GPG keys, proof of funds ownership (easy with Bitcoin), customer feedback, and publically verified but anonymously published income statements and accounting documents (again, possible with Bitcoin if their internal transactions are also done via public block chain client). In short, a company that's possible to trust, that exists on the web outside of country borders, and without relying on personaly identifiable information to function (since even that isn't guaranteed protection against scammers).

hmm how about at a minimum:


The 'Companies' must follow generally accepted accounting standards. Have you seen how these 'Companies' are reporting their earnings? Did the people complete 6th grade math?

Have an independent Board of Directors

A minimum stock price set before delisting

Full contact information for the responsible party. [email protected] isn't full contact info.

Must respond to information requests in a timely manner.

An audit committee so what the 'owner' is saying is true. A picture of your bedroom isn't sufficient.

A report must be filed - in Bitcoin timelines, this should probaly be weekly.

Sufficient working capital for at least 6 months.

Public float - At least x% of shares must be owned by the public.

An audit committe for GLBSE to enforce standards.

I (not the OP) would recommend that GLBSE do something to establish the identity of the company.  They could get some kind of ID, do some kind of snail mail exchange or require an SSL cert that required identity checking (like a godaddy premium $99 cert).  This would not be a huge burden as they have less then 20 companies.  This would not be impossible to scam, but would raise the bar a good deal.  If you can not find $99 of your own money for your idea, it probably is not going to give investors any returns.  You have no skin in the game at all and nobody really knows who you are.

It seems the root of the complaint here is that the GLBSE is not subject to a regulatory authority, like the SEC. So, does the OP propose that GLBSE require companies to submit filing requests and million dollar fees to register with the SEC, to establish their own international regulatory agency, or does the OP propose establishing an independent ratings agency like Moody's or Standard & Poor?
Or does the OP propose to whine and bitch and waste everyone's time?

Haribo of America is practically an independent division, taking care of all of North America, doing their own thing, and only required to send financial statements and money (profits) to the main office. They chose which factory to order the candy from (which compete on price), which shippers to use, and whom to sell to for what price. I was one of the two accountants. Although the overall organization is no doubt large, it's split up into independent competing entities, with the main goal of making the owner of the overall private company rich.

I think New York Stock Exchange is the largest scam of them all.

Because Enron listed on the NYSE. That is why NYSE is a scam.

Exactly, good analogy. If you're dumb enough to give your money over to someone before taking the time to verify it is a sound investment in an honest entity, you're begging to have it taken from you.

I agree, there's a problem, maybe because the barrier to entry is so low, and that's why there are trading minimums and limits on real stock exchanges. Maybe another reason. I'm not an expert on this subject matter.

Haribo has 6000 employees, five factories in Germany, 13 in the rest of Europe, and a headquarters in Bonn. Check out Haribo HQ in Bonn. Half a city block, five story buildings, silos towering over the buildings, semitrailers with "Haribo" in colorful letters.  This is not like two guys in a house pretending to be a financial business.

Source: http://news.ycombinator.com/item?id=578465

You'd be surprised how many companies are like that, especially with so much work being outsourced to other companies. Haribo, the top company for gummi candy, like gummi bears, licorice, cola candy, etc, has an American branch that takes care of the entire north continent, selling to gas stations, Wal-Marts, Targets, candy shoppes, etc. It's run by 9 people (2 accountants, 3 order processors, 1 shipping manager, and the rest are finance and business managers) out of a tiny office. Most of the work is outsourced to shipping companies, outside factories, public warehouses, etc. Regarding bitcoin businesses and other similar start-ups, thanks to a lot of coding, security, and banking being outsourced, there's no longer a need to have a huge IT staff coding your stuff, or personal security auditors.
So, it's about time you got used to dealing with businesses like these, and learn how to figure out which you can trust (which you seem to be doing fairly well already).

Yeah bit-pay is run by 2 guys, so what.  Didn't apple start with 2 guys in a garage or something?  Whats your point here.  Its not like having a huge building and a huge amount of employees makes a company more legit. 

At various times I've pointed out that Mt. Gox isn't registered as a money-transfer firm in Japan, that Global Standard Bank's isn't a bank and pictures of their offices were Photoshopped images of a building in Seattle and a bank interior in Florida, that Dwolla is run out of a hacker space in Iowa, that Bit-Pay is two guys operating out of a house in Orlando, Florida, and that Bruce Wagner has a mortgage-fraud judgement against him in Illinois.

I get comments like "troll" and "hater" for that. The scammers here have supporters, or at least shills.

An exchange company is not responsible for regulating its offerings, investing in stocks/shares is risky, and everyone should do their own research before investing in anything?
THANKS CAPTAIN OBVIOUS!

I don't think GLBSE itself is a scam. It is an interesting setup, and has been running for quite a long time now. Also, Nefario doesn't seem like a scammer to me.

I do think they need some better checking of "companies" trading there, and making sure they hold to their promises and report their information. Otherwise, I won't be likely to ever invest there.

No. A honest ponzi scheme is no longer a deception/fraud and is no longer morally negative, as bitplane said below:


Exactly.

Volenti non fit injuria

If you do something willingly and consciously ergo there is no harm done. If somebody risks his money and he knows what he is doing, then it is his freedom and his problem if he loses the money.

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

The main problem I see is that the market does not trade in "securities". It trades in shares issued by people who are only bound by their own will to behave honestly. There's absolutely nothing stopping a "business owner" to liquidate all assets of the "company" and drop out of sight. There's nothing stopping him from issuing one quintillion extra shares. There's nothing forcing him to pay dividends. There is no obligation to financial disclosure, and any published data is not audited by a trustworthy party. There's no way for shareholders to express their voting rights.

So yes, I think "monopoly money" is closer to what GLBSE actually deals in, as opposed to "securities". Companies both love and hate the stock exchange. They like they can raise capital, but they hate when their are forced to disclose truthful financial details and the price drops as a consequence. CEOs hate when their are ousted by angry stockholders. If you take the hate out of the relationship and leave it entirely voluntary for the company to behave what you get is a way for unscrupulous "investors" to obtain free money from less savvy ones.

For web startups I would fix the system so that the stock market (Web-SE) is the owner of any domain name the business uses, and hosts the database and has access to the source code of the site. Also any financial dealings are conducted via wallets administered by Web-SE. This way the business owner is forced to behave and support the majority decisions, including replacing him as CEO and relegating him to a simple owner of stock issued on Web-SE. The stock holders could also democratically decide to take the company "private" and regain control of it's prime assets, the domain, database, source and wallets from Web-SE, and incorporate in some jurisdiction.

This remember me EVE online

The various investments were never scam, never! Well unless the guy take all the money and disappear.

And here it seems the same.... everyone "omg nono it's not a scam, you idiot", until of course they disappear with the bitcoins...

Lots of FUD in this hit piece.