There's a few things that have come to my attention recently, that I think are important to this whole issue.
Patrick, can you please expose what you previously thought to be pirate's business model? If not, why not?
Given he's not surfacing or communicating, I don't see why not. This may not be the actual model used but is is one way to do it - it exploits an inefficiency between two markets and indulges in market manipulation along the way. I would think a year at 3%/week would be easier, but it would become unweildy to do it for much longer than that (again, it's an opinion).
Mr X wants a 10% return on a USD investment, but banks pay near zero.
Mr Z can provide him that return and gets a $500k deposit.
Mr Z buys bitcoins at $5 each. Because bitcoins is small, Mr Z can corner and squeeze the market - preventing big price swings, selling high and buying low.
Mr Z does this with bitcoins that he has obtained from bitcoin users - he pays them interest. Over six months, Mr Z has moved the price to $11, sells 50k to return $550k to Mr X
Mr Z has happy customers, and made some money along the way.
The plus of this is that the price of bitcoins generally increases. The down side is that the market is controlled and there is much less free-will or competitive force at work. The phrase "you've been played" springs to mind. Interestingly, this process also allows (within reason) a forecast future trading range (increasing). The bubble over $13 probably hurt BS&T along with the reduced liquidity from the August withdrawal spree. Having watched this over the past year, it was clear a lot of trading was not occurring through Gox and there are lots of good reasons for that.
Why can't he unwind it all quickly/smoothly? Not sure, but then I would have run it differently.
And on a competitive note, since BS&T closed shop, I have processed around 8000 BTC of withdrawals for Starfish customers.
Apparently the secret "business plan" that a few people mentioned they knew from close dealings with pirate was a total load of shit. There really never was a legitimate business, we've been flat out had. What is probably most likely is that he used the profits he shaved from pool hopping with gpumax to keep his ponzi floating long enough to make it believable, before re-opening the business to the general public.
If the info I've seen on gpumax is accurate, then he and his silent business partners have known about this from the beginning, and have never intended to pay anything significant back. If this is true, then giving them the benefit of the doubt by pushing for a civil settlement is playing to their favor and not ours. Not only do we have basically no chance of getting anything back, but we would have to pay a significant sum just to see him in court (assuming he doesn't run to Brazil or somewhere we can't touch him, then we'd pay for absolutely nothing).
In short, messing with Trendon's family is probably the least useful option. He and his business partners should be our direct targets, and chances are we're better off going immediately for criminal charges in order that things proceed as quickly as possible, and to minimize any further losses on our part. Consider every day that we wait to throw him in jail to be hookers and blow.
