DrGregMulhauser



Offline



Activity: 330

Merit: 255









Sr. MemberActivity: 330Merit: 255 Re: [BTC-TC] Deprived Mining Speculation (DMS) March 06, 2014, 05:12:58 PM #1743 Quote from: stripykitteh on March 06, 2014, 10:15:18 AM I've posted something on both the litecoin forum and the CIPHERMINE.B1 thread here that Ciphermine should be paying their bondholders (who after all are their creditors) before paying dividends.



Kate's public comments have strongly suggested that she does not understand (or perhaps merely does not want to acknowledge) the fundamentals of capitalising a business, and in particular the seniority of debt over equity. This basic feature of debt financing was thinly papered over at the time the bond scheme was created, so it should not come as a surprise now to find that bond holders have been placed second in line.



One of the many things that mystified me at the time Deprived decided to back these bonds in such a big way was that he and Kate had a public discussion about this, right here on the forum (not going to bother looking it up, but it's out there), and Kate never did address the basic question about the senior claim of bond holders. Given the gaping chasm of elementary financial confusion which appeared to have been embodied in the bonds right from the get-go, I concluded at the time that something must have been hammered out in private between the two of them to address the issue, and since I didn't personally see any value in the bonds as an investment anyway, I didn't bother to follow it up.



If the bonds-that-don't-behave-like-bonds are now coming home to roost, I don't think it would be at all unreasonable to expect a full and complete explanation and a public commitment to observing the fundamental seniority of debt over equity. Kate's public comments have strongly suggested that she does not understand (or perhaps merely does not want to acknowledge) the fundamentals of capitalising a business, and in particular the seniority of debt over equity. This basic feature of debt financing was thinly papered over at the time the bond scheme was created, so it should not come as a surprise now to find that bond holders have been placed second in line.One of the many things that mystified me at the time Deprived decided to back these bonds in such a big way was that he and Kate had a public discussion about this, right here on the forum (not going to bother looking it up, but it's out there), and Kate never did address the basic question about the senior claim of bond holders. Given the gaping chasm of elementary financial confusion which appeared to have been embodied in the bonds right from the get-go, I concluded at the time that something must have been hammered out in private between the two of them to address the issue, and since I didn't personally see any value in the bonds as an investment anyway, I didn't bother to follow it up.If the bonds-that-don't-behave-like-bonds are now coming home to roost, I don't think it would be at all unreasonable to expect a full and complete explanation and a public commitment to observing the fundamental seniority of debt over equity.

BTC Growth Tips: 1GTvfygTCnA5LdE2dX31AtcHho6s6X9H9b

BitThink



Offline



Activity: 882

Merit: 1000









LegendaryActivity: 882Merit: 1000 Re: [BTC-TC] Deprived Mining Speculation (DMS) March 07, 2014, 01:36:23 AM #1744 To my surprise, Kate keeps silent on Deprived and DMS this time. DMS contributed more than 280 BTC to Ciphermine.B1 and she just pretend there's nothing happened. I think she at least should bring out a proposal about how to handle the situation if deprived never shows up.

Bonam



Offline



Activity: 420

Merit: 250







Sr. MemberActivity: 420Merit: 250 Re: [BTC-TC] Deprived Mining Speculation (DMS) March 07, 2014, 10:10:25 PM #1746 So I have about 1000 shares of DMS and haven't checked in on this thread in a while. Is the short of it that the whole thing was basically a scam? Has there been any process initiated to recover any part of the value of investments? Is anyone buying Deprived debt?

BitThink



Offline



Activity: 882

Merit: 1000









LegendaryActivity: 882Merit: 1000 Re: [BTC-TC] Deprived Mining Speculation (DMS) March 08, 2014, 07:33:49 AM #1748 Nice summary.



Your suggestion is great, but I still think to contact Kate and negotiate with her about the bond is relatively easier. In case of death of deprived, most likely that 150 BTC is gone forever anyway.

kellzy



Offline



Activity: 52

Merit: 0







NewbieActivity: 52Merit: 0 Re: [BTC-TC] Deprived Mining Speculation (DMS) March 08, 2014, 01:55:28 PM #1750 :??



I do not know what is more shocking - Me just reading through the last 30 pages for an hour or what has happened here to the investors.

This Kate woman seems to hold the key to unlock the puzzle.



Deprived



Offline



Activity: 532

Merit: 500







Hero MemberActivity: 532Merit: 500 Re: [BTC-TC] Deprived Mining Speculation (DMS) March 13, 2014, 02:43:58 PM #1754 OK guys, I'm not dead - and am back active. Unfortunately will be away again from later today until late tomorrow but will make a start on sorting this mess out on the weekend. As far as assets are concerned, the BTC I hold for the fund remain intact and untouched - as anyone can verify from the address.



Not sure what's happening with Ciphermine.B1 - but if Kate's paying dividends to Ciphermine then it looks like it may be a scam. I say that because common-sense suggests Ciphermine is making a huge loss (its liabilities - denominated in BTC - are rising far faster than it can conceivably be mining coins). If she's pretending its making a profit and paying dividends, hence increasing the extent to which it has negative equity, then that is defrauding bold-honders (paying dividends to equity holders when unable to service debt is basically fraud/theft). The conflict of interest I referred to previously (in respect of me becoming invovled in her exchange) was basically that point - that it would be unwise for me to increase financial links with her with the likelihood of me having to initiate civil and/or criminal proceedings against her in respect of the bonds.



I'll give a more detailed update on the weekend and try to get the dividend calculation done in full by then - then decide how to proceed with the fund going forward. After this week I don't expect any lengthy absences until at least May.



It'll take a bit longer to sort out relisting - as I'm now totally out of the loop on which exchanges are functional/trustworthy etc.



If anyone incurred costs taking legal advice in respect of my absence then please PM me and I'll look at reimbursing it (copies of invoices would be required).

Rannasha



Offline



Activity: 728

Merit: 500







Hero MemberActivity: 728Merit: 500 Re: [BTC-TC] Deprived Mining Speculation (DMS) March 13, 2014, 02:49:53 PM #1755



More frequent updates would be appreciated in the future



edit: With reference to CipherBond, I would suggest requesting the DMS-bonds to be bought back. It may cost 3 months of dividends, but since these are computed in EUR and the BTC/EUR rate has risen considerably since the inception of CipherBond, they don't amount to that much. And with the bonds sold back, a clean closure of the fund is an option if there is no reliable relisting location. And if the fund carries on, at least it won't do so with the burden of CipherBonds. Welcome back ^^More frequent updates would be appreciated in the futureedit: With reference to CipherBond, I would suggest requesting the DMS-bonds to be bought back. It may cost 3 months of dividends, but since these are computed in EUR and the BTC/EUR rate has risen considerably since the inception of CipherBond, they don't amount to that much. And with the bonds sold back, a clean closure of the fund is an option if there is no reliable relisting location. And if the fund carries on, at least it won't do so with the burden of CipherBonds.

woodrake



Offline



Activity: 153

Merit: 100









Full MemberActivity: 153Merit: 100 Re: [BTC-TC] Deprived Mining Speculation (DMS) March 13, 2014, 03:59:53 PM

Last edit: March 13, 2014, 04:31:49 PM by woodrake #1758 Quote from: Deprived on March 13, 2014, 02:43:58 PM Not sure what's happening with Ciphermine.B1 - but if Kate's paying dividends to Ciphermine then it looks like it may be a scam. I say that because common-sense suggests Ciphermine is making a huge loss (its liabilities - denominated in BTC - are rising far faster than it can conceivably be mining coins). If she's pretending its making a profit and paying dividends, hence increasing the extent to which it has negative equity, then that is defrauding bold-honders (paying dividends to equity holders when unable to service debt is basically fraud/theft). The conflict of interest I referred to previously (in respect of me becoming invovled in her exchange) was basically that point - that it would be unwise for me to increase financial links with her with the likelihood of me having to initiate civil and/or criminal proceedings against her in respect of the bonds.



As I have stated multiple times in the past, we cannot pay the CIPHERMINE.B1 dividends because the size of the smallest dividend (ie. one one hundred thousandth of EUR 340 in BTC), even with the amassed amount over the last few months, is below the minimum transaction limit. A quote from CIPHERMINE.B1's thread:



Quote



For the time being please consider CIPHEMINE.B1 to be frozen. However, the dividends will still be paid and are being sequestered safely. They are still calculated based on the 30 day weighted moving average price (ie. you get more when BTC is rising, as it generally has been in recent months). I do have a conundrum now though in terms of how to keep the dividends now that I've simplified our approach re. CIPHERMINE divi calcs (ie. the BitStamp account gets completely emptied). Currently the CIPHERMINE.B1 divis are BTC in a cold wallet, which has been good for investors thus far but I understand that increases your risk.



I cannot do anything else right now, but CipherTrade is poised to launch after many delays so it will get resolved soon I promise.



However, should you wish to give us 3 months notice to redeem the bonds then please email

Apologies for both my absence (I have been very unwell) and for the lack of dividends. Unfortunately the siutation has not changed since I last updated you about it; the smallest dividend payment is still below the "dust" level / minimum transaction size level for the bitcoin network, and I therefore cannot send an aggregated payment. We have many single bondholders and even with an aggregated balance of several BTC now, one hundred thousandth of a few BTC is below the minimum transaction size which will be accepted by the network. This will not be a problem once they are on CipherTrade, but for the time being we're a bit scuppered.For the time being please consider CIPHEMINE.B1 to be frozen. However, the dividends will still be paid and are being sequestered safely. They are still calculated based on the 30 day weighted moving average price (ie. you get more when BTC is rising, as it generally has been in recent months). I do have a conundrum now though in terms of how to keep the dividends now that I've simplified our approach re. CIPHERMINE divi calcs (ie. the BitStamp account gets completely emptied). Currently the CIPHERMINE.B1 divis are BTC in a cold wallet, which has been good for investors thus far but I understand that increases your risk.I cannot do anything else right now, but CipherTrade is poised to launch after many delays so it will get resolved soon I promise.However, should you wish to give us 3 months notice to redeem the bonds then please email bonds@ciphermine.com . The email must come from the email address associated with your old BTC-TC account. We will then send you a unique code to verify you do have possession of the account. Redemptions will only be made to the public withdrawal address associated with your BTC-TC account.

However, given DMS's large stake in CIPHERMINE.B1 and given that you've now reappeared, Deprived, I am willing to process those dividends manually. This offer is not extended to any other bondholders, sorry (there are too many). Also, if you'd actually been around and answering emails sooner D I'd have offered this to you directly sooner as well, but your email account appeared to be a black hole so I didn't bother.



Deprived, it is good to have you back, but frankly I'm astonished that someone of your caliber would cast such aspersions without checking the facts!



Further, CIPHERMINE.B1 and CIPHERMINE dividends are quite separate. We are making a profit under CIPHERMINE since that is based on what we mine, not what our outstanding liabilities are on our balance sheet! The only P&L cost associated with the bonds are the interest payments, which have been deducted from mining profits and, as mentioned above, have been safely sequestered away until such a time as we can pay them out.



Kate.



PS. For your convenience I've uploaded a PDF of the BTC-TC "contract" page for CIPHERMINE.B1, As I have stated multiple times in the past, we cannot pay the CIPHERMINE.B1 dividends because the size of the smallest dividend (ie. one one hundred thousandth of EUR 340 in BTC), even with the amassed amount over the last few months, is below the minimum transaction limit. A quote from CIPHERMINE.B1's thread:However, given DMS's large stake in CIPHERMINE.B1 and given that you've now reappeared, Deprived, I am willing to process those dividends manually. This offer isextended to any other bondholders, sorry (there are too many). Also, if you'd actually been around and answering emails sooner D I'd have offered this to you directly sooner as well, but your email account appeared to be a black hole so I didn't bother.Deprived, it is good to have you back, but frankly I'm astonished that someone of your caliber would cast such aspersions without checking the facts!Further, CIPHERMINE.B1 and CIPHERMINE dividends are quite separate. We are making a profit under CIPHERMINE since that is based on what we mine, not what our outstanding liabilities are on our balance sheet! The only P&L cost associated with the bonds are the interest payments, which have been deducted from mining profits and, as mentioned above, have been safely sequestered away until such a time as we can pay them out.Kate.PS. For your convenience I've uploaded a PDF of the BTC-TC "contract" page for CIPHERMINE.B1, here . Unfortunately I did not forsee the possibility of the exchange failing/closing combined with this bloody minimum transaction limit getting in the way. In the circumstances we're doing the best we can (ie. building a new exchange so that your securities will be liquid again!). The entirety of the funds were spent on mining hardware, as planned. Kate Craig-Wood | The Silicon Queen

CipherMine | Futurism | Blog

ID verification | Pub key | The Silicon Queen