Quote from: defxor on April 25, 2013, 05:07:08 PM

Tihan has met Zhou. Gavin has met Tihan. That much has been known since the Bitcoinica fiasco.

That does not change the fact that the explanation that fits all known facts and requires no leaps of faith (or unicorns) when it comes to who made off with Bitcoinica's money, times two - maybe three, is Zhou and Zhou alone.

Quoting a post from way back:

Quote from: defxor on July 30, 2012, 02:40:33 PM

Quote from: zhoutong on July 30, 2012, 02:54:59 AM

This tells a lot about your attitude. I hope it is a hindsight and you didn't assume Bitcoinica to be a scammer's product when it was launched.

tl;dr: The road to hell is paved with good intentions.

I'm quite sure you launched Bitcoinica with the intention for it to provide value to the community. As initially suggested by Patrick/Intersango and others, your claims about trade volume were very suspicious. It's likely you simply exaggerated them, not unusual when being proud of what you've created.

Whether the Linode theft (where other accounts as well were swiped) just provided an excuse for some profit on the side or not I don't know, but I'm quite sure the only real money to have come out of running Bitcoinica were from user deposits. I have no personal opinion of whether it operated as a pure bucket shop or not, but others have documented the lack of visible MtGox movement even when Bitcoinica should've been hedging.

When, based on how you presented the success of Bitcoinica in public, you were approached with investment offers I believe you were simply unable to admit that it wasn't as successful as you claimed. I believe you went along way too far with whatever happened, and that the Rackspace "hack" was the simplest way out when Tihan started questioning the books. Additionally, it provided yet more profit which you might've needed to be able to keep up appearances with your friends and family.

After the very visible and complete failure by the Intersango people to handle the resulting mess I believe you made yet another profitable "hack" on the service. It wasn't as well planned nor executed as the previous, maybe it was simply opportunistic after having realized the release of the source code provided the excuse needed.

I've posted links to http://en.wikipedia.org/wiki/Pseudologia_fantastica and http://en.wikipedia.org/wiki/Cognitive_dissonance since I do believe they apply. I think you're currently unable to admit to yourself and people close to you where things went wrong, and you're still hoping to be able to exit this unscathed.

(I consider the above to be the simplest explanation possible that still fits all the known facts. I'm wary about the exact involvement by Amir, Patrick and Donald though - and since Tihan and Zhou supposedly have met in person it would be interesting to know exactly whom else have actually met either of them.*)

But then, the only reason I really care is that if people's only takeaway from having joined the Bitcoin community is that they get constantly scammed this will never fly. I thus believe Bitcoin fraud needs to be handled by the proper legal authorities. We're way past Mybitcoin's "as long as I give 49% back you guys won't hurt me, right?" - which btw looks suspiciously close to what you're currently trying to do as well.

*) Edit: Tihan's identity is verified by an upstanding member of the community, and thus Zhou's should be as well.

For those who don't remember, chat logs were posted where Tihan was questioning why the business they bought didn't make the money Zhou had claimed it did. That provides much of the rationale for what then happened.

Additionally, we know from Zhou's own posts that Zhou was allowed to retain all profits from Bitcoinica for several months after it was acquired by Wendon. He was then paid between $8000 and $10,000 per month to run Bitcoinica prior to the Intersango guys coming on board (Bitcoinica was already "leaking equity" during this time).

From documents made public by Amir, we know that following the Intersango guys coming onboard, Tihan asked Zhou not to take any further payments from Bitcoinica until the financial clusterfuck was sorted out - the Intersango guys had already agreed that they would take no payments at that time.

The Intersango guys coming onboard had a significant impact on Zhou's status within the organisation as well as the financial benefits he received from Bitcoinica.

Let's also remember that Zhou posted about changes made to the LastPass account after he'd resigned as an employee - changes he knew about because he'd tried to access it.

Zhou never played well with the Intersango guys and in my opinion he undermined them at every opportunity. Whether he believed that if enough things went wrong he'd be put back in charge or whether he preferred to see Bitcoinica destroyed rather than under the control of others is debatable, but Zhou's ego played an enormous part in the downfall of Bitcoinica.

It's kind of horrifying that if AurumXchange had not made public the connection between the MtGox intrusion and Zhou's accounts, people would be unaware of it to this day and there may have been no recovery of any funds from that intrusion. Recovery or not, it still stinks to high heaven that there's been no criminal investigation of that event. When that connection was established, all of the Bitcoinica hacks should have been made the subject of a criminal investigation. That Zhou actually asked people not to involve the police because it might affect the likelihood of DImmi approving his application just confirms the extent to which he acts out of self-interest.

Zhou has the self-centred teenager view that it doesn't really matter what happened because most of the funds from the MtGox intrusion were recovered. It does matter, though, because the lion's share of the blame for the failure of Bitcoinica is being placed on others and the MtGox intrusion was what made a difficult situation irretrievable.