Joel's arguments are really dumb. Patrick was acting as a bank. Charging higher interests for loans vs paying deposits, with the assumptions that the difference would more than make up for defaults in the loans with a little profit left for him. The fact that Patrick loaned out money to people who were investing in pirate is not anyone else's fault but Patrick's, he should have either been more careful with who he was loaning to or charged a higher interest rate. You don't expect your bank to pay you half of your usual percentage rate on a CD or savings account because more people foreclosed on their homes than the bank suspected?
Joel, your arguments are absurd. If a seller agrees to sell 5000 pounds of cherries, but only delivers 4500 pounds, that is on him. He either needs to make things right by delivering an additional 500 pounds, or renegotiate the contract (i.e., agree with the buyer to only sell 4500 pounds at a lower total price).
The contract in question with Patrick wasn't an agreement about "what to do with X number of bitcoins", it was an agreement whereby the buyer would give Patrick a particular number of bitcoins, and Patrick would "deliver" 1% per week back to the buyer, plus the principle at a certain date. Just like an agreement where a seller agrees to deliver a particular number of pounds of cherries to the buyer. It wasn't contingent upon whether Patrick's investments panned out or not. If it did, the contract would have stated as much. NOWHERE does Patrick and the other party agree that, if Patrick's investments default, then Patrick can default without giving his investors recourse.
Anyway, I'm done debating about this - we're just rehashing the same thing over and over. I'll just say that your arguments are fairly silly, and would not hold up in any court of law.