So now suddenly Friedcat is an idiot? Of course he wouldn't do it all at once...
oh, right, so now burnside is an idiot and would ignore magical shares in his account?
I'm still not clear on how Burnside would know they're magical. Isn't Friedcat the one who verifies them?
no, that's what I am trying to tell you. FC handles direct shares. To convert direct shares to an exchange, basically FC puts shares into burnsides name, then sends a message to burnside saying the shares have been transferred. Burnside then enters those shares into his site software and attaches them to the correct username.
For your scheme to work, both burnside and FC have to be in on it (or alternative PT operator).