Membership in a DRS is mandatory for FSPs who provide a service to retail clients, because it provides consumers with an avenue for redress when a dispute arises with their financial service provider. Membership in a scheme is a pre-requisite for registration as an FSP.
Why did Bitcoinica LP not sign up with a Dispute Resolution Scheme?
FSPs who are unsure as to whether they need to join a dispute resolution scheme should seek legal advice.
Did Bitcoinica seek legal advice in this matter, if so what was the outcome?
I haven't done much research, but to my best knowledge, DRS only applies to NZ residents.
Over 99% of Bitcoinica customers are not NZ residents so they are not classified as "retail clients". I believe that the company had plans to amend the Terms of Service to mention the illegibility of NZ non-accredited/non-institutional investors for Bitcoinica service.