Re: [Payout Updates] Bitcoinica site is taken offline for security investigation

Edit: To be clear, I'm not defending that practice, I'm simply pointing out that it doesn't seem to be uncommon and it's apparently enforceable.

diagnosis: nonsense
treatment: contract law 101

Then I'm at a loss for why bitcoinica didn't go after Linode? I'm sincerely asking here, I don't know much about contract law. Was it perhaps because the entirety of that theft was in bitcoins and bitcoins aren't recognized as having any value (I don't know how that would be the case)?

Bitcoinica got $350k stolen from them in 2 different hacks and they didn't report it to the police. What are you expecting? Miracles?
Add to it that those thefts, even without the theft of the bitcoins, would be a crime of computer intrusion and it's even more surprising that none of them were reported to any authority.

If they had been reported, do you think that Linode could have been held responsible for the value lost despite that their ToS states that they aren't?

I bet the PR nightmare would make them reach a deal and pay long before it went to trial.

There didn't seem to be too much of a PR problem for them and the story was accurately reported on a bunch of widely read websites (e.g. Arstechnica). IIRC, Linode explicitly admitted it was their system that was compromised because of the way they had their customer service portal configured.