NSW Non-Delivery of Purchased Bitcoins from Bitxoin

[jamesq]

I write to you as a Director of BITXOIN PTY LTD ('the Company'). You know the Company, via the website bitxoin.com and the related 'buy BTC' businesses. Is with regret that I must inform you BITXOIN PTY LTD has, effectively, ceased trading.

I am a qualified accountant, having joined the Institute of Chartered Accountants Australia (member 46645) in 2003 and, on leaving the professional services industry after resigning from Ernst & Young, gained extensive business experience across a period spanning more than 15 years, Even for financial professionals, advising on a decision to halt an ordinarily profitable business operation is not easy; for a company director, it can be a wrenching experience.

Company directors have certain fiduciary duties, responsibilities and statutory obligations. One key area of director responsibility is to monitor company financial health and not to allow insolvent trading (refer to 'ASIC Regulatory Guide 217: Duty to prevent insolvent trading'). Insolvent trading is illegal and there are serious consequences for directors who allow a company to trade while insolvent, including personal liability, fines and even imprisonment.

As of Monday, 8 July 2014, the website www.bitxoin.com was disabled such as to prevent further orders being placed. The business conducted through this website was the predominate business activity of the Company and this action halted most trading activities, in the times since then, several large volume transactions were pursued, these having the potential to deliver profits sufficient to guarantee solvency. Additionally, we have continued to explore various funding mechanisms in the search for a commercially feasible forward path for the Company. With the likelihood of success in recapitalizing the Company diminishing, the decision to sell the website & related business has just been made.

The consequence of all of this is that incomplete orders, currently unable to be filled, cannot be completed until additional capital is secured, if this is possible.

 

[jamesq]

Dear bitXoin Customer,

As a Director of ROOSEVELT GROUP INTERNATIONAL LIMITED [Hong Kong SAR] ('RGI') and related-entity ROOSEVELT GROUP PTY LTD [Australia] ('RG'), I am writing to you as a follow up to the last email message sent from bitXoin.com. RG is the ultimate parent entity of BITXOIN PTY LTD [Australia] and RGI is the owner of AUREUS PRIME FACTOR LIMITED [Hong Kong SAR]. Aureus Prime Factor ('APF') is established as a cryptocurrency investment manager and business incubator and has just acquired the bitXoin.com business.

RG and RGI have no desire to see their business counterparties suffer financial losses, especially smaller users AND specifically the individual customers of bitXoin.com. Owing to the cease of trading, BITXOIN PTY LTD has left some smaller customers disaffected and because of this, at RG's request, RGI has instructed APF to 'make it up to them'. Following from this, APF will be issuing crypto-securities in the revamped bitXoin.com business to disaffected customers including you. Effectively, this means you will gain equity in the business in the form saleable crypto-securities (which you can sell whenever you choose).

While the details of the crypto-security issuance are still being finalised, I can inform you that the www.counterparty.co distributed exchange platform is to be used. The units issued to you will be in split out to disaffected small customers in proportion to their loss and they will be pegged at a valuation lower than subsequent issues. After your units have been issued, additional units will be offered to all former bitXoin customers and other parties within the RG/RGI contact sphere; this issuance being at a higher valuation than the units issued to disaffected bitXoin customers. A final round of crypto-security issuance will be made with units offered to the larger crypto-currency community via various forums and crypto-crowdfunding portals and this will be priced at a higher valuation again.

To be clear, you will receive units for free. When issued, these units will be saleable. Further units will be issued, in two rounds, to other parties, each at a higher value to the last. This should see you endowed with a cashable asset holding well in excess of your loss. My personal estimate, is that you will see value gain in the order of three to ten times your loss, if you hold through the two subsequent issuances.

More information to follow in within the next week.

Yours very truly,
David Collinson | 1300 7 666 68

 

[John R]

ASIC records indicate that Bitxoin Pty Ltd is still operational and not in external administration, receivership or liquidation.
This means that David COLLINSON is still the company director and responsible for the operation of the business.
In the absence of pursuing claims via Small Claims or Civil and Administrative Tribunals (e.g. NCAT, VCAT, QCAT, etc.), media may be the next step?

Here's the running sheet of unfulfiled Bitxoin transactions ($12,718 + Unknown?):
@Norm - $6,990
@Jezza90 - $2,528
@jamesq - $2,500
@Josh - $700
@Jordansorb - Unknown
@Mateusz Nowak - Unknown

 

[Josh]

I got two emails from david late last night explaining the business has been sold and that the new owners will do their best to pay everyone out involved. He went on about his business history in an attempt to sound credible. Im sure others got the same email

 

[Josh]

Same email as
Above

 

[Norm]

To David Collinson.... Any business is not easy to run and I am very sorry to hear of your misfortune and hopefully you may be able to salvage something out of it. This would have caused great angst for you, if those who got caught up in this can become whole in due course will be a good thing. Whilst I am sure all those that are out of pocket will be glad to hear some positive news, completely cutting off communication and not responding to emails or making any announcements was damaging to you and future dealings, though you obviously have good intentions.
You didn't have to give full disclosure but something, anything would have been a good thing for everybody including bitcoin as each time something like this occurs it certainly damages the currency reputation.
I do feel though that unless you could have completed any transaction within your specified period, then directing people to put funds into your account, when you could not deliver, was not only unwise it would appear an act of deception and dishonesty on the day. Now I'm not saying you are a dishonest person at all, all I am saying is that you should have instructed, I cannot deliver, so therefore do not deposit funds to my account.

 

[Jordansorb]

[Removed by Moderator - Duplicate Post]

 

[DavidC]

This means that David COLLINSON is still the company director and responsible for the operation of the business.
In the absence of pursuing claims... media may be the next step?

In the absence of this very thread, I am almost certain that the Company would not have ended up in the position it is now in.

You see, a little while back, there were a couple of missed orders, one of which was Jeremy. Jeremy was the most vocal agrieved customer we had ever experienced and, as he overstepped the line (by involving the wife of my former business partner) and, because of this, rightly or wrongly, I placed sorting out his order at the end of the "urgent to do list". By the time I had gotten to Jeremys order, he had already filed with NCAT and this left me uncertain of the consequences; even if I filled the order what does an NCA Tribunal know about verification of bitcoin deliveries?
I had noticed a drop off in order volume and asked Jeremy to disclose any forum postings. He said there weren't any but I later discovered this.

In my opinion (and I am very well informed on the issues so you might say 'expert opinion') this thread lead to several large volume orders not being completed (and additional orders not being placed perhaps? ). To be precise, orders for $70,000/week, $108,000, $50,000/week and 134 bitcoin were made or enquired about and none completed. A couple of these would have made the difference needed to guarantee solvency and allow me to continue allowing the Company to trade. Had I been able to keep trading the Company, necessarily, all the orders would have been filled.

If you think "the media" is the next logical step, you miss my point entirely. The 'make it up' proposal is good; very good in fact and done without any legal obligation to do so whatsoever. The best possible thing would be deletion of this thread.

The next best thing would be allow me to continue the work in progress; do not post details here of confidential discussions and communications and, generally speaking, only make posts which are supportive of the project and its end goals, one of which being ensuring that none of the disaffected customers* are out of pocket.
*Note: In that they are all about to become quasi-equity holders in the business, I am supposing they might support pursuing its best interests.

 

[DavidC]

To David Collinson.... Any business is not easy to run and I am very sorry to hear of your misfortune and hopefully you may be able to salvage something out of it. This would have caused great angst for you, if those who got caught up in this can become whole in due course will be a good thing. Whilst I am sure all those that are out of pocket will be glad to hear some positive news, completely cutting off communication and not responding to emails or making any announcements was damaging to you and future dealings, though you obviously have good intentions.

Norm, I had correspondence with your dad Bruce last night.
The counterparty.co units are to be issued shortly though I would like to have a brief outline of the forward business plan in everyone's hands and the second issuance underway prior to the units being traded in open market.

There are a couple of key innovations to the platform that are still being coded and I want to ensure that all of this is properly priced into the market.
Additionally, we want to make the platform like a members bar wherein profits are returned to customers who are also owners and, by inviting friends, you enjoy your bitcoins at a discount or free via return of profits.

I am tempted to say a lot more however will end with: first bitcoin credit card in Australia coming very soon!
And you blokes will all enjoy upside gains from all the hard work that's gone into this.

 

[Norm]

David and all.. I am actually Bruce the one that you corresponded with (Norm is a middle name) acting on behalf of my son as outlined. With 38 years of experience in business circles and conducted a debt recovery business in the past and current 20 years self employed as commercial finance broker plus other business and sales experience, I am open to working with you and looking at what is on offer in order to salvage what is best out of a bad situation "for all affected". One of the errors in this has been a lack of communication, I believe, had a message been left on the end of the 1300 number and mobile plus further email updates it would have helped. In a business such as bitcoins customer confidence is paramount, once lost its a slipper slope down. I would say to all, the suggestion of media contact is "a very bad one at this point" if David is going to do his utmost to assist you becoming whole, lets not get carried away with rash actions and jeopardize your position. The person with legal action pending .. I would advise getting it postponed again, probably not helpful to you in the end. I am happy to act as a conduit for those affected if that's okay ...can look at how this would work to everyone's satisfaction. I am happy to forgo privacy issues and let everybody know who I am and have my contact details, email and mobile whilst maintaining the animosity of those affected. I could email a privacy form for each to sign so I can assist on your behalf, simply as an act of goodwill. You would have to give David permission to give me your email, so I could email a privacy form to him to enable better communication. Biotxoins had the makings of success, something went wrong and as we are now seeing something has been going on behind the scene which could have a positive outcome. , I will be communicating with David and can update when appropriate to do so either direct or on this forum. For confidentiality purposes it will not be recommended, desirable or wanted by all, to have all communication by open forum. Lets see what the week brings and stay positive.