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Krtek.net Mail - A Public Letter about Bitcoinica

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Lukáš Nový <krtek@krtek.net>

A Public Letter about Bitcoinica
1 message
Zhou Tong <bitcoinica@zhoutong.com>
Reply-To: bitcoinica@zhoutong.com
To: "bitcoinica@krtek.net" <bitcoinica@krtek.net>

Fri, Aug 3, 2012 at 4:38 PM

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A Public Letter about Bitcoinica
Why?
You are receiving this email because I, Zhou Tong, want to update you about Bitcoinica's recent
events, and clarify some frequently asked questions by Bitcoinica customers.
I still have your email address because Bitcoinica shared the available account information with
me so that I can help them process the claims. I won't use your email address for purposes other
than communicating Bitcoinica-related matters.

Apology
First all, I would like to apologize to all affected users. As many of you know, I'm reaching 18 years
old this year, and even though the Bitcoinica venture was extremely exciting and eye-opening for
a teenager, I have to admit that I could have displayed a higher level of maturity and
professionalism in some matters.
Also, I also have to admit that a lot of the business circumstances were well beyond my scope of
understanding. I assure you that I have learned the relevant lessons and I will do a much better
job in my next project — NameTerrific.

The "Mt. Gox Hack"
Bitcoinica experienced the third major hack on July 12, 2012. According to Bitcoinica's
announcement, 40,000 BTC and $40,000 were stolen.
It's regrettable that the master password of Bitcoinica's LastPass account, which includes the
crentials required to access its main Mt. Gox account with all unpaid funds, was found to be the

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same as one API key in the source code leaked on July 7, 2012.
On July 26, AurumXchange has posted a statement publicly stating some information found in
the recent Bitcoinica hack. I was pointed to be an important suspect due to a link of this hack to
one of my "sockpuppet" email addresses used for anonymously testing websites. After a short
period, I have replied to emphasize this fact and also a possible email hack.
It's important to note that I have never used this email for any official purpose, and it should not be
used to identify me personally. The email password was a heavily re-used one because nothing
inside was intended to be private.
On the same day, I have posted another statement about my findings of the evidence left in the
email account. Chen Jianhai has used a credit card of Chris Heaslip (which was also present in
the LastPass account) to place an order on Amazon.com. He was using a freight forwarder
address with his real name. Later this order was canceled by Amazon due to fraud.
Chen Jianhai has agreed to return at least $140,000 and 20,000 BTC under the condition that
Bitcoinica LP will not start a police investigation about the hack. I have made it clear to him that I
will have zero tolerance on this wrong-doing and if the promised amount is not paid back, I will
make his identifiable information available to the police, and possibly public.

Fund Recovery
Patrick Murck is an experienced lawyer who is also very familiar with Bitcoin. He was asked by
some creditors and stakeholders of Bitcoinica to broker the transactions. I was supposed to be act
as an intermediary between the hacker and Patrick Murck to faciliate the recovery of stolen funds.
A great progress has been achieved in fund recovery and we can expect the funds to be returned
to Bitcoinica LP, or its creditors as soon as the end of next week.

Liquidation
Tihan Seale, who represents Wendon Group (the limited partner of Bitcoinica LP), released a
statement on August 2, 2012 detailing the abandonment of legal duty by Bitcoinica Consultancy,
the general partner of Bitcoinica LP.
Mr Seale has confirmed that his investment firm will appoint a legal receiver in New Zealand to
return all remaining assets owned by Bitcoinica to creditors, which include all customers with an
account balance and/or a position and a verifiable claim. He has also mentioned that all assets
subject to Wendon Group's ownership will be contributed to Bitcoinica customers proportionally.
To my best knowledge, Patrick, Donald or Amir has not responded to the above-mentioned
statement publicly.

My Personal Appeal
Here, I would like to appeal to the community and all Bitcoinica customers for acting rationally

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about recent events.
With the accusations from some active parties in Bitcoin community, I have lost a lot of confidence
in myself and my life has been significantly and negatively impacted. I'm an Agnostic and a
Libertarian who believes in living one's life for others' good, and the accusations are clearly
against my value judgement.
Furthermore, there are repeated threats of violence and informal investigations that can put my
family, friends and myself into dangerous situations.
Regardless of your stand in the debates, I appreciate your respect. Whether I'm guilty or not, I
have closely experienced the power of justice and I can assure you I will hate living a life of a
criminal. I deeply believe that I can make good use of my web development skills and business
experience into valuable innovations for the society, rather than illegally obtaining properties from
other hardworking people.

My Bitcoinica Experience
In my previous post about leaving Bitcoin, I mentioned that I didn't really enjoy the outcome of
Bitcoinica:
"I failed at one thing though, that is generating value for the society. Bitcoinica did create a place
for people to trade more efficiently and provide liquidity to the market. However, speculation is a
zero-sum game (or negative-sum, strictly saying). I know there can be many justifications for
Bitcoinica's value, but all of them are against my intuition and values."
I want to make it clear (again) that I stand in line with the interest of Bitcoinica customers because
you have made me proud of my creation. Without your support, I wouldn't have moved to
Melbourne, and I wouldn't have been so confident about my potential. To me, like it or not,
Bitcoinica was a life-changer, and very possibly an opportunity that I would never encounter again
in my whole life.
My first major aim in life is to become a millionaire (in US Dollar) by the age of 21. I set this aim
when I was 15. Here, I also want to thank Tihan for his wonderful acquisition offer, which
contributed to the achievement of this aim (though I still have a lot to go).
Moreover, I have interacted to many Bitcoinica customers personally and I have to say that there's
no better way of accumulating business experience. I'm lucky to have known so many
high-net-worth individuals in this community and I believe that many of the Bitcoinica customers
will be helpful in some ways in my future adventures.

Last Words
So, I have:
lost my job
seen my own baby fail
been stuck in a situation beyond my control

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been accused of stealing customer funds
contributed most of my Bitcoin savings into personally compensating customers
thought about committing suicide
never had a satisfied sleep since 3 months ago
lost some confidence
felt insecure and nervous for prolonged periods
affected some friendships
delayed the development of my new project significantly
spent a large amount of time in the 200-page debates
skipped a few classes
ruined my professional reputation in some ways
I'm still surviving after all. There's always hope in life, right?
In these three months, I have learned a lot, and experienced all kinds of human emotions,
thoughts and value judgements. In one occasion, I cried over the phone, and my best friend (a
18-year-old student) told me (translated):
"You're already very successful. Not many people can have your experience as a youth
entrepreneur, and be such a mature expatriate and global citizen. The reputation damage will at
worst make your future successes arrive later, but they will still come to you, because you deserve
the successes."
I won't give up. I'm not running away. I'm still here to help you get your precious savings back. I
know how important the money stuck in Bitcoinica is to you. It truly means a lot to me.
Meanwhile, I appreciate your support towards my new startup NameTerrific.
Thank you very much for your support. I hope we can all survive this difficult period
together. You are welcome to contact me anytime at bitcoinica@zhoutong.com.

Best Regards,
Zhou Tong
Founder of Bitcoinica (Yeah, I hate to be the founder.)

You're receiving this because your email is included in my copy of
email addresses shared by Bitcoinica's owners.
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14.2.2014 21:12

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