 Today's episode of the Bitcoin Show is brought to you by USGoldCoins.com, 1-800-HOTCOIN, and MEZEGRILL, MEZEGRILL.COM, and TREADHILL.COM, and MTGOX.COM. Hello everybody and welcome to the Bitcoin Show. This is episode 28. I am Bruce Wagner, as you know. And this is Manny Manor. And today, we have breaking news in the Bitcoin world. You know, as always, we're bringing it to you as it happens live, so we're doing a special edition at whatever it is, 7 p.m. Eastern Time tonight. With us, we have the gang from TREADHILL, Jared Kenna, and Jared, you want to introduce your cohorts there? Yeah, we've got Adam Stradling and Francisco Dagnino. Okay. Dagnino. Dagnino. Okay. So tell us, guys, tell us what's happening. Okay. Basically, by doing our own internal audits, we've found out that Dwalla is reversible, and not only is it reversible, they don't tell you. So essentially, over time, our statements have been changing, and we wrote a program actually. Did you write that or Mike? Both of us. Okay. So together, they wrote a program that basically parsed over time all of our Dwalla statements and detects anomalies and changes in the statements. So we found out that Dwalla is basically secretly taken back $37,000 out of our accounts, which is users that made a transfer, and it was showing credit in our system, and then Dwalla, without telling us, just pulls the money back. So we asked Dwalla, are there charged backs? They said no. We said, are they reversible? They said no. So we asked them about this, and they basically ignored us and just blew us off. So we approached them two weeks ago when we first started seeing this. Initially we just thought, hey, this is our fault. We're screwing something up here. So we dug a little deeper, and we spent a lot of time thinking it was our mistake because if you audit based on their spreadsheets and their data, which continuously changes, it makes it look like you had a mistake. So basically we tracked their data over time, and I found out it's actually on their end. So at this point, we've been in touch with them, and they told us, and we have this, we have documentation from them that says, if you receive an email from us saying it's credited, if you receive a CSV from us, it's credited. So we've been treating it as such and selling bitcoins to people. Now after we implemented this system, we caught $27,000 worth of fraud and prevented it. We've stopped people from doing this. People were doing it on purpose. People have realized that there's a flawed Duvalis system and that they can take back the transactions via ACH, and they're specifically trying to gain the system. And we have evidence from speaking to these scammers or trying to speak to them because once we figured out how they were doing it, we started blocking them and telling them they had to go on phone calls with us if they wanted us to approve their transactions. All of them declined, came up with horrible excuses, and then pulled back to transactions. And these transactions went from credited, which means we're supposed to go ahead and put the money in our accounts back to pending. And anybody who's automated it off of the wall right now has been dealing with the same thing for the last two months. Because otherwise you have to go through manually on every single one. And people might have been wondering why things have been taken longer and trade held. Well, that's why over the last two and a half weeks, we've been looking at every single Duvala transaction. We've created watch list of these specific types of fraud that we see. And then all our guys are using the watch list of the transactions that we see to be suspicious because we identified this, and then we're blocking them. Okay? And we didn't come out right away because we weren't shared with them. So we wait and saw and collected information, caught some of these scammers today. And we actually asked Wallop over the last two weeks about specific transactions to give us data. They've given us the run around every single time. Exactly. We've tried to work with Duvala, and we've tried to cooperate with them. We've sent them emails, we've called them, and they just ignored us the entire time. We are, obviously, their second largest customer. Their largest customer is Mt. Gox. Between us and Mt. Gox, I would estimate we're 90-something percent of their volume, and they are willing to ignore us, I guess. Yeah. And over two weeks, we sent a specific transaction ID's, and they just said, go to the statements. Go to the statements. Whatever's on the HTML is what you get. Well, those change over time. And we're not even talking about what goes from pending to credited back to pending. We're just saying transactions completely disappear from our June statement. Right. Okay? That's a completely different error. So we've identified at least three different types of errors that are occurring. Two or three of them are fraud. The people are perpetrating. The other two or three are just, we don't even know. We don't even know how they're happening. Exactly. Two transactions are coming and going, coming and going. Let me just reiterate, I mean, give a little executive summary, first of all, because there's a lot of information here. So tell me if I phrase this correctly, that what is happening, what you're saying is happening is that Duwala is processing transactions into Trade Hill and probably other merchants like Mt. Gox and so on. And then they give you a statement saying these transactions are pending, and then these transactions have cleared. And then what's happening is these statements are online in the form of a CSV file, and then they are actually retroactively changing the data on these reports. So the transactions that have said they were cleared are now suddenly not cleared anymore. They're pending again. Exactly. It's normal to go from pending to credited. It's not normal to go from credited to pending. Yeah. Right. And that's what you're doing. Yeah. And have you received any communication from Duwala stating, hey, you know, there's a discrepancy here. Let's try to get into some form of arbitration or anything of that nature. Not once, except for 10 minutes ago, when we after we escalated this over the last four days and said, we need to speak to the CEO immediately. They never turn a call and called four or five times. We send them the data again, explain exactly what's happening. And then we said, we're going public with this in five minutes. I get an email from Cherise, the COO saying, OK, we can speak, right? So two weeks, we got to Cold Shoulder. And then five minutes before we go public, we say we can speak. And if you'll notice, they also changed the stuff on their website for new information. Like several hours ago, several hours ago, they just announced that it's reversible. Yeah. OK. So let me just play for the audience. I mean, there's a lot going on here. Oh, by the way, so one of the things that we learned is that what is it the estimates of the percentage of Duwala's business that are coming from Mt. Rocks and the percentage that are coming from Trade Hill right now? Do we have a guesstimate? In a thread just recently about Duwala, Mark stated that he did over 6 million transactions in June. We did over 1 million transactions in June. And we see the fraud increasing, OK? And we had about a 35,000 loss in June with a million of transactions, right, in terms of the situation we saw with the takebacks. So if you multiply that by six or seven times on 30,000 and given that people saw we were blocking this, OK, then you're talking a couple hundred thousand could be guesstimate. Anybody else using Duwala, you've got to think 3% or 4% or 5% of their total volume right now. 3% or 4% or 5% of their total volume could be being reversed, like magically unclear. Right. Or it could be even worse if they've realized that they can get away with it and it's completely automated. I mean, it's a decent chunk with us. And we're catching it. And we're stopping. We're stopping. Now, if he is catching it and he's stopping it, I want to know why the hell he didn't tell me. Oh, you're talking about Malgox. So we don't know if he's even aware of this yet or if he's catching it or stopping it. We know that Malgox has an automated system to process their Duwala. Now, if Malgox is using an automated script that processes these Duwalas that are coming in, it's not going to go back and retroactively check most likely. And even if it did, what is he going to take the money back away that's been spent on Bitcoins? What are you going to do? Yeah. No, I think he doesn't know. And I can't blame him for that because this is absolutely crazy. This isn't something you expect from a reputable. It's like a bank, a trusted institution that clears a check and once it's cleared and then later you don't find out unless you notice that the online statement changed before your very eyes. Exactly. And they didn't notify you. They didn't notify you of anything. Yeah, it seems like what's happening here is that maybe, yes, ACHs are reversible, but the biggest problem is that A, they're not notifying people I trade on, B, they're retroactively changing statements, I think the biggest thing is that they're telling people that they're not reversible. When I opened my Duwala account, they called me the very next day and they said that they're welcome to Duwala and all that. And I asked them a lot of questions and one of the things I asked them were, are these transactions reversible? I mean, after they clear, can they be reversed? And he said, no, absolutely not. So let's just take a break for a second. I want to play a little bit of an excerpt of a conference call that you guys made actually. The first one is to Duwala just a few, well, what was it, an hour or something before this broadcast. So let's play that and listen in. Oh, wait a minute, wait a minute. All right, can you leave me on the line and speak for us, Ben? Is Ben milling me in too? Okay, I can continue to do a little talk. Okay, thank you, just one moment, I'll take you. Okay, great. Thank you, Ben. Did it play? Okay, you heard it, okay, cool. So that's what happened, we couldn't get through and the CEO wasn't available and the COO wasn't available and this is a small little startup that has 12 people. I mean, I can imagine they're probably in a room at the size of this set. I just don't understand why they're absolutely inaccessible. All right, then all of this came to light and you guys decided to come out with this publicly and right before we sat down to go on the air, I called again, I just called anonymously, I didn't say my name or anything, but I called and I asked one simple question. Can, as a merchant, if I accept Duwala, can transactions be reversed? And let's listen to this conversation real quick. This is when, just a few moments before we sat down. Hello, this is Ben Mordor with Duwala, can I help you? Yeah, I just have a question. Can Duwala, if I accept Duwala as a merchant, can transactions be reversed or charge backs? Okay. Nope, nope, unless the bank reports back that the insufficient funds, transactions are not, reversed, there's a dispute process that someone can file, but if that were the case, you would definitely be notified of any dispute that is filed to be able to present your site as well. Yeah, the only event that that would happen is if the bank reported that there was insufficient funds. Okay, so as long as the bank doesn't report insufficient funds, then the transactions cannot be charged back? Correct, sir. Okay, and what is it, we were talking about a dispute, what is that about? Yep, if whoever sent the funds wants to file a claim saying that maybe they didn't receive the visible, I guess, whether it's a service or a product, and they want to file the claim that they didn't receive, then they felt that they've been cheated out of their part of the transaction, they're able to file a dispute, and then that's perpetrated on our end in which both parties can send in receipts and different kinds of documentation that helps discern kind of what the outcome is, and that both parties are notified and given time to provide evidence, I suppose, towards both parties. Right, but what's the purpose of that? If a transaction clears, can it be reversed? Can it be? If the dispute is filed, and then it's found that the sender was in the right, in that case, it can be. But that's done so through a process of both parties acknowledging. Okay, so there is a charge back then. Transactions are reversed in certain cases then, depending on your own, Dualla's own arbitration of a dispute process, is that what you're saying? I believe so, this is what the dispute process has. Okay, because when I first called, I said, can transactions be reversed after they're clear? And you said, no. But now you're saying the exact opposite. No, sorry, I should have clarified that I meant no in case there was a, unless there was a dispute or the banks have filed that there was a mistake on the transaction or insufficient funds. Okay, yeah, yeah, because now you're saying like way the opposite. Because what I said was, can transactions be reversed? And you said, no. And then later you said, not unless the bank reports insufficient funds. And now you're saying, not unless the bank reports non-sufficient funds or the bank disputes it or the sender disputes it or what, what else? I mean, it sounds like there's a lot of possible ways that a transaction could be reversed after it's cleared. Even though when I asked you, can transactions be reversed after they're cleared? You said no. Sorry, I meant to go on and inform you of the other methods where that would not be the case. So you meant to say, yes, absolutely in many, many possible cases. Is that right? Yes, sir, yes, sir, in these. So even though I asked you, can transactions be reversed after they cleared? And you said, no. The fact is they absolutely can and they are routinely. Is that right? Routinely, I don't think that's the case. If the dispute is filed, that's a matter that's taken up with corporate. And then in that event, it's, you know, it's disputed and if it's reversed, it's because of the claim is found, you know, on the benefit of the sender. I'm sorry, what was the last thing you said? If the claim is found, you know, to, Oh, the claim. Yes, I guess the dispute is read the file. Okay. And what's the process for resolution of a dispute? Resolution of a dispute. Yeah, I mean, who is in charge of arbitrating that dispute? Typically our COO and our CEO. Abdualla. Yep, that's correct. Okay, so they personally have. I believe they confer, I believe they confer with the legal team as well. I see, okay. So basically it's the same thing as any credit card or PayPal or anything else. If Abdualla in its sole decision making authority determines that they cite in favor of the purchaser instead of the merchant, then the transaction can will be reversed as a chargeback just like PayPal or MasterCard or Visa or credit cards. Right? Yep, to my knowledge. Okay. So would you agree that it's absolutely inappropriate when someone calls you and asks you, can charges be reversed after they've cleared? It'd be absolutely inaccurate and inappropriate to say no. That is correct, sir. I apologize for my mistake. Okay. All right, thank you. Okay. So as you can hear, yeah, the chat room is commenting. Shady things going on at Abdualla. Now the interesting thing is like right after that conversation we came in here to do this show live and I sat down and I turned on my laptop and interestingly, now remember when I called, I didn't say my name. I hadn't, I didn't tell them my name, my account number, nothing like that. I mean, I don't know if they recognize my voice or maybe they got the color ID, I don't know. But anyway, I sat down here and I got this email. If you wanna flip over to my screen, you see I got an email right away within three minutes of actually placing that call from Abdualla support. And it's actually the same gentleman I spoke to, Ben Merga. He says, Bruce, please allow me to apologize for my misunderstanding about how returns work. After speaking with my COO, which must have been in the last three minutes, mind you, because this was like a three minute time lapse here, I can confidently share with you what we have in our terms and conditions. Returns, the receiving party of a transaction may be subject to chargebacks occurring within the account if claims are made by sending, by the sending party or by the financial institution. And the event fraud occurs, funds may be reversed and arbitration will begin with both parties, thank you for your patience, et cetera. What's interesting about this is that that's now in the terms of service. And I wanna, I mean, this is something that we discovered, actually many did this research and if you flip to my screen there, you'll see that we went, we used the Wayback Time Machine, actually Google's cache, okay, Google's cache. And you can see at the top of the screen, if I can make it a little bit bigger, this is from July 21st, a snapshot of their support center. And you see in the top right area over here, transaction information, six articles. There's no articles here whatsoever in their FAQ or support about transaction reversals. If you open it up, you can see these are the six items there. Nothing about transaction reversals. But if you, there's only one thing, there's a comment June 28th, somebody asked, how does Dwella protect me as seller from chargebacks? And Ben Milne, the same person says, please let me know the specific scenario and question and we'll outline the procedures for disputes. But that's like a comment question answer, but there was nothing in this support. Now, if you look at the current version, can you see that? Bring it up. You bring up the current version of the support center. As of today, there are eight articles. And if I open those up, you'll see that suddenly out of these eight, two of them are specifically about why was my transaction reversed and if a transaction was reversed, what can I do? So, if I open one of those up, you'll see that they're all dated today. July 25th to 37 p.m. central time, reclaim transaction processes and procedures. So this was all added today. So let me reiterate, I wanna recap a little bit for the audience that are just joining us right now because they're like, what? If they joined late, they don't know what's going on. Here's the bottom line is that D'Walla has claimed from the beginning that transactions cannot be reversed on D'Walla. And once it clears, it clears like a check. However, what's happening apparently is that the merchant, in this case, Tradehill, for example, tradehill.com, is getting a statement that is supposed to be a fixed statement that shows this is what happened. Transactions are listed as pending until they're cleared. And once they cleared, they show what resolved or cleared or something like that. And once they're clear, they're supposed to be cleared. But what's happening is without any arbitration, without any contact whatsoever, they're saying that the statements just reverse and the transactions go back into a pending state. And not only that, but clusters of transactions are absolutely disappearing from the statement. Is that true? Absolutely. And if I recall from the conversation, he stated that you would have to receive an affidavit as part of the process. And have you guys received, you said you haven't received any sort of communication from D'Walla regarding these, right? No, no whatsoever. We found these ourselves. I believe the only reason that this has been brought to light is because we found it. And we've been escalating over the last two or three days saying directly that these are the transaction questions, this is what we think is happening. And you need to have a conversation with us immediately to discuss this. And we've been cold-shouldered the entire time until basically they felt like we were gonna go public with it today. And now they're changing their stories, they're changing their stuff online. And I think it's pretty obvious what's happening here. Let me, I'm gonna go through this PDF. You created a little slideshow for us. Let's go through that real quick. You've got here errors and bad data from D'Walla. This is from you guys at Trade Hill. We have been told by D'Walla numerous times that if we receive a CSV or email from them showing an account credited that is non-reversible and will not change. And now you've got here an example. July 11th, transaction ID 169552 shows credit. And you can see obviously the names are blurred for privacy, but you can see there clearly that transaction 169552 shows credit in the first column. Okay, and then July 11th, and this is the same day, sends D'Walla sends confirmation email for this transaction. Same thing, person, the account number and so on that this has cleared. And the pending payment is now complete, it says. And that's the email you received. Okay, then July 14th, which again is three days later transaction 169552 reverts to a pending status. The same account, the same transaction ID and everything reverts to a pending status. And obviously they say this can't happen, but this is happening on a repetitive basis. Now you say prevention, Trade Hill has written a program to compare D'Walla CSV files. That's basically a file format for the statements you receive over time and detect fraud. We have been manually screening all D'Walla, which has caused delays, of course. We have detected $37,000 in fraudulent transactions that have occurred and 27,000 you guys prevented. The actual amount prevented is much higher due to the criminals most likely moving on to other targets. And that's not really good either because that means they're moving on to all the other exchange sites that accept D'Walla. Yeah. And now you've got a summary of D'Walla transfers. And wow, that's just mind-blowing. If it's affected you guys, what do you think the total in fraudulent transactions that have been reverted is in total, not just for the one month? You have an estimate of that? Yeah. Well, I mean, are you talking about with just us or are you talking about with across? Well, both, just you. And then what would you estimate the others? Like, Mt. Gox is more than half of D'Walla's business, right? We're going to have to see. They're going to have to audit. And they're going to have to find out. I mean, I don't want to assume that they've got them. But if they're getting hit equally compared to volume, it could be a few hundred thousand easily. And if they're getting away with it, and they're getting away with it, and they know they're not going to get caught, and they can keep repeating it, it could be millions even. It's really hard to say. Now, maybe he has some, I hope he has some system in place that's preventing this, or doing some of this. Give me a mark at my doctor. And it's automated, which we know it is, right? His transactions go instantly. That's everybody says with D'Walla. That's why everybody likes D'Walla. Is there's no way that his automated program is going out to see if CSDs would say credit it. They say credit it, and then the account gets credit it. If it goes from credit it, then depending, the account's already been credited in Antioxa's system. Which means that people go buy Bitcoins and take off of them. And we have caught people trying to do this. And we've lost about 30,000 worth of fraud in the last two weeks. And that's why we're doing everything immediately. And people say our things are slowing down, but we wanted to collect evidence. We wanted to see what was going on. We want to make sure our numbers were correct, and see how it was actually perpetrated. We have emails from fraudsters who say, release my funds, release my funds. And we're saying, no, we say you have to have a call with us, and it won't go on the call. And then, what do they do? They reverse the transaction. So they figured out where the problem is in the Walla system. And then they execute it when they know they're not going to get the money and the transaction gets reversed. Exactly. And also, we've noticed, since we started blocking this, there's a few smaller exchanges that just start taking Walla that are blowing up. And they're getting all kinds of volume coming in through Walla and then turning to Bitcoins. And I'm really hoping that they don't just completely lose out on this. Yeah, because that volume isn't real. It's fraudulent. So it's fake dollars that are coming in and they're issuing real Bitcoins. And then the saddest thing of all, I mean, obviously, these are criminal fraudsters, wherever they are, hackers, basically. But the scariest thing of all is that any of these exchange sites that are not as sharp as you guys that are actually comparing the statements over time from yesterday to today, last month to today, they're not going to notice. They're not even going to know that they were swindled. So they could be receiving tens of thousands, hundreds of thousands, even millions of dollars in Walla that's coming in, they're issuing Bitcoins and selling them and they won't even know that they were swindled until it's way too late. Exactly, and you'll probably notice because if you have $50,000 and then you check it the next day and you have 10, they're going to notice something happen. I mean, we were doing millions of dollars, so it's easy to miss $34,000. Yeah, oh my gosh. Yeah, exactly. It's on it and that's what we did. That's like two and a half percent of your volume in this fraud, is that right, about two and a half percent? Anybody? For us? For us, yeah. And the big thing was is we asked, I mean, first off, we have to all occasion, we explained the situation. We said we see things going from pending to credit it to pending. That's not supposed to happen, correct? They said, no, no, no, no. Where are the transactions? We send them the transaction IDs and they never send us data, they never got it back to us on those transactions. They would stonewall on us. And this is why we were gonna just want to talk and deal with them about it and hopefully they could fix the system. But then where are we going to deal with them? Exactly. And I can't, ethically, I mean, if these guys just keep this quiet when it could be ruining other people's businesses, it could be ruining people's lives. And if they would just talk with us, we'd be willing to work with them. Yeah, that's not cool. To me, that's the most damning thing is when you have a tiny, tiny little startup like Dualla and you can't answer the phone and you can't take a call. And then when they recognize my voice or my name or something like that, then immediately I get an email. It's so disingenuous. And I'm looking here, okay, this is Ben Merga, Dualla Support, that actually, okay, so it's two different Ben's. But there's Ben Merga of Support, but he has no way to reach the other Ben, who's the CEO and founder. And show my screen there. You'll see, I Googled Dualla CEO and I don't know what to make of this. This is DuMoinRegister.com, which is their local paper in DuMoin. Dualla CEO says, I'm the dumbest guy in the room. Ben Milne, Dualla's founder and CEO, credits his success to Sweat Not Smarts. I'm the dumbest guy in the room, says Milne, who spoke to a business innovation zone. He says he dropped out of University of Northern Iowa after one semester to start his own speaker business. The ITBS said I would be in special classes for slow kids. I don't understand this guy not being able to answer the phone, not being able to answer calls. When you've got, like I was saying, basically if I understand the numbers correctly, they only have three customers. This Dualla really only has three customers. They've got Mt. Gox, which is the vast majority of their business. Then they got Trade Hill and then they got Everybody Else, which is like a drop in the bucket compared to Mt. Gox and Trade Hill. They've got three customers and they can't answer a call. This is bad. And as you heard in that call we placed earlier, or we played earlier where I called, because I wanted to ask, and remember the very first day I opened my Dualla account quite some time ago, that was one of the questions I asked because I was really concerned because I understand they're using ACH. And isn't it true they have like a 60 day, what do you call it, charge back liability? 180 days. Oh yeah, I hear varying reports of 180 days or 60 days. But anyway, I wanted to know, is it really true that these transactions, once they're cleared, they can't be reversed? And they said absolutely not. And as you heard, just moments before the broadcast, I called and they said the same thing. And now immediately when he recognizes my voice, he replies that he just, actually that was the CEO. No, no, no, that was support who said that he spoke to the COO. Somehow he magically reached the CEO when no one has been able to, when you guys haven't been able to for a week, they're not returning your call, they're in a meeting, they're unavailable. It's just so disingenuous. It's really, really shady. Yeah. It looks like it was at the ICT chart. I mean, this is a new business, a nascent industry, and people are gonna make mistakes. And the key thing is remedying your mistakes, making right by your customers, admitting them, and then don't making them again. And then not making any mistakes. So all of it probably is $2 million in revenue a year. And this could add up to $300,000 or worse. And if they realize that, it could be game over. That's a lot to recover from. We made our own mistakes. We will tell you right now, we made some mistakes with people. But we did our audit, and it's definitely not game handy. And we have, you were done this, you built on our system, and they've changed your system to nullify and negate those mistakes. You go into any casino, you have double counts, triple checks. Online casinos is a big thing with them, right? It's getting their audits. But what do they do? Double, double process, triple check. So, you know, there's ways. And if you make a big error like that, and we make a big error like that, and it destroys our business, we'll walk out, but we'll come public with it. We'll tell the people about it, and that's it. It's just how we do it. Exactly. So back to our little principles, if you put on who we are. I think the public is forgiving when people are honest. And they're upfront about it, and they explain what happened, and it was a mistake, and we've done this to correct it, and you know, it's not gonna happen again, and these are the steps we're taking. But when you just kind of like brush it under the rug, and you don't take calls, and you hide, play hide and seek from a phone that's in the same room as you, and all that nonsense, for a week you're unreachable, and a little tiny startup with, you know, just a couple guys, it just doesn't bode well for your credibility. The credibility of a company like Dualla that's trying to make a niche. I mean, the whole Bitcoin community really has come around Dualla, and supported Dualla. We're really appreciative of the technology and the ease of use of their service. But you know, it's all about trust, and the bottom line is it's all about trust, and when you go back, and you know, for whatever reason, even if it is supposed disputes or something, you don't even contact people, you're in Communicado, and you just alter statements without notifying people, that's just fraud. I mean, basically that's, isn't that the definition of fraud, is when you deceive people, and there's a reasonable person would not, you know, be, a reasonable person would absolutely consider that fraud, because you know, to take a statement that's supposed to be unchangeable, and even according to their own terms of service and their own FAQs, that can't happen, and they even told you, didn't they tell you verbally in phone calls that that can't happen? Yep, and that's just on the reverse ability of transactions. I mean, no matter what statement you ever give to your bank from June, it shouldn't change. I remember there was one time when we were creating our watch list, I was just sitting there looking into HTML, okay, and we had basically over 200 grand in deposits, right, and then all of a sudden I refresh, and it goes to 199. So how can you go over 200? While you're watching it. This is credit, then all of a sudden to 199. So I just caught that one right there, and that's another one that's on the list of transactions. We have about 20 of these. We caught two today, two scammers today trying to do the same thing. Also, I want to say, and we take privacy very seriously. The individual's name that you saw in there, Patrick Cardenas, that's one of the scammers. So we block out everybody else's name. So you won't see any other names today, we're not gonna throw anybody else's names out. Do you have any wonder? We're assuming that's not a real name, but it is definitely one of the fraudsters. Have you had any contact with any of these fraudsters? I mean, they've emailed you and asked you to release their funds. Have you had any dialogue with them? Yep, actually, I have one in particular. I had emails from him saying, why hasn't my money been credited? We said we have issues with Waller. We need to speak with him on the phone, you get to sell. And he says, oh, I can't do it, I can't do it. Literally, three days, excuses why you couldn't go on the phone. And then finally, it was like a grant, right? So if he was cool with this, he would just get on the phone and explain the situation, should we give him this money? Right. And then what'd he do? He's making an excuse. I said, look, I'm not giving you this money until you get on the phone and speak with me. Why? Because he's afraid we're gonna escape. Record it. And so then what happens? He stopped sending email two days later, pulls back the transaction. It goes from credited to pending. Because we didn't credit the account, right? But we didn't allow them to withdraw, right? And so he said, why can't I withdraw? And we said, we need to speak to you on the phone. We think there could be an issue. So you can see why these people still do it on purpose. For instance, when they know they're gonna pull back the transaction from Bawala, they wait for the merchant, either us or Gawks, to credit the account. And then within 10 minutes, they'll buy as many Bitcoins as they can, make the withdrawal, just trying to get out really quick with the money. And basically, these are the intentional, people are doing it intentionally. Now there's a whole other class of errors, which is just like we were saying, where the statement just changes, transactions just go missing. So those, I don't know where those are coming from. Have they ever responded to that? The transactions just go missing? I mean, how do you contact them about those transaction numbers and what's up with this? Yeah, we gave them those transactions too. We gave them a list of about eight transactions, ones that were in description of what was happening. And this was four or five days ago, the different error types and the transaction IDs that we've been stolen from, all the way up until you called Bruce and we sent him an email saying, if you don't speak to us, we're going public with this. And then I get, you know, right away. Well, you know, I mean, startups are startups. I don't ask you. We said, it was 40 minutes. We said 20 minutes. It was 40 minutes. You'd already started with me at this point. And it wasn't, and to clarify, it wasn't an email saying, there's a big problem here. We're going to fix this and we're going to make it over to customers. It was basically, we'll look into this, which is what we've always gotten. It's taken all this weeks and weeks to come out and say, we'll look into it after they've already told that you're going to, we're going to talk about this on the air. You know, the thing is, okay, startups are startups. Small companies can explode with growth and systems can break. And all those things, human beings understand. I mean, we do understand that those things happen, no matter how perfect the platform you may think it is. But what's not forgivable in my book is when you go in communicato, when you cannot be reached and you hide behind a keyboard or worse, you don't answer your phone, you don't reply to emails at all and you just disappear because that is disingenuous. To me, that shows a lack of integrity. It shows that you're not standing by, I mean, you've got to say something. And to wait weeks and weeks and send an email that says, we'll look into it. That's just not okay. You can't have two weeks' worth of meetings about this and not have made a decision about what you're going to do about it. Not only that, they have a unique position in the Bitcoin community. They could have really, really capitalized on this and become one of the fastest growing companies. Well, they have, they have the majority. The vast majority of their business is the Bitcoin community. And you know, one of the things I wanted to say about this, this is, I mean, obviously this is devastating and it could be game over for Dualla. That's Dualla's problem. But the thing is that it's really devastating to the Bitcoin community because it doesn't, this event does not affect just one exchange. This event affects all the exchanges that accept Dualla and this could absolutely be a crippling blow if not, you know, the deadly blow to a lot of these exchanges. So let's talk about what are we going to do about this? I mean, we need to do something as a community. If trade deal stops accepting Dualla, and well, first it depends. I mean, it depends on what Dualla is going to do about it. That's a big thing. But we cannot continue to use Dualla like this. It's too, it's too intensive. It's too many mad hours to manually verify everything. And it's not completely reliable. I mean, we might have something pulled back even later. So I think Dualla would probably be more willing to use people as now. And I want to talk with National Talks, Mark from Mt. Gox and see what we're going to do. And the other exchanges as well. I don't think it's, we can't accept this at this point. No. Well, you can't. I mean, you can't afford that. I mean, I don't think you're making enough profit to lose 2.5% of your revenue to fraud and have no record. And if you, I mean, and also the time, if you have to manually verify every single one, well, you may as well take Visa, you know? I mean, that's just crazy. Exactly, exactly. So we're all going to suggestions. We're all going to talk about this. We're going to put a post on this on our blog, tradehillblog.com. And let's talk about it. Let's see what we can go from here. We're all going to speak with Voila. We're all going to speak with Mark. I mean, we have a friendly relationship with them. We're competitors, but you know, I mean, we're all in this Bitcoin thing together. Yeah. And we all work together. Yeah. We're all in the same Bitcoin boat. So what about, let me just ask you this, why not, you guys have a US bank account for wire transfers, right? Why not just use US wire transfers and recommend to people a list, like recommend to USA residents a list of banks that don't charge for wire transfers. You walk into that bank and open a checking account. And then you can send the wire transfer at no cost. I think we've lost the connection. OK, we're going to get them back. We're bringing them back. Oh, there you are. You're back. OK, cool. So move that mouse across. So are you there? Can you hear me? Yeah. OK, I'm sorry. We lost the connection there, Skype. So now what I was saying is why not, I mean, you have a USA bank account, right? And you accept wire transfers. So I mean, this is just my question, hypothetical I guess. Why not just give people a list of all the banks in the US that you know of that don't charge for domestic wire transfers and say, walk into one of these banks, open a checking account, and then do domestic wire transfer for free. It's even, if it's free, it's even cheaper than Diwala. And it's probably faster than Diwala. It's great. I'll actually, I'll just take it one step further. And I'll say, use ING Direct. I think they're a great bank. ING Direct. They're free. Diwala charges a quarter, it's cheaper with ING Direct. So can anybody, how do you open a bank account with ING Direct if you live in Des Moines? You just go online? Yeah, you can do it online. Oh, OK. And there's no charges. You can do domestic transfers. It's free. They do free ACH in and out. They don't do wires. It's the only downside. But their customer service is amazing. And I call them and I just had a great time using them. And I wholeheartedly recommend them. Now, wait a minute. If they're doing ACH, aren't you going to run into the same problem as Diwala? We'll need a look into that. I'm going to get on the phone with the bank. I'm going to talk with the bank and see what we can do. I like checks and wire transfers. If you're not going to do cash, checks and wire transfers. Because as far as I know, old fashioned paper checks and wire transfers can't be reversed. Right, right. And this isn't something we can really solve right now. So we're going to definitely, I'll speak with the bank and I'll ask them about the ESCHs. I'll ask them if there's any way we can prevent fraud on that. And I think as a community, we're going to have to decide where we're going to go with this. I really, really like the idea of Diwala. I was really impressed with all of this whole time until this happened, which has really been a big disappointment for me. But I think it's, I don't know, hopefully we'll find an alternative. It will work out. Well, once again, it's not Bitcoin's fault. This is the thing. You've got to make clear. When these things happen to cloud-based businesses, entities, whether it's an exchange site or whether it's a Diwala or whatever it is, it's not the Bitcoin network. People lose confidence in Bitcoin. Like, oh, Bitcoin has been hacked again. But it's really nothing to do with Bitcoin. It's just like, it's like if a bank gets robbed across the street, that doesn't destroy the US dollar. It's just one particular incident with one particular entity. So it's not really about Bitcoin at all. It's about these players that just happened to be important. Exactly. And it's actually the startup Bitcoin company that found the problem with the traditional financial system. Right, yeah. One thing that I think is interesting, this could not happen with Bitcoin. We don't have ours backs. It's impossible. The network wouldn't allow it. Wouldn't it be better if everything was Bitcoin? On that note, let me just take a minute, because I have to thank our sponsors, obviously. These are the guys that bring us to you every day. And we really, really appreciate their support. And so please patronize their services and thank them for sponsoring us. And they are usgoldcoins.com, 1-800-HOTCOIN. Andy Gauss is our trusted advisor for investments in rare gold and silver coins. To diversify your investments, they'll leave them all in Bitcoin. Contact Andy at 1-800-HOTCOIN, very accessible. He's not like Dualla. You call him and he answers. He is absolutely accessible. And he'll answer your questions. You don't have to be a customer or buy anything from him. Just call him up and ask him about your house's own foreclosure. He's an unbelievable monetary historian and money expert. So that's usgoldcoins.com, 1-800-HOTCOIN. And if you're in the US, or USGoldCoins with an S.com. And as a grill, of course, the world's first brick-and-mortar restaurant that accepts Bitcoin. They're right here three blocks south of Columbus Circle at 8th Avenue and 55th Street in New York City. And they're now serving breakfast where authentic Mediterranean food meets modern flavor. We love Mezzy Grill. Go there a few times a week. Mezegrill.com and tradehill.com. You've probably heard of them. They are the premier exchange site and online exchange service for buying and selling Bitcoins, obviously. Many ways to get your money in and out. So as we're discussing today, I won't make any comments about that. But anyway, 10% off your trade fees for life of the referral code TH-R141. And their goal is always to make buying and selling Bitcoins as fast and cheap as painless as possible. So as we work through these issues with D'Walla. All right. And finally, MtGox, mtgox.com. Obviously also the online exchange service for Bitcoins. They have a two-factor authentication with UB Key now. They now take euros, Great Britain pounds, and Australian dollars, Canadian dollars coming any day soon. And continuing fees of 0.3% through August 9th. So we thank all these guys for supporting the Bitcoin show and OnlyOneTV and bringing us to you. So this could have been avoided, essentially, if they would have just tried to reach out a little bit and see if this is helpful. They tried to come to some sort of result because for any business, this is very serious for any company to take it back lately at a very good time. Right. Exactly. That's the thing. I always say, no matter what you do, no matter what you do, you absolutely have to communicate. Communication is key in any kind of relationship. But in business, as much as any other, even if you mess up, you've got to communicate. Communicate, be honest, be transparent, apologize when you make a mistake and correct it. But when you go and communicate and you just disappear, that just is not good. Julian is emphasizing from the chat room. He thinks the point needs to be re-emphasized that this cannot happen with Bitcoin. Bitcoin cannot happen because there are no such things as charge backs. Transactions are irreversible. And there are no transaction fees and all that. If we could just buy Bitcoin with Bitcoin somehow, that would be the answer. If everybody had enough Bitcoins, we wouldn't have this problem. That darn US dollar. So what are we going to do about this? We don't know. We can't solve it today. We're just growing pains with Bitcoin, basically. We just need to find the happy medium. And eventually, Bitcoin is going to be an issue. But for now, it's the bridge of the US dollar to the Bitcoin. And obviously, that's what exchange sites are all about. But getting the US dollars and the euros and so forth into the exchanges has always been the problem. Mastercard, Visa, PayPal, Nightmares, fraud, the fraudsters, and the hackers always get in, and the reversible transactions. This is the legacy of the old economy, reversible transactions. You just can't buy cash with credit cards. It's as simple as that. If you buy something at Macy's on your credit card and you return it, they're not going to give you cash back. And people don't understand. I guess consumers don't really get it, that they can reverse your transactions six months later. But I always wondered that from day one. I just kept asking, are you sure these transactions, once they're cleared, they can't be reversed? No, they can't be reversed, they said. And I was like, OK, well, I hope so. I just hope for the best. But I can't really say that I'm surprised that this is happening. But what I am really surprised about is how irresponsibly they are acting about taking your phone call or turning your phone call and publicly disclosing what's going on. And when transactions, assuming that that's what's happening, that these transactions are being disputed, that they're not communicating that to the merchant. And just changing the statement after it's printed, just wrong, just wrong. So I don't know, let's see what the chat room is saying. Even checks can be reversed in the USA. The checks, Taylor says checks can be reversed in the USA, is that true? From my understanding, it depends, yeah. If it's a fraudulent check, it will be reversed. Are you sure? I thought I had read that it can't be. There's a lot of fraud with checks. Well, yeah, there's a lot of frauds. But once a check clears, I mean an e-check, yes, which is basically ACH. But a regular paper check, I thought that couldn't be reversed. I've had this happen to me once. I've literally had a check from PNC Bank, from a business account, while that bank had more funds, cleared for about four to five days. And then after that period, they reversed it. And my account over withdrew the amount of the check, plus $35 for each transaction, plus the amount of the transactions. And was that a direct deposit? No, it was a check that was written to me, a paper check. I cashed it in. The funds were available after three days. And then another three days later, it was completely reversed. And my account was over withdrawn, a crap load of money. And I still have to pay that. And that's why I don't use bank accounts anymore. Cash is king. All right. So what do you guys say? What are you going to do about this? What's next? Well, I mean, well, for now, we just have to hold accepting deposits through Douala. But I want all users, don't worry. We will be able to cash you out in the meantime. We can use wire transfers, bank transfers in the US, while Douala even out. For now, we can't accept deposits until we sort this out with Douala or with different needs. So you've already stopped funding, depositing via Douala at this point? We're doing it right now. Yeah, I mean, that's I would do. I don't blame you at all. I mean, you just can't. That's just crazy. I mean, 2 and 1 half percent of your volume. There's potentially a lot of losses out there. Well, I know our losses are confirmed with the transactions that are errors on Douala's side. Oops, we lost them again. How many other exchange sites actually accept Douala? I think there's just the US ones, right? Because Douala's only in the US. Yeah, it seems like, well, yeah, not only that, but it seems that if you're doing the accounting, either if you're using an automated Douala system or you're doing the accounting using Douala's info, if you don't have a system like Trade Hill, it might pass through the cracks. Yeah, Skype seems to be about as reliable as Douala, about 2 and 1 half percent of the time we lose you. But anyway, you're back. So I was saying, how many other exchange sites are you guys aware of that actually accept Douala right now? I think most are all of them do. US based, anybody taking USD, there's at least three other who just started. And then, of course, Gox has been taking them for a long time. So at least four or five for USD, US based business. Yeah, I mean, I want to be really clear about Mt. Gox, though. I mean, we all want to stay down a bunch on Douala. I mean, I don't want it, they need to audit. And I'm sure that they're looking into this if they haven't already. And I definitely don't want to accuse them of being negative a bunch of money. So let them do their thing. But we don't know. Yeah, we can't comment because we don't know. But we want to alert them. I mean, everybody, obviously, if they're not watching this show, everybody should email all the exchange sites and say, hey, hey, hey, heads up. Have you seen this episode? And what's happening with Douala? And so that they audit their Douala income. I mean, I hope they're keeping these records that they can go back and then review. Do those CSV files stay online forever, even if they are changing? Well, I mean, you can always download a previous month statement. But even then, we found a, I think it was about five days ago, we've been downloading those CSVs three times a day. And I think it was about five days ago that we discovered that on our June statement that was supposed to be closed, there were two outgoing transactions that were missing. And they're just nowhere to be found on the file, which, I don't know, to me, I really hope it's just a bug in their reporting mechanism and that we can sort it out easily enough with whatever they need to do on their system. I really hope it's that. Our concern is that they've been very irresponsible. That's the main thing. Exactly, yeah. That's the biggest thing. Like I said, and I actually, weeks ago, but way before I knew about any of this, of course, I had asked the CEO and founder of Douala to appear as a guest and I got an email. You know, you politely declined or whatever. But I've also seen interviews and things where he was directly asked about Bitcoin because, I mean, this startup, when the vast majority of your business is two customers and it's all Bitcoin, which is it's gotta have blown their mind, they weren't expecting that. But for them to try and distance himself, it's just so weird what a dilemma they must be in because they're a new startup, they're setting this huge growth spurt and it's all Bitcoin and they're trying to distance themselves from their biggest customers. It's just weird. I would imagine that right now, Bitcoin isn't nearly as big a part of their business as it was several months ago. But I mean, Bitcoin, to me, it seems really gave them a huge bump. Yeah, yeah, it's gotta be huge. So now, until this broadcast, I wonder if Bitcoin will be any of their business after this news hits the streets because I mean, I can't imagine any exchange site can afford to lose 2.5%. And that's just if they caught it because yours was 2.5% of your transactions because you were watching it so closely, it could be 50% of their Dwella transactions if they're not paying attention, they didn't notice. Right, and hopefully Dwella do the right thing. Hopefully they'll fix this, they'll make it right, they'll make an announcement, make a statement. I mean, there's nothing wrong with having reversible transactions as long as people know they're reversible. Right. So I mean, honestly, I like a lot of the ideas of how it works and how it's supposed to work and all that. So hopefully they can fix it and stay friends. Yeah, yeah, I know. But just moments ago before the show, I called and they said, no, transactions are not reversible. And the incommunicado thing, I mean, that's just not right to give out that false information from day one till now and then update your FAQ. In all these meetings in the last two weeks, they haven't had time to talk to you but they had time to update their support pages to say like retroactive. Seems like they're changing a lot of things retroactively. That's just not right. In the email, he even stated he spoke to the COO and that's one of the person that's been unreachable. Yeah, within the last three minutes of the time I hung up over there and we recorded it and then I came in here and sat down, I got an email that he had spoken to the COO after that call. That means he was sitting right next to him or something. He was like right there accessible. And for them to be avoiding your calls, it's just unforgivable, really. I mean, honestly, I've done that before. Where I've been at a job and I don't wanna speak to a customer, I tell them no. But one thing is a $50 service and the other thing is $27,000 or $37,000 discrepancy. Yeah, and when you're at the CEO of a company and you're talking, we're not talking about five minutes or even five hours, you're talking about what? Two weeks, how long has it been you've been trying to reach them? Well, I mean, we brought it up about, we started it what originally two weeks ago but I mean, we've been really pushing it and it went last three days. But Thursday of last week, so I believe it was when we really started pushing it. Okay, well, of course we hope that they learned from this lesson, we always hope for the best. And we hope that they get their act together because this is a huge percentage of their business and this is giving them a really bad name to go in Communicado and that they resolve these issues. But somebody is screwed because if those fraudsters pulled the money and you've already given out the Bitcoin, somebody's gotta make up the money. And where is the... Where's that gonna come from? Our system, we caught the error in their system. So what's, and it's a lot of money and anybody who's automated is gonna have the same problem. Are they gonna, I mean, I hope they're well funded that they can cover those losses. Yeah, and they said everybody was getting the same CSVs from the same system. There was no preferential CSVs or no custom CSVs. Everybody's coming off the same methodologies. So we'll see where they go down here. They might come out, they might say, you know what? We had some errors and we will reimburse everyone and we'll take care of this. And if we do that thing, great. That'd be the right thing to do and that would look really favorably upon them. What was that last thing? What was it? Oh, I mean, it would just be great if they came out and they said, hey, we made some mistakes and we'll fix it. And if they make everything right. Yeah, let's hope so. We'll reimburse them and go forward from there. Okay, well let's hope so. We've got like two minutes left. Is there anything you want to leave us with until next time? I think we've said it all. It's like, what is there to say? Oh my God, another disaster. To promote ourselves a little bit here, just head over to the blog for all the newest updates and everything. We're going to make a lot more changes. Things are coming quick and fast now. So tradehillblog.com, Twitter, of course, only one TV is a great source. Use Bruce's referral code so he can benefit from your ship. That's about it. I think, you got any questions, any questions anybody wanted to hear in the chat room? No, they're having all kinds of conversations about all kinds of things. But actually, we've got one minute left, so we're out of time. But anyway, thanks for giving us the exclusive and talking with us about this really important issue that affects everyone in the whole Bitcoin world. And a lot of people are going to have to really think this through and make their own decisions of what they're going to do and how they're going to act accordingly. And we are out of time, but thanks you guys for joining us. And thank you for bringing this to the attention of the public. Exactly, that's right. Yeah, as quickly as you could. So, all right, thanks guys. And we appreciate you being here and we'll see you tomorrow, 2 p.m. Take care. Thank you.