Comment by notahacker | Hacker News Reader

Comment by notahacker | Hacker News Reader

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Correct me if I'm wrong, but are the following all true

- You're running this business as a UK limited company named after the founders, who are based in the UK

- Your scheme involves third parties, probably outside your control, performing arbitrage trades on third party platforms in an unstable asset with variable liquidity characteristics in order to turn BTC into more BTC

- You're marketing a service as a "loan" offering a "return" within a specific range and offering assurances about vetting third parties using the service and covering losses, but don't include even a boilerplate terms of service or risk warning

- Nobody on the team has a background in compliance or due diligence

- You're not Bitcoin billionaires

Assuming the above are true, I hope you have a very good lawyer. Since at a glance you actually appear to be real, traceable people I'll assume you're acting in good faith and not running a Ponzi scheme which would be my first assumption based on the website's claims otherwise, but the chances of you heading in the same direction as Ponzi-scheme operators in the likely event of something outside your control going wrong are very high indeed. In all sincerity, I'd encourage you to trade less unless you have the backing of someone with a deep understanding of relevant UK law and even deeper pockets.

Hi notahacker, thanks for the well balanced comment. We're incorporated with our surnames but operate under the name TradeMore. Alas, we're not Bitcoin billionaires.

You're right on a number of counts, but I disagree slightly with a couple of your points. For example, our borrowers are not "outside of our control", because they only borrow on very specific accounts where we have implemented stop-loss logic and where the withdrawal address belongs to us. This functions in a similar way to when you trade through a broker.

We have not included terms of service on our website, and this is something we should do. However, we do make sure to share the full T&Cs with lenders and borrowers prior to transacting. Right now these are in the form PDF documents which outline clearly each parties responsibilities. Send me an email if you want to take a look.

Point taken about "heading in the direction" of a Ponzi scheme. I know what you mean. We could say, "oh, we've had a bad week, let's just repay our existing lenders with our new lenders funds". It's a slippery slope. To avoid this we separate client funds. So for each our of clients we know where their funds are at any given time, and do not just let funds flow from one to the other. Point also taken about trading less. Obviously we want to grow, but not to the detriment of our quality of service.

On the point of lawyers and legislation in general, we have consulted a number of lawyers in the UK and US. Generally, the feedback we have received is that Bitcoin is a very grey area, with most governments in a 'wait and see' mode. However, we want to act as if we were already a regulated financial institution and stay ahead of the curve (one day, if the FCA accepts bitcoin companies into the fold, we will be regulated).

So what's your plan if you don't gain enough money with your trading scheme?

Hi imaginenore, are you talking about the situation in which we earn less on our assets than we owe in our liabilities? In this case we would use our capital buffer.

Yes, that's what I meant. How much is your buffer?

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