Bitcoin Forum

Huobi’s new fixed-interest bitcoin investment product should have the hairs on your neck standing at attention

Despite this growing portfolio of bitcoin financial services, it’s somewhat concerning that Huobi remains an unproven and largely unregulated entity. (The fact that its fixed-term financial products website looks like it was designed by a high school student doesn’t help matters.)

And with this in mind, offering anything remotely close to a “guaranteed rate of return” should give investors pause. A 16 percent annualized rate of return is the kind of high-yield investment that traditionally carries extremely high risk. Traditional bank CDs offer interest rates in the low single digits and are backed by FDIC insurance, while the lenders themselves are subject to reserve requirements. Huobi, of course, has none of these traditional safequards. Taking on consumer deposits and guaranteeing fixed rates of return without these depositor protections demands the kind of institutional trust that bitcoin users have been taught to avoid – and for good reason given the history of ineptitude and fraud within the ecosystem.

http://pando.com/2014/09/02/huobis-new-fixed-interest-bitcoin-investment-product-should-have-the-hairs-on-your-neck-standing-at-attention/



be careful.

The company offered 2,000 such “subscriptions,” each valued at 1 BTC, and capped purchases to 50 units per subscriber. The offering sold out within an hour, according to a company spokesperson.

I have serious doubts..